Increases in housing costs are outpacing wage hikes

Genaro C. Armas; The Associated Press
News Tribune

11/20/02

WASHINGTON- Many more low- and moderate-income working families are spending at least half their salaries on rent or mortgages, according to a study released Tuesday by affordable housing advocates.

More than 4 million households fell into that category last year, a 67 percent increase in four years. The surge is because increases in housing prices are outstripping wages, said the Center for Housing Policy and its parent organization, the National Housing Conference. The result is many people must cut spending elsewhere, such as retirement savings, researchers said.

Pedro Aguilar, 37, his wife and their two teenage daughters moved from San Francisco two years ago because housing prices had become unaffordable. They moved to Antioch, Calif., an hour away, but now find themselves again struggling to pay the rent.

Aguilar, a janitor, and his wife make about $3,000 a month. They pay $1,500 a month for a three-bedroom apartment, but their rent is set to increase by $300 next month. Aguilar said his yearly raises of 40 cents an hour don't cover the rising housing costs.

"A long time ago, when I was in Mexico, I thought I could make enough money to live better in the United States. Now, I don't know," Aguilar said.

The study identified low- to moderate-income families as those who worked the equivalent of a full-time job and earned between the minimum wage of $10,712 and 120 percent of the median income in their area.

The report dispels the notion that the housing crunch is most severe for renters and for the working poor in cities, researchers said.

Some 61 percent of working people who spend more than half their salaries on housing live outside cities, the study found.

And between 1999 and 2001, the number of homeowners who spent more than half their income on housing rose 36 percent, outpacing the 24 percent rise among renters.