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When Work Doesn’t Pay: The Challenge of Housing our Essential Workforce Metropolitan Housing Coalition June 20, 2005 Essential workers do not earn sufficient wages to support the cost of safe, decent housing. Issue Paper Overview • Gap between housing costs and local wages for essential workers – Child care worker, teacher’s assistant, fire fighter • Community impact – Families, schools, economy • Community solutions – Wages, innovative housing assistance What is affordable? Households pay no more than 30 percent of gross income on housing and utilities combined. U.S. Dept. of Housing and Urban Development In 2003, in the Louisville Metro Region You had to earn $11.17 an hour to rent a 2-bedroom apartment at fair market rent. What is Fair Market Rent? • Local • Renters have ability to rent 4 out of 10 rental units • Housing and utilities combined U.S. Dept. of Housing and Urban Development What was that? Housing and Utilities Combined Fair Market Rent How much income does an essential worker need to rent a 2-bedroom apartment? $22,120 Final 2005 Fair Market Rent for a 2-bedroom apartment is $553 per month in the Louisville KY-IN MSA A teacher’s assistant with median level earnings can afford to pay $455 a month for housing in Louisville Metro. The current fair market rent for a 1-bedroom apartment is $466 (including utilities). In 2003, in the Louisville Metro Region You had to earn an annual income of $41,141 to buy a median priced home of $132,000. The median wage of a fire fighter was $25,080. A fire fighter … in Louisville Metro could afford to buy a house valued at about $94,000 leaving that worker priced out the housing market for a median priced house in 13 of the 26 Metro Council Districts. For a child care worker… He or she would have to work 57 hours a week to purchase a $70,000 home, a value almost half the median in the Louisville Metro region. 80,000 households or 26% of renters and owners combined in the Louisville Metro region are experiencing excessive housing cost burdens. Essential Workers Wages Compared to Median Income and Poverty Threshold Median income for a 3 person family Poverty for 3 person family Fire fighter EMT and Paramedic Bank teller Preschool Teacher Teacher Assistant Retail Salesperson Janitor Home Health Aide Child Care Worker 0 10,000 20,000 30,000 40,000 50,000 60,000 Gap between Earnings and Cost of Housing: Community Impact Unintended Results – – – – Employers lack reliable workforce Can require multiple jobs Requires 2 wage earners to afford housing Impacts children’s school success Numbers of low and moderate wage jobs are increasing 25000 Number of Jobs 20000 15000 10000 5000 0 Child Care Home Health Retail Worker Aide Salesperson Janitor 2002 2012 Source: Kentuckiana Occupational Outlook. Kentuckiana Works, 2004. Community Solutions to Meet the Challenge • Increase Wages – Living Wage Campaign • Create New Sources and Forms of Housing Assistance – Federal assistance threatened – State Affordable Housing Trust Fund underfunded – Need Local Affordable Housing Trust Fund Growing Number of State and Local Affordable Housing Trust Funds Essential workers do not earn sufficient wages to support the cost of safe, decent housing.
