Monarch Housing’s Blog!

How are lowest income Americans affected by the current mortgage crisis? Commonly described as a problem of mortgage markets and home prices, little attention has been paid to households at the bottom of the housing ladder — extremely low income renters and homeowners — and the persistent mismatch between these families and available affordable housing. In part this is because the data do not easily allow a direct connection between foreclosure or eviction and characteristics such as income, and many of the statistics that will provide in depth information on the changing housing situations of Americans, are still years away from being released.

This Expert Chat will present recent data and analysis on the current housing market and draw some preliminary conclusions about the impact of the current crisis on the affordability and availability of rental housing for the lowest income households. The material in the presentation will draw primarily from recent and ongoing research at NLIHC on foreclosure and rental markets - including the most recent Out of Reach report - providing participants with a comprehensible overview of the emerging patterns and trends to watch.

Current trends and patterns in national housing market indicators such as home prices, rents, and vacancy rates and the implications for these households of greatest concern to the Coalition, the lowest income Americans, will be discussed. Also, findings from NLIHC research on the types of housing and the characteristics of neighborhoods most affected by foreclosure in New England, and the results of a national survey of housing counselors concerning the income and tenure characteristics of the households they serve, will be shared.

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On Friday April 18, 2008, President Bush selected SBA Administrator Steve Preston to take over as head of the government’s housing agency at a time of deep crisis in the industry. To say the least this is a difficult time fro someone to be appointed Secretary of Housing and Urban Development (HUD). It is not simply the sub-prime and foreclosure crisis but the rising gap of affordability that keeps a larger and larger number of people out of reach of affordable housing. It is also the failure to provide adequate funding as well as the pending crisis that could result in more than 6,510 rental vouchers in New Jersey that was detailed in the Center for Budget Policy and Priorities report entitled “HUD BUDGET CONTAINS MAJOR FUNDING SHORTFALLS: Congress Needs to Add $6.5 Billion to Administration’s Request to Avoid Cuts In Assistance for Low-Income Families.”

In his announcement, according to the NY Times, Bush called “Steve Preston, a ‘consensus builder’ and ‘experienced manager’ while head of the Small Business Administration, to be the nation’s new housing secretary. In a White House ceremony, the president praised Mr. Preston as ‘a reformer who would act aggressively to help Americans obtain affordable mortgages’ and so be able to keep their homes.”

The Times reported that Mr. Preston said, “Our solutions must restore confidence in our markets while not erecting barriers to future entrepreneurs, investors and home buyers.”

We understand the importance of addressing the foreclosure crisis but we believe HUD needs a leader who can insure that the department insure affordable housing for all of our citizens, increase supportive housing for those wit unmet needs and provide funding to end homelessness.

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As the Monarch Housing Blog! reported on April 4, 2008, New Jersey remains the fifth most expensive state for affordable rental housing. The post last week announced the National Low Income Housing Coalition’s release of Out of Reach 2007-2008. Although we were disheartened again today with the release by our friends at the Housing and Community Development Network of New Jersey of the details about New Jersey we were pleased that they were taking the lead on making the case about the continued decline in affordability in New Jersey. As they note in their fact sheet “The hourly housing wage in New Jersey for a two-bedroom apartment at fair market rent in 2008 is $22.25. This wage has risen 42.6 percent since 2000.”

To read the full report click here.

To read the Housing and Community Development Network’s fact sheet click here.

To read the Housing and Community Development Network’s four pages of data click here.

The following is their full press release.

Affordable rental housing still “Out of Reach” in NJ
Network says report shows need for action in fifth worst state

The release of the National Low Income Housing Coalition’s “Out of Reach 2007-2008,” the annual report documenting the need for affordable housing in every state in the nation, takes on an amplified importance for New Jersey this year, according to the Housing & Community Development Network of New Jersey.

“The NLIHC’s report, which once again places New Jersey among the most difficult states in which to find affordable places to live, points up the necessity and the urgency of taking meaningful action,” said Diane Sterner, the Network’s executive director.

In the 2006-2007 NLIHC report, New Jersey was the fourth most expensive state in which to rent. According to this year’s report, things haven’t changed much, with the state in fifth place. To afford a two-bedroom apartment at fair market rent in New Jersey the tenant must have an hourly wage of at least $22.25, an almost five-percent increase from last year. Social workers, dental lab technicians, police dispatchers, home health aides, child care workers and school bus drivers, among a host of other occupations, make under $22.25 an hour in New Jersey. Only in Hawaii, California, New York and Massachusetts, is renting more expensive.

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This week the National Low Income Housing Coalition released Out of Reach 2007-2008. The trends that have undermined affordability have continued. “Out of Reach is a side-by-side comparison of wages and rents in every county, Metropolitan Area (MSAs/HMFAs), combined nonmetropolitan area and state in the United States. For each jurisdiction, the report calculates the amount of money a household must earn in order to afford a rental unit at a range of sizes (0, 1, 2, 3, and 4 bedrooms) at the area’s Fair Market Rent (FMR), based on the generally accepted affordability standard of paying no more than 30% of income for housing costs. From these calculations the hourly wage a worker must earn to afford the FMR for a two-bedroom home is derived. This figure is the Housing Wage.”

To read the full report click here.

To view data in New Jersey click here.

To view the rankings of most expensive housing wage click here.

For an overview on how to use the data click here.

This is the overview from the report on New Jersey.

New Jersey is the sixth most expensive place for renters! In New Jersey, the Fair Market Rent (FMR) for a two-bedroom apartment is $1,157. In order to afford this level of rent and utilities, without paying more than 30% of income on housing, a household must earn $3,857 monthly or $46,287 annually. Assuming a 40-hour work week, 52 weeks per year, this level of income translates into a Housing Wage of $22.25.

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