Friday, November 30, 2012

The Poor are Too Expensive

Back in September at a friend's outdoor dinner party, I talked with someone at affordable housing company. Here are my notes:
Last night, conversation with X who works at a private company working with cities on mixed-income affordable housing. Her point was that it was too expensive to house the poor.
It is true that mixed-income affordable housing does not really house the poor. For example, a new residential complex could have 158 units with 112 units sold at market rate and the following affordable units: 


units for those making less than $32,250
5 units

units for those making less than $64,500
29 units

units for those making less than $86,000 12 units


It is quite easy to work full-time and make less than $32,250. According to the Bureau of Labor Statistics data on DC-area average wages, a household with one breadwinner can easily be in poverty working full-time at the following jobs:
  • Barber/Salon Shampooers $19,390
  • Fast-Food Cook $19,660
  • Dishwasher $20,600
  • Cashiers $21,780
  • Food Preparation Workers $22,510
  • Child Care Workers $23,980
  • Janitor $25,480
  • Hotel Desk Clerk $26,190
  • Bank Tellers $28,410
Since many people working these jobs make an hourly wage and not the full-time salaries listed above, households with two breadwinners also could be making less than $30,000. A janitor working full-time could afford to pay $541/month in rent (30% of their monthly post-tax income).

Yet, these low-wage service workers are absolutely essential to global cities like DC. Highly and not-so-highly paid professional rely on these low-wage service workers. We live in a society that has no place for the poor and, at the same time, completely depends on the poor. The private and public sectors do provide housing to those who can pay market rate, but somehow the poor are too expensive?

1 comment:

  1. Solution: massively increase the supply of market-rate housing. Build, build, build!

    We have large constraints on supply, and that is a problem. Extended and acrimonious approvals for projects like Hine are one example of the constraints on adding new supply.

    This will allow the market to provide reasonably-priced housing for those in the $64,000 to $80,000+ brackets. This then allows resources for subsidized housing to be focused on those at lower income levels.

    But the key element in all of that is more supply, across the board.

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