Vermont’s Rental Housing Affordability Gap Continues to Grow

BURLINGTON, VT – In order to afford a modest, two-bedroom apartment at the Fair Market Rent in Vermont, renters need to earn $21.13 an hour, or $43,947 a year. This is Vermont’s 2016 Housing Wage, revealed in the annual Out of Reach report released late last month by the National Low Income Housing Coalition, a Washington, DC-based research and advocacy organization, and today by the Vermont Affordable Housing Coalition.

The Housing Wage is the hourly wage a family must earn, working 40 hours a week, 52 weeks a year, to be able to afford the rent and utilities for a safe and modest home in the private housing market (affordable means paying no more than 30% of income).  Every year, Out of Reach reports on the Housing Wage for all states, counties, and metropolitan areas in the country.

The report highlights the gap between what renters earn and what it costs to afford rent at fair market value.  With an estimated mean renter wage of $11.79 an hour, average Vermont renters are left $9.34 an hour short of what they need to earn to afford a decent place to live.  They can afford just $613 a month for rent and utilities while the average statewide Fair Market Rent for a two-bedroom apartment is $1,099.  Vermont has nearly 75,000 renter households.

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“This report shows exactly how hard it is for ordinary working Vermonters, for seniors, for people with disabilities and others living on fixed incomes to afford safe, stable housing,” said Erhard Mahnke, the Affordable Housing Coalition’s Coordinator.  “Vermonters have to earn more than twice the minimum wage for something that should be considered a basic human right, leaving them with little left over for other basic needs and just a step away from homelessness.”

Even though Vermont’s minimum wage has increased annually for the last several years year, it is not enough to pay for decent housing:  2.2 full-time jobs at minimum wage – or 88 work hours a week — are needed to afford the average two-bedroom apartment.  A full-time minimum wage worker in Vermont can only afford $499 a month for rent and utilities, leaving a gap of $600.

While some might consider this is an unfair comparison because they think most minimum wage workers are high school students, this is not the reality.  According to the latest data from the Bureau of Labor Statistics, the average age of a minimum wage worker is 35 years old, and 88% are at least 20 years old.  Half are older than 30, and about a third are at least 40.

“Our chronic housing shortage and affordability gap make it harder for low-income and vulnerable Vermonters to find and retain housing,” said Ted Wimpey, Director of the Champlain Valley Office of Economic Opportunity’s statewide Fair Housing Program and Chairperson of the Affordable Housing Coalition.  “To make true and lasting headway against this shortage and towards the goal of ending homelessness, we need significant new state and federal investments in affordable housing, coupled with rental assistance for the lowest income families, and supportive services for those with the greatest challenges.”

Unfortunately, federal funding levels for housing, rental assistance and supportive services are far below what they were five or six years ago.  The state of Vermont suffers from chronic budget shortfalls, preventing it from making the needed investments.  Key federal programs like HOME and Community Development Block Grants have been underfunded for years.  Congress still has not seen fit to restore all the rental assistance vouchers lost through sequestration.   The State has shortchanged the Vermont Housing and Conservation Board, our primary tool for increasing the state’s affordable housing portfolio, for years.  It has been unable to make the necessary increases to such key housing safety net programs as the Vermont Rental Subsidy Program, which helps close the gap between what low-income Vermonters can afford and what’s available on the market.

Additional findings from Out of Reach:

  • The national Housing Wage is $20.30 in 2016.
  • Vermont is the state with the sixth largest shortfall between the two-bedroom housing wage and the renter wage.
  • Vermont is the seventh most expensive state for rural (non-metro) areas.
  • Vermont is the 13th most expensive state in the nation for renters.
  • The Housing Wage in the greater metropolitan area of Burlington is $26.08, almost $5.00 an hour higher than the state average.
  • The one-bedroom Housing Wage is $16.58 an hour ($34,479 a year), requiring 69 work hours a week at minimum wage to afford the monthly rent of $862.
  • Someone with a disability living on Supplemental Security Income (SSI) can only afford $236 a month, leaving them $863 short for a two-bedroom, and $626 short for a one-bedroom apartment.

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For additional information, visit: www.nlihc.org/oor/.

For a link to the full press release and supplemental materials, click here.

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The Vermont Affordable Housing Coalition is a statewide membership organization dedicated to ensuring that all Vermonters have decent, safe and affordable housing, particularly the state’s low and moderate-income residents, elders, people living with homelessness, and people with disabilities. For more information on the Vermont Affordable Housing Coalition, visit
www.vtaffordablehousing.org
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The National Low Income Housing Coalition is dedicated solely to achieving socially just public policy that assures people with the lowest incomes in the United States have affordable and decent homes. For more information on the National Low Income Housing Coalition, visit www.nlihc.org<