The average renter in the Chicago area does not earn enough to comfortably afford a modest apartment, a study by the National Low Income Housing Coalition reported Wednesday.
With rents climbing sharply since the housing bust, individuals — and especially families — are having to stretch further on rent. Consequently, higher housing costs are forcing people to skimp on other necessities such as food, child care and transportation, said Andrew Aurand, vice president of research for the coalition.
Focusing particularly on the needs of families, the research shows the median rental price of a two-bedroom apartment in the Chicago area is $1,176 a month. Based on the average pay of renters in the metropolitan area, only $886 is affordable, the coalition reported. The average hourly pay for the 1.1 million renters in the area is just $17.03 an hour, or about $35,422 annually.
To afford the typical two-bedroom at $1,176, a renter in the Chicago area would need to be earning $22.62 an hour, or $47,040 annually. That would easily be manageable if the person were earning the metro area median salary of $76,900. But renters average less than half of that, Aurand said.
To identify average renter income, the researchers used Bureau of Labor Statistics figures on pay. They considered rents “affordable” when no more than 30 percent of income is spent on housing.
The lowest-income households are especially squeezed, the report said. Their median pay is just $23,070 a year, which means they can only afford $577 a month in rent. While there are subsidies for low-income people, only 1 in 4 of those eligible for the aid actually receive it because there are waiting lists, Aurand said.
The affordability issue extends throughout the country, and the level of financial pressure on Chicago-area renters is similar to national averages, he said. In Chicago, incomes are higher than the national average, but so are rents, he said.
In Cook County, where 42 percent of households are renting, renters make an average of $18.34 an hour, or $38,147. That would mean they could afford $954 a month. But even a one-bedroom isn’t affordable at the average income level of Cook County renters. The research indicates a household would need to be earning $19.25 to afford the typical modest one-bedroom.
At the current renter income level of $18.34 an hour, a person would have to work 1.2 jobs to earn enough to pay for the average apartment.
A family depending on a minimum wage of $7.25 per hour would need a single worker to take on 2.8 full-time jobs to afford the average U.S. two-bedroom apartment, said Diane Yentel, president of the housing coalition. That’s 112 hours per week for all 52 weeks of the year, leaving no time for anything except working and sleeping eight hours a night, she said.
The coalition is urging local and national governments to provide incentives for constructing more affordable housing, and Yentel suggested that some funding would be available if the government cut back the mortgage interest deduction for affluent homeowners.
In Chicago, Bob Palmer, policy director of Housing Action Illinois, said the state should pass an emergency spending bill and provide $9.3 million for homeless shelters and $65 million for building affordable housing through the Illinois Housing Development Authority.
Shelters are needed, he said, because “we are a long way from having enough affordable housing.”
During the last couple of decades, the number of affordable units has declined while demand has grown, Aurand said. Fewer people own homes now than they did before the housing crash. Millions lost homes and suffered job setbacks, so millions now require rentals at the same time that there has been a population boom of people in their 20s and early 30s — a group that typically rents. In addition, baby boomers are retiring, and a significant number are interested in renting.
Pressure on affordable housing is expected to intensify as baby boomers age and seek senior living arrangements.
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