High rents, low wages: Study shows southwest Minnesota in need of more affordable housing
WORTHINGTON — Nearly a quarter of all renters in the six counties of far southwest Minnesota are spending half — and in some cases more than half — of their total income to cover their monthly rent bill, according to a recently released study by the Minnesota Housing Partnership.
The study, which examines rental unit availability, median incomes and housing construction, notes that higher rents in 82 of Minnesota’s 87 counties could spell trouble for renters.
Leigh Rosenberg, research and communications director for Minnesota Housing Partnership (MHP), said households paying more than 30 percent of their income are considered for exceeding affordability standards set by the U.S. Department of Housing and Urban Development. Extreme cost burden is met when households must pay more than 50 percent of their income for housing.
“When households are paying more than half of their income (on housing), it’s a much greater likelihood that families are likely skimping on other basic needs in order to cover their housing costs,” Rosenberg explained. “It’s such an extreme situation — especially when you consider the fact that the median renter household income is actually very low.”
In southwest Minnesota, the median income of renters ranges from $21,429 in Cottonwood County to $32,743 in Murray County. Cottonwood County also has the most affordable/available rental units of the six counties, while Murray County has the least number of affordable/available units.
“When your median renter household is earning so little to start with — and you can imagine half of the income going toward housing costs — people are in situations where they may not have enough (money) for medication, school supplies, diapers, transportation costs,” Rosenberg said.
Perusing a color-coded map, Rosenberg said, “There does look to be a concentration of counties (in southwest Minnesota) that have more of a cost burden than most.”
She also said there’s no Minnesota county where there isn’t less than 10 percent of households paying rents that exceed affordability standards.
Aging housing stock
While southwest Minnesotans are paying high rates for rents, those rents are often paid for aging properties in need of general upkeep.
“What it means when we see older housing stock is that often … the homes are draftier and need more attention,” Rosenberg said. “For low-income renters and homeowners, when your house is super drafty and cold in the winter, people’s energy and heating costs can be really high. That’s something to be on the lookout for — as well as health and safety issues.”
While one can look at the information in the study and conclude that southwest Minnesota needs more housing and more affordable housing — and that its residents need to earn higher incomes — none of those issues can be easily solved.
Rosenberg said MHP is focusing its efforts on policy work at the state and federal levels to ensure there are more resources for low- and moderate-income households.
“That’s something we’re working on year-round, year after year,” she added. At the same time, MHP wants to make sure funding remains adequate for existing programs.
At the federal level, Rosenberg said both the House and Senate currently have proposed budgets for housing that would result in a net cut in programs. The reason: Congress must adhere to caps and sequestration.
That’s a concern for MHP.
“Not only do we have inadequate housing as it is, we actually need more funding than what we get,” Rosenberg said.
Also at the federal level, MHP is working to get mortgage interest deductions converted to tax credits.
“It would continue to benefit homeowners with mortgages of $500,000 or less,” Rosenberg said. “That would result in savings to the federal government, which could then be put into increasing affordable rental housing.”
Meanwhile, at the state level, MHP continues to work on its agenda for the next legislative session. Considering it will be a bonding year, Rosenberg said there will be a request for some bonding funds for housing.
“We’ve seen that bonding can really successfully be used to support affordable housing,” she added.
Correlation to homelessness
Rosenberg said there is a link between extreme housing affordability and homelessness. Although people in southwest Minnesota may not recognize those who are homeless, she added, it does exist.
“Folks may be living in areas where they’re just not seeing it — people doubling up, staying with friends, living in fish houses or sometimes in the woods,” she said. “You may not see it … but that doesn’t mean there isn’t some amount of homelessness everywhere.”
Providing housing services to families and individuals — good solutions — can end homelessness, and Rosenberg said there is a need to prioritize policy to address the homeless.
A new homeless count will be conducted in October in Minnesota. The last count, taken three years ago, showed an estimated 14,000 individuals were homeless on a given night. The rate of homelessness had increased by 32 percent statewide from 2006 to 2012.