We have been focused on the local housing crisis. The reality is this is not just a Davis problem. In fact, according to a report this week, it is not just a housing problem. The headlines across the nation are that, despite the good economy, a minimum-wage worker cannot afford the rent for a two-bedroom apartment anywhere in the U.S.
Take a look at the Washington Post article from Wednesday: “The economy’s booming. Some states have raised minimum wages. But even with recent wage growth for the lowest-paid workers, there is still nowhere in the country where someone working a full-time minimum wage job could afford to rent a modest two-bedroom apartment, according to an annual report released Wednesday by the National Low Income Housing Coalition.”
That means not even in Arkansas, considered to have the cheapest housing in the nation. One needs to earn $13.84 per hour to afford a two-bedroom apartment there. Minimum wage in Arkansas is just $8.50 an hour.
Even the vaunted $15 living wage championed by the left would not make a dent in the majority of states.
In Hawaii, it would take $36.13 an hour ($75,000 per year) to afford a two-bedroom apartment. Minimum wage is just $10.10 in Hawaii.
In places like San Francisco, Marin and San Mateo Counties, one would need $60 an hour to afford a two-bedroom apartment. The average needed in California is $32.68, more than twice the minimum wage. In Sacramento, you would have to earn $27 an hour to meet the median rent of $1400 for a two-bedroom. In Davis, it’s closer to $1600 for a two-bedroom.
In San Francisco you would have to work a minimum wage job for 171.5 hours per week just to afford a market rate apartment.
“The housing crisis is growing, especially for the lowest-income workers,” said Diane Yentel, president of the National Low Income Housing Coalition. “The rents are far out of reach from what the average renter is earning.”
There is a reason why we have said that market rate multi-family housing is not going to be a solution for housing for families. The chief reason has been cost. This just demonstrates just how much the cost of apartments is problematic for families to afford to live in them.
Columnist Erica Smith wrote yesterday for the Bee, “There is nowhere in the United States where someone working a minimum wage job full time can afford to rent a ‘decent’ — read, up to code and not infested with mold and vermin — two-bedroom apartment. You read that right. Nowhere.”
At the same time, a different study came out this week from UCLA economist William Yu of the UCLA Anderson Forecast. The study looks at the disparity in homeless rates across the country and found five factors, including most notably median rent and median home value, which are strongly correlated with more people being unhoused.
“If we can improve the affordability and the availability of the general housing market … I think it will help in reducing the homeless problem,” said Professor Yu.
There are other factors that contribute to the homeless problem. His study, not surprisingly, found that “high percentages of homeless people suffer from mental illness (26%), substance abuse (18%), and domestic violence (24%).”
He concluded, “These individual at-risk factors interacting with the less affordable housing markets cause the rise of homelessness.”
Weather is a factor in the percentage of an unsheltered population. Professor Yu writes: “Hawaii and California have milder winters than Illinois and New York, for example, and we see higher unsheltered homeless rates in the former states. Homeless people are more likely to stay outdoors rather than in a shelter in a mild Los Angeles January than in a bitter New York or Chicago winter.”
But Professor Yu also found that, contrary to popular belief, homeless individuals are not moving to warmer climates from colder climates. Professor Yu found, for example, that 75 percent of L.A. County residents living on the streets had a home there before they lost it, and 65 percent of those unsheltered homeless individuals lived in L.A. County for more than 20 years.
The San Diego Union-Tribune pointed out that those blaming the weather for the rise in the homeless population are missing the mark. The study, they say, “made this argument seem like a lame excuse by politicians who don’t want to admit to their utter failure of leadership in addressing California’s severe housing crisis. UCLA economist William Yu found no evidence in the United States of a direct correlation between the quality of the weather and rates of homelessness. Instead, homelessness in America correlated strongly with housing costs.”
Erica Smith writes that “the higher the housing costs, the higher the rate of homelessness in a state.” Indeed, “What might be less obvious is that the findings also showed that most homeless people aren’t living on the streets because they’re mentally ill or addicted to drugs. They’re homeless because they can’t afford rent.”
She perhaps drew too fine a line there – it appears that mental illness is a factor, but it combines with cost of housing to produce homelessness. That makes intuitive sense. Higher costs of living make people, who are already more vulnerable, even more susceptible to becoming homeless.
Ms. Smith offers a few conclusions about these two studies
First, “[W]e Californians like to think of the housing crisis as our thing. And indeed, it is worse here than most places. But in reality, this is a U.S. thing. Unless you’re about to move to another country, you can’t escape it — and maybe not even then.”
Second, “[W]ith the economy booming and wages remaining stagnant, construction moving at a snail’s pace for all but the most expensive housing units and more Americans renting than they have been in the past 50 years, this situation is only likely to get worse.”
Finally, she notes: “When the average American renter makes $16.88 an hour and has to make $17.90 an hour to rent a decent one-bedroom apartment and $22.10 an hour for a two-bedroom place, that’s not just a crisis. It’s a catastrophe that must be addressed.”
A point she doesn’t make is that, while this is a national problem and a crisis here in California, we have to start addressing the issue locally and regionally. Davis has taken the first steps by providing more in the way of student housing, but more must be done.
We have to keep on top of UC Davis to make sure they follow through with their promises for 9050 beds over the next decade – and that won’t be easy.
But – and this is where I think a lot of people have misconstrued my remarks previously – I viewed student housing as the lowest hanging fruit. The most manageable crisis that we could alleviate. That is not the end of the story.
Student housing is easily defined, plus with students at 65 to 85 percent of all renters, it is the biggest chunk of rental housing here. But what these studies demonstrate, once again, is that market rate multi-family housing is not going to be the solution for family housing.
That doesn’t mean I’m opposed to attempting to solve the family housing problem locally, it means we are going to have to look beyond market rate multi-family housing to do it.
—David M. Greenwald reporting