High rent, low wages contribute to housing crisis

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East Village Estates, a low-income housing development in Jackson

R.L. Nave/Mississippi Today

East Village Estates, a low-income housing development in Jackson

A phalanx of local and state officials cut the ceremonial ribbon at East Village Estates, an affordable housing development in the shadow of the Jackson Medical Mall, on May 19.

Developers broke ground on the project, made up of 44 town homes built with financing from the federal low-income housing tax credit program, in December 2013. Also in the works are plans to expand the development as well as build another 88 town homes near downtown Jackson.

 

Despite recent efforts, advocates say, approximately 286,000 Mississippians still have unmet housing needs. The state of Mississippi is facing an affordable housing crisis, the causes of which are multifaceted.

Phil Eide, a senior vice president at Hope Enterprise Corp., a Mississippi-based financial services nonprofit organization, says there is both a shortage of good-paying jobs in the state as well as affordable quality homes for people to rent and buy.

“Overall, it’s bleak and it has been bleak for very low income families that are trying to eke out a living,” Eide said.

Mississippi’s challenges reflect a broader national trend, according to Out of Reach, a new report from the Washington, D.C.-based National Low Income Housing Coalition. The report shows that nationally a renter must earn $20.30 an hour to afford a two-bedroom apartment; $16.35 per hour for a one-bedroom unit.

Another way to look at it, the report’s authors write, is that a person making the federal minimum wage of $7.25 per hour (which is also the state minimum wage in Mississippi) would need to have almost three full time jobs or work approximately 112 hours per week all year long to afford a two-bedroom at fair market rent.

In Mississippi, approximately 31 percent of households are made up of renters, who earn a mean wage of $10.64 per hour. Here, renters have to work 78 hours every week to afford a fair-market rent of $732 per month for two-bedroom housing.

Scott Spivey

Scott Spivey

Scott Spivey, executive director of the Mississippi Home Corp., a quasi-governmental agency that administers financing for affordable housing programs, said the fact that rents have exceeded wages make it hard for families to pay their rent every month and put some cash aside for emergencies.

“A lot of families in Mississippi, housing costs are so high that a sick child or broken arm is the difference between being able to pay or not pay bills that month,” Spivey said.

The U.S. Department of Housing and Urban Development estimates that housing is considered affordable if it’s less than 30 percent of wages. Spending more than that means housing is increasingly unaffordable because it starts eating into other household expenses such as groceries and health care.

Compounding the problem in Mississippi is the 6 percent rate of unemployment, 44th among the states, as of April 2016, according to seasonally adjusted Bureau of Labor Statistics.

The combination of high unemployment and low wages for Mississippians struggling to pay rent creates myriad quality-of-life issues, said Hope’s Phil Eide.

“How much time do we expect people to be away from their homes and not be with their families?” Eide asked.

Clarence Chapman, president of Oxford-based Chartre Consulting, which developed the East Village Estates in Jackson and several others around the state, said his projects are designed around improving the quality of life for residents by providing safe, stable neighborhoods in addition to family support services.

“In order to rebuild your communities, you have to rebuild your people … and you do that around your homes,” Chapman said.

Chartre and other developers build homes with low-income housing tax credits. Currently, 12 such projects are ongoing in Mississippi. The Internal Revenue Service provides Mississippi with $6.8 million in tax credits to award each year. Developers apply to the state for the credits, which investors purchase to offset their federal tax bills over 10 years, which subsidizes the cost of the housing project.

Federal officials point to the housing tax credit program, the federal Section 8 program and other federal initiatives as examples of the private and government sectors working together to solve the affordable housing shortage, which includes a $26 billion backlog for public-housing renovations.

Doris Franklin, executive director of Christian Housing Development Corp. in Columbus, said many families there are trapped in older housing because there aren’t enough new homes being built.

“There’s a lot of existing housing, older housing that families are taking as the last resort,” she said. “There’s very little building going on and a lot of rentals. People are continuing to rent because it’s easier.”

Some relief could come from an injection of cash for federal housing tax credits. Last week, U.S. Sens. Maria Cantwell, D-Washington, and Orrin Hatch, R-Utah, introduced legislation to increase the amount of tax credits states receive by 50 percent in the next five years by sweeping unused funds from other tax credit programs.

Mississippi officials and housing advocates say they plan to lobby the state’s congressional delegation to support the bill.

  • LB

    “Here, renters have to work 78 hours every week to afford a fair-market rent of $732 per month for two-bedroom housing.”
    Sounds perfectly reasonable to me. Two people, each working a full time job, should come in just over 78 hours.
    As a personal anecdote, when I moved to Mississippi I was astonished by how affordable hosing was.

    • Nakiya Beaman

      I think you missed the point. It says, “In Mississippi, approximately 31 percent of households are made up of renters, who earn a mean wage of $10.64 per hour.” That 31% of households that rent make a MEAN wage of $10.64 per hour. It does not explain the other 69% who do not make that much or the other hours they have to spend working to meet other needs such as food, children, transportation or that Mississippi has a large body of college students that can neither work full-time or afford housing by themselves. I dont know many who work jobs that pay more than 8 an hour. Areas like Jackson lack good paying jobs for its unhealthy, uneducated population. So it might be affordable for you in comparison to where you previously lived or the job that you have but for most, it isnt.

      • LB

        Ms. Beaman,

        With respect, the sentence you quoted means that 31% of Mississippians are renters and 69% are homeowners. The 31% of Mississippians that comprise renters earn an average of $10.64 per hour. In no way does the sentence in question mean that 69% of Mississippians earn less than $10.64 per hour.

        I understand that many people struggle to make ends meet, I’ve been there. People who are struggling financially should delay starting families or attending school. It is wholly irresponsible to take on extra burdens (family, school) and expect anyone else to fill the gap. I personally attended college part time because I couldn’t afford to go full time. I also delayed beginning a family until I was financially stable. Adulthood requires sacrifices.

        To anyone grinding away making minimum wage: keep at it. Show up to work with a good attitude, show up early, show up looking sharp, work as hard as you can – and you will get where you want to go.

        • Nakiya Beaman

          Excuse my misinterpretation dear sir. I do apologize for the misinterpretation. I misplaced the modifier. Doesn’t mean that there isn’t a problem that forces people to live together and stay together and bounds them to poverty and just barely getting by. I just graduated myself and I don’t believe in holding other people to my standards. Equity not equality. We still need higher paying jobs and greater investment into community long term. Short term sacrifices don’t necessarily equal a long term fix which is why we’re in the shape we’re in.

          • LB

            Ms. Beaman,
            Congratulations on your graduation! It’s a big accomplishment.
            Equity is a great ideal, and we are ruled by laws that promise equity. But equity does not garauntee equal outcome.
            I submit to you that current inequalities (what you perceive as a lack of equity) are the result (with exceptions) of behavior, of choices. People who stay in poverty for a lifetime in this country are generally victims of their own choices.
            Please don’t think that your current economic struggle is lasting. Almost everyone I know struggled financially through their twenties and into their early thirties. Such is life: you have to start at the bottom unless you are fortunate enough to have wealthy and generous parents.
            If you work hard and make good choices you will end up with that higher paying job you say we need more of (no one hands out good paying jobs – they are earned through hustle, innovation, or a combination thereof). One day, when you’ve made it, you can invest all you want in the community of your choice.