Number of America's Working Families Spending More Than Half Their Income on Housing Grows 76 Percent, New Study Finds
29 April 2005 - 6:50PM
PR Newswire (US)
Number of America's Working Families Spending More Than Half Their
Income on Housing Grows 76 Percent, New Study Finds Compelling Data
Also Reveals 6 Out of 10 Immigrant Working Families With Critical
Housing Needs Are Hispanic - One-Third Are Hispanic Families From
Mexico WASHINGTON, April 29 /PRNewswire/ -- In just over half a
decade the number of America's working families paying more than 50
percent of their income for housing has grown 76 percent, according
to a new study released today entitled The Housing Landscape for
America's Working Families 2005, conducted by the Center for
Housing Policy, the research affiliate of the National Housing
Conference (NHC). Specifically, in 1997 2.4 million working
families spent more than half their income on housing, but by 2003
this number had grown dramatically to 4.2 million. This
comprehensive study also compares immigrant working families to
their native-born counterparts and reveals that immigrant working
families are 75 percent more likely to pay more than half their
income for housing. Working families are defined as low- to
moderate-income families that work the equivalent of a full-time
job and earn from the minimum wage of $10,700 and up to 120 percent
of the median income in their area. Freddie Mac, one of the
nation's largest investors in residential mortgages, funded the
study. This study focuses on working families that had critical
housing needs between 1997 and 2003, and was released at an
Affordable Housing Forum in Los Angeles sponsored by Century
Housing, Freddie Mac and the NHC. One of every 8, or 14.1 million
of all families had critical housing needs in 2003 -- that means
they paid more than half their income for housing, and/or lived in
physically dilapidated conditions. A total of 5 million of these
families are low- to moderate-income working families. In addition,
6 out of 10 immigrant working families with critical housing needs
are Hispanic and one-third are from Mexico. A severe cost burden is
the reason why almost 85 percent of working families had critical
housing needs while the other 15 percent were living in physically
dilapidated conditions. "These new findings help shed light on a
troubling trend across America -- working a full-time job does not
guarantee families a decent, affordable place to live," said
Barbara Lipman, research director for the Center for Housing
Policy. "In fact, the housing problems of working families are more
persistent and pervasive than many experts may have thought, and
are not only confined to cities, renters, or the East and West
coasts." "It's vital for the public and private sectors to work
together on this issue that affects one of the country's greatest
sources of strength -- working families," said Bob Tsien, senior
vice president of Freddie Mac. "Affordable housing needs to be
addressed nationwide for both renters and homeowners. Every family,
regardless of income, should have the opportunity to live in
decent, affordable housing." Owning vs. Renting In 1997 the number
of working families with critical housing needs was split roughly
50-50 between owners and renters at 51 percent of homeowners and 48
percent of renters. However, by 2003 the number of homeowners with
critical housing needs reached 55 percent and the number of renters
with these needs was lower at 45 percent. In addition, most
homeowner and renter working families with critical housing needs
were paying more than half their income for housing, but homeowners
were more likely to face this problem than renters at almost 9 out
of 10 versus 8 out of 10 respectively. Affordability does, however,
account for a growing share of critical needs among renters. For
example, in 1997, affordability was the problem for approximately
71 percent of renters with critical housing needs, and the problem
grew steadily to 79 percent in 2003. Working family renters with
critical housing needs were more than twice as likely as their
homeowner counterparts to live in dilapidated conditions. Suburbs
vs. Central Cities When comparing suburbs to central cities, most
homeowners with critical housing needs lived in the suburbs, and 1
out of 4 lived in central cities. For renters, more than half lived
in central cities, 4 out of 10 lived in suburban areas, and less
than 1 out of 10 lived in non-metropolitan localities. A total of
42 percent of all working families with critical housing needs
lived in the suburbs in 2003. This compares to about 39 percent of
working families with critical housing needs that lived in central
cities -- dispelling a popular myth that families with these needs
are primarily found in cities. Approximately 20 percent, or 1 in 5,
resided in non-metropolitan areas. Regional Data By region, the
data reveals that the highest incidences of critical housing needs
are found in the West and Northeast. However, despite slight
declines between 2001 and 2003 in the South and Midwest, all four
regions have seen substantial growth in critical needs since 1997.
Crowding, although it has remained relatively stable for working
families since 1997, is highest in the West where in 2003 working
families were two to three and one-half times more likely as
working families in other regions to live in housing with more than
one person per room. Immigrant vs. Native-Born From the total
number of working families with critical housing needs, the new
study also compares native-born and immigrant families. According
to the data, immigrant working families are 75 percent more likely
than their native- born counterparts to pay more than half their
income for housing. A total of 15 percent of immigrant working
families, compared to 8 percent of native-born families, pay more
than half their income for housing. Also, contrary to conventional
wisdom, it is not only recent immigrant arrivals that experience
housing problems. Of the low- to moderate-income immigrant working
families with critical housing needs more than 50 percent arrived
in the United States before 1990, demonstrating that critical
housing needs decline little, if at all, with the length of time
immigrant families have lived in the U.S. This compares to 25
percent of immigrants that arrived between 1990 and 1996 and 23
percent that arrived after 1996. The critical housing needs of
working families are greater for immigrants than for native-born in
all regions. The disparity is especially large in the Northeast,
where immigrants have almost one and one-half times the rate of
critical housing needs than native-born. In terms of crowding,
rates decline little, if at all, with the length of time immigrant
working families have lived in the United States. In addition, at
just under 25 percent, Mexicans are much more likely to be crowded
than other immigrant groups, followed at some distance by other
Latin Americans, at less than 12 percent. Crowding is highest in
the West where 1 in 5 immigrant working families are affected.
Affordable Housing Forum At today's Affordable Housing Forum in Los
Angeles sponsored by Freddie Mac, Century Housing and the NHC,
experts discussed the significance of these findings and solutions
for helping to ensure decent, affordable housing for all Americans.
"We are bringing together housing experts to learn about the study,
and to discuss their experiences and strategies for the affordable
housing crisis in America," Tsien added. "This report and forum are
steps in the right direction toward solving the housing needs in
communities nationwide." "The startling data in this report
highlights the need for financial institutions and all levels of
government to address the growing disparity between the cost of
housing and the incomes of workers and their families," said NHC
Chairman G. Allan Kingston, president and CEO of Century Housing.
"Public agencies and the private sector must work hand-in-hand to
make use of new financial tools, local land-use incentives, and
regulatory reforms to build more housing. Unless we continue to
invest in housing affordable for our workforce, our economic future
is at risk." The Housing Landscape for America's Working Families
2005 combines and updates the Center's previous work, which over
the last five years has helped to detail the critical housing needs
of working families nationwide. For the full study, please go to
http://www.nhc.org/. Center for Housing Policy The Center for
Housing Policy is the nonprofit research affiliate of the National
Housing Conference (NHC) and combines state-of-the-art research
with the insights and expertise of housing practitioners. The
Center works to broaden understanding of America's affordable
housing challenges and examines the impact of policies and programs
developed to address these needs. Freddie Mac Freddie Mac is a
stockholder-owned company established by Congress in 1970 to
support homeownership and rental housing. Freddie Mac fulfills its
mission by purchasing residential mortgages and mortgage-related
securities, which it finances primarily by issuing mortgage-related
securities and debt instruments in the capital markets. Over the
years, Freddie Mac has made home possible for one in six homebuyers
and two million renters in America. For more information, visit,
http://www.freddiemac.com/ DATASOURCE: Center for Housing Policy;
Freddie Mac CONTACT: Michele Anapol of the Center for Housing
Policy and NHC, +1-202-466-2121, x226, Cell: +1-703-862-3033; or
Robbie McPherson of Century Housing, +1-310-642-2032; or Patti
Boerger of Freddie Mac, +1-703-903-2445 Web site:
http://www.nhc.org/ http://www.freddiemac.com/
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