As a burgeoning young professional fresh out of graduate school, I knew I couldn’t afford to buy a home right off the bat, but I could afford to rent wherever I eventually landed that dream job. Right?
Not so fast, says a recent study from the Joint Center for Housing Studies of Harvard University. It tells us that affordable rent and the availability of apartments, especially cheaper ones, hasn’t kept up with demand.
The problem has worsened since the recession.
“In 1960, about one in four renters paid more than 30 percent of income for housing. Today, one in two are cost burdened,” according to the study, America’s Rental Housing.
The Harvard study further explains, “By 2011, 28 percent of renters paid more than half their incomes for housing, bringing the number with severe cost burdens up by 2.5 million in just four years, to 11.3 million.”
In a market where rentals are in such high demand, safe, clean and affordable rentals can be extremely hard to find – especially in many of the small cities of the Intermountain West. This can be bad news for communities that are desperately trying to recruit new businesses and a highly educated workforce. If young professionals can’t afford to get started in your community by finding an appropriate rental, it is questionable that they are going to relocate there, much less plant roots.
This week, I once again turn to the Department of Housing and Urban Development’s (HUD) Location Affordability Portal, a tool they developed with the Center for Neighborhood Technology that maps the affordability of locations by combining housing and transportation costs (see images at the bottom of this blog). It can function as a kind of interactive affordable rent map. I looked at the Western Colorado counties of La Plata, Eagle and Summit to see how they fared on affordability when combining typical rental costs with transportation expenses. Interestingly, all three came in just under 45 percent of total income spent on combined costs, which technically is affordable – but barely.
But are these affordable rentals available to new residents, and if so, how long will this remain the case?
The Colorado Division of Housing completes a quarterly survey of rental stock for select counties across Colorado, and reported that in the past year, all of these counties had under a 5 percent vacancy rate, with some dipping below a 2 percent vacancy in 2012. Anything under 5 percent constitutes a tight rental market, which can drive up costs and compromise the affordable rental stock.
As mountain-town markets recover, these numbers are bound to tighten even further. And, in places like these, where home ownership is especially expensive and out of reach for young professionals, the importance of an affordable, accessible rental stock cannot be understated. Reports like America’s Rental Housing emphasize that this affordability is becoming increasingly stressed, as demand for rentals continues to grow. It is critical that new residents can afford to “get started” in your community, and the easier it is for them to afford to get started, the easier it will be for your community to attract young, educated talent.
Again, my point is that as your community considers its economic development plan, housing diversity must be a key component. Zoning codes should respond by allowing for greater housing diversity, smaller units, smaller lots, and accessory dwelling units. Without decent, affordable housing, those young professionals and businesses that are hoping to relocate to your community may be forced to consider an alternative location.