The National Low Income Housing Coalition does my favorite, most useful report every year called Out of Reach. Their information is the easiest place to start to find out how bad housing is in Madison. Here’s their snapshot of the area.
First, some basics. This information is for the Madison HMFA or HUD Metro FMR Area. Dane County information is identical, I believe the statistical area includes Columbia, Sauk and Dane County, but I can’t confirm that this morning – seems impossible to find that info when I want to.
Second – FMR = Fair Market Rent, which is 40th percentile of the median rent in the area.
Third – AMI = Area Median income – again, the area is described that includes Madison, Dane County and a few surrounding counties.
Fourth – Mean vs. Median – Mean is the average. Median is the point at which half are higher and half are lower.
Fifth – “Affordable” means paying 30% of your income towards your rent
Finally – I think there is some info to be added to this report that I find helpful, so see that added in some sections. And, Madison is about 50% renters and 50% homeowners, Dane County is 38% renters.
BASIC BACKGROUND – WHO ARE RENTERS
Total households (2006-2010) 196,383
Renter households (2006-2010) 74,466
% of total households that are renters (2006-2010) 38%
The only county with more renters is Milwaukee at 47%. Nationally, renters are 33% of the income, so we have a high number of renters in our area.
BASIC BACKGROUND – INCOME
Minimum wage $7.25 ($15,080 annually)
Estimated mean renter wage $11.73 (24,398 annually)
Area Median Income – $82,900 (Annual), $39.85/hr
Estimated renter median income $34,382, $16.52
30% of AMI (Extremely Low Income) $24,870 ($11.95/hr)
SSI monthly payment $698 ($8376 annually)
I added some math to show annual incomes and hourly rates.
Families on “welfare” or W-2 got a decrease this year and only get $653 per month (was $673). That is $7836 per year.
The maximum unemployment payments are $363 per week or average of $1,573 per month or $18,876 per year.
BASIC BACKGROUND – RENTAL COSTS
This is the 40th percentile of the Median Rent
Zero bedroom FMR $576
One bedroom FMR $719
Two bedroom FMR $850
Three bedroom FMR $1,141
Four bedroom FMR $1,413
0 bedrooms are efficiencies, studios and it includes rooming houses and SROs.
SO, WHAT CAN PEOPLE AFFORD?
Rent affordable at renter median income $860
Percent of median renter income needed to afford 2 bdrm FMR 99%Rent considered affordable
– 30% of AMI $622
– 50% of AMI $1,036
– 80% of AMI $1,658
– Median income $2,073Rent affordable with full-time job paying min wage $377
Rent affordable with full-time job paying mean renter wage $610
Rent affordable to SSI recipient $209
So, if you make 30% of AMI, you can afford $622. But the Fair Market Rent for a one bedroom is $719. Of course, if you are on W-2 or SSI you are completely out of luck. Even with a minimum wage job you’d need to find a roommate.
HOW MUCH INCOME WOULD THEY NEED TO FIND AFFORDABLE HOUSING
0 bdrm FMR $23,040
1 bdrm FMR $28,760
2 bdrm FMR $34,000
3 bdrm FMR $45,640
4 bdrm FMR $56,520Percent of AMI needed to afford
0 bdrm FMR 28%
1 bdrm FMR 35%
2 bdrm FMR 41%
3 bdrm FMR 55%
4 bdrm FMR 68%
WHAT DOES THIS MEAN FOR MINIMUM WAGE WORKERS
Housing Wage/% of Minimum wage
0 bdrm FMR $11 (153%)
1 bdrm FMR $14 (191%)
2 bdrm FMR $16 (225%)
3 bdrm FMR $22 (303%)
4 bdrm FMR $27 (275%)Work hours per week at min. wage
0 bdrm FMR 61
1 bdrm FMR 76
2 bdrm FMR 90
3 bdrm FMR 121
4 bdrm FMR 150Full-time jobs at min. wage needed to afford
0 bdrm FMR 1.5
1 bdrm FMR 1.9
2 bdrm FMR 2.3
3 bdrm FMR 3.0
4 bdrm FMR 3.7
WHAT DOES THAT MEAN FOR THE RENTER THAT MAKES AN AVERAGE RENTERS WAGE
This is the percent of their wage they would need to spend on housing
0 bdrm 94%
1 bdrm 118%
2 bdrm 139%
3 bdrm 187%
4 bdrm 232%
And this is how many hours they’d need to work per week to pay for housing
0 bdrm FMR 38
1 bdrm FMR 47
2 bdrm FMR 56
3 bdrm FMR 75
4 bdrm FMR 93
Number of full time jobs needed to afford rent
0 bdrm FMR 0.9
1 bdrm FMR 1.2
2 bdrm FMR 1.4
3 bdrm FMR 1.9
4 bdrm FMR 2.3
Estimated percent of renters unable to afford 2 bdrm FMR 49%
The national median income is $67,367 – so Madison and Dane County have a higher median income. What this means is that when programs base their “affordable housing” programs on the median income in the area, it forces the “affordable housing” prices up. If “affordable housing” is based on what is affordable for people at 60% AMI, those rents are no longer truly affordable for families. “Very low income” people at 50% AMI just aren’t really going to find affordable housing beyond public housing or section 8.
These are the “affordable housing” rent levels for the City’s HOME program – compare to the market rents.
Low HOME Rent Limit
0 bdrm $432 for SROs, 610 for an efficiency ($34 over FMR)
1 bdrm $762 ($43 over FMR)
2 bdrm $899 ($49 over FMR)
3 bdrm $1078 – 1206 (could be $65 over FMR)
4 bdrm $1,202 – $1,458 (could be $45 over FMR)
Here’s the income levels for the affordable housing (has be be rented at no more than fair market rents) created with the rental rehab program in Madison
INCOME LIMITS (2012)
Household Size 80% of Median
1 person $45,500
2 persons $52,000
3 persons $58,500
4 persons $65,000
5 persons $70,200
6 persons $75,400
7 persons $80,600
8 or more $85,800
(This post is work in progress, expect a few changes as I gather more information and add links)
Good information here. Let me add to it because, while housing is often a household’s biggest expense, transportation is often the second biggest. It was not always that way because cities used to also have good public transportation systems, while a lot of people also lived within walking/biking distance of where they worked and shopped.
This prompted Chicago’s Center for Neighborhood Technology to talk about something it called the Household+Transportation Affordability Index that it suggested was much better that HUD’s 30% rule. The Center’s general URL is http://www.cnt.org/. Basically, it suggests that a better assessment tool is to use the figure 47% to indicate how much of a household’s income should be maximally spent on housing and transportation combined. Looked at this way, the true cost of rent would be different from the figures posted in your article, and would also make the mantra of “drive ’til you qualify” a poor way to assess eligibility for a mortgage.
Several years ago now, someone from the CNT gave a talk on the topic with information for this area. A PowerPoint of her talk can be seen at http://www.busadvocates.org/articles/householdcosts/AffordabilityIndex2.pdf. Other articles can be viewed at http://www.busadvocates.org/articles/householdcosts/index.html.
It is unfortunate that the City of Madison considered Transportation an environmental rather than social equity issue in its Sustainability Plan. Yes, transportation has an environmental dimension but it is much more. Good public
transit supports the dignity and freedom of all individuals, creates an open,
hospitable and welcoming community, respects the environment, opens economic
opportunity to all and moves people to where they need to go
Is that the median income for one person in Dane Co./Madison? It sounds high…the median income for one person in Wisconsin according to the US Trustee’s office (bankruptcy “mean” test)for fall 2011 is $41,800; about $56,000 for two.. (has been going down the last couple of years) and the “Home Affordable” guideline for what is affordable is 31% of GROSS income, so clearly rents in Dane County are more than that, as are many peoples’ mortgage payments. Very interesting info. My health insurance premiums now exceed my mortgage, though.
This describes how they get the numbers, http://www.huduser.org/portal/datasets/il/il11/medians2011_sig.pdf
I’m pretty certain its for a family of 4 – but I didn’t read the whole thing. Hud-speak puts me to sleep.