Granite State Rumblings: Affordable Housing

Did you know…Working at minimum wage of

$7.25/hr
Each WEEK you
have to work

91HOURS!
To afford a modest
1-bedroom
apartment at
Fair Market Rent in NH

Out of Reach 2016, a new report from the National Low Income Housing Coalition tells us that in nostate, metropolitan area, or county can a full-time worker earning the prevailing minimum wage afford a modest two-bedroom apartment.

In 2016, the national Housing Wage is $20.30 for a two-bedroom rental unit and $16.35 for a one-bedroom rental unit. A worker earning the federal minimum wage of $7.25 per hour would need to work 2.8 full time jobs, or approximately 112 hours per week for all 52 weeks of the year, in order to afford a two-bedroom apartment at HUD’s Fair Market Rent (FMR). If this worker slept for eight hours per night, he or she would have no remaining time during the week for anything other than working and sleeping.

As Julian Castro, Secretary of the U.S. Department of Housing and Urban Development points out, “Three-quarters of extremely low-income families pay more than half of their income just to keep a roof over their heads, leaving less money for food, child care, transportation, and so many other basic necessities. And it’s not just people of very modest means who are working harder to make ends meet.  Last year, rising rents in a number of cities outpaced the rate of inflation, which is hurting low-and moderate-income Americans… The crisis is also affecting seniors, many of whom live on fixed incomes.”

According to the report, the lowest income households face the greatest housing affordability challenges. Extremely low income (ELI) households have income at or below 30% of their area median. On average, they can afford to spend no more than $507 per month on housing costs. An individual relying on Supplemental Security Income (SSI) in 2016 can only afford monthly rent of $220. Meanwhile, the national average monthly rent for a modest one-bedroom apartment is $850. The national average cost of a modest one-bedroom apartment would consume more than a single SSI recipient’s entire income. Such an individual would be unable to maintain shelter without housing assistance.

Wage stagnation and income inequality contribute to the gap between what people earn and the cost of their housing. From 2007 to 2015, the bottom 10% of wage earners saw a 0.2% increase in real hourly wages, while the top 5% saw an 8.7% increase, continuing a long-term trend of growing income equality. Between 1979 and 2013, the bottom 10% of wage earners saw a 5.3% decline in real hourly wages, while the top 5% saw a 40.6% increase.

The demand for rental housing is at its highest level since the 1960s.  In the past decade alone, the U.S. has added nine million renter households, but only 8.2 million rental housing units to its housing stock. Vacancy rates are at their lowest levels since 1985 and rents have risen at an annual rate of 3.5%, the fastest pace in three decades.

Growth in the supply of low cost rental units has not kept pace with the significant growth in demand. Between 2003 and 2013, the number of low cost units renting for less than $400 increased by 10%, but the number of renter households in need of these units increased by 40%.

In addition to raising the minimum wage, public investments in housing programs are essential to address the shortage of rental housing affordable and available to ELI and VLI households. One new and promising tool for addressing this shortage is the national Housing Trust Fund (HTF).

The HTF is the first new federal housing program in a generation to focus on Extremely Low Income (ELI) households. It will receive a first time allocation of nearly $173.6 million in the summer of 2016 for distribution to the 50 statesand the District of Columbia. At least 90% of HTF funds must be used to build, preserve, or rehabilitate rental housing affordable to ELI and Very Low Income (VLI) households. A maximum of ten percent (10%) of HTF funds can be used for affordable homeownership activities. At least 75% of funds must benefit ELI households, and up to 25% can benefit VLI households.

Out of Reach 2016 highlights the affordability gap between the cost of rental housing and the wages of millions of renters who do not earn enough to afford a decent and safe home without significant sacrifice. Low income renters face the greatest challenge. Higher wages and a greater supply of affordable rental housing are necessary. If we make further gains in minimum wage legislation and expand funding for the national Housing Trust Fund, we can address the affordability gap.

Thursday, June 16, 6:30pm – 8:00pm, Jim Rubens speaks at Hampstead GOP meeting, Hampstead Public Library, 9 Mary E Clark Dr, Hampstead, NH 03841

Click here to see more events in New Hampshire!


In New Hampshire, the Fair Market Rent (FMR) for a two-bedroom apartment is $1,097. In order to afford this level of rent and utilities — without paying more than 30% of income on housing — a household must earn $3,655 monthly or $43,865 annually. Assuming a 40-hour work week, 52 weeks per year, this level of income translates into an hourly Housing Wage of $21.09.

Mind the Gap: Housing Costs Outpace Earnings for Thousands of NH Renters
By Elissa Margolin

Many Granite State families breathed a little easier as New Hampshire gained jobs, and its leaders rightly took a victory lap as unemployment rates fell to the second-lowest in the nation.

But new reports show a side of the state’s economy that is not often measured: the significant gap between what families earn and what housing costs in NH.

According to the 2016 Out of Reach report, an annual look at what it takes to pay the rent around the country, NH families now need to make over $21 an hour to afford rent and make all ends meet. There are about 150,000 renter households in NH, and their mean salary is just $14.08 an hour, according to the report’s author, the National Low Income Housing Coalition.

Standard economic practice suggests no more than 1/3 of income is spent on rent and utilities in order to have enough left for groceries, childcare, and transportation. That means the average renter family should ideally not spend more than $732/month on housing expenses. Meanwhile, in NH, fair market rent statewide is $1,097 a month, and even higher in places like the Seacoast.

It’s not hard to see where the struggle begins.

The New Hampshire Fiscal Policy Institute (NHFPI) recently released two reports detailing how difficult it can be to make ends meet here in the GraniteState.  For instance, NHFPI finds that the incomes families need to secure basic necessities here in NH are actually several times the official poverty threshold.  A family of three living in the Strafford/Great Bay area, for example, needs an income of more than $63,000 per year to purchase essentials like housing, food, and medical and child care.

The upshot? Families are either paying more for housing than they can afford, sacrificing from groceries, or perhaps settling for situational childcare that is not of high quality or reliability.

The good news is New Hampshire has some tools in the toolbox to close the gap between housing costs and incomes and attain better outcomes for families, businesses and communities. The state recently removed a regulatory barrier standing in the way of private homeowners who wish to add accessory dwelling units to their homes, adding to the supply of units for people with disabilities, seniors, caregivers and young people just starting out. NH should now step up to fund its state housing trust fund in a meaningful way, as most other states do, in order to add more affordable rental homes to our inadequate supply. NH must also look at wage policies, including re-establishing its own minimum wage and raising it to a level that better meets the needs of the modern economy.

In the long run, housing must be included in the equation toward a more family-friendly economy.

Elissa Margolin is director of Housing Action NH, a statewide coalition of 80 organizations and businesses united around a common vision that everyone benefits when all Granite Staters have a safe, affordable place to call home. At www.housingactionnh.org.