Maine Musings: Ending Youth Homelessness

Did you know…Working at minimum wage of

$7.50/hr
Each WEEK you
have to work

91HOURS!
To afford a modest
2-bedroom
apartment at
Fair Market Rent in ME

Out of Reach 2016, a new report from the National Low Income Housing Coalition tells us that in no state, 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 states and 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.

Mainely Kids

In Maine, the Fair Market Rent (FMR) for a two-bedroom apartment is $886. In order to afford this level of rent and utilities — without paying more than 30% of income on housing — a household must earn $2,954 monthly or$35,453 annually. Assuming a 40-hour work week, 52 weeks per year, this level of income translates into an hourly Housing Wage of $17.04 per hour.

In the Portland HMFA, (HUD [Housing and Urban Development] Metro Fair Market [rent] Area), the Housing Wage is $21.33 an hour.

In the York-Kittery-South Berwick HMFA it rises to $23.00 an hour.

Nationally, as in Maine, rents are rising, wages are lagging behind, and there is a limited supply of affordable housing. As Out of Reach reveals, it becomes more difficult year after year, for renters across the country to remain housed.  Many put more than half their income towards rent, and then are forced to choose which bills they can pay and which necessities they will forego. With all these barriers to renting an apartment, it’s easy to see how an individual might end up doubled-up with family or friends, severely burdened by the cost of his/her housing, or homeless.

Every year the Department of Housing and Urban Development (HUD) requires communities to conduct sheltered counts of people living in emergency shelter or transitional housing. Every other year, HUD requires communities to conduct unsheltered counts of people living in a place unfit for human habitation (such as in an abandoned building or in a park).

Point in Time (PIT) Counts are a measure of the number of homeless people on a specific day (hence the point in time reference). This type of counting is known as “taking a snapshot” of the situation.

What the Point in Time Count Measures

  • The PIT Count is administered by HUD’s more than 400 Continuums of Care (CoCs), which are local planning bodies responsible for coordinating all homelessness services in a geographic area.
  • During even-numbered years, CoCs are only required to count sheltered persons (those living in emergency shelters and transitional housing), although many CoCs voluntarily collect data about unsheltered persons during those years.
  • During odd-numbered years, CoCs are required to count sheltered and unsheltered persons—those living on the street or in another place not meant for human habitation.
  • The January 2016 PIT Count results reflect national snapshots of homelessness through the end of 2015.

The annual Point in Time Survey, was conducted in Maine on January 27, 2016. It found 1,192 people who were homeless that night throughout Maine, an increase from 1,134 in last year’s count – a 5% increase. Homelessness among people who were identified with a mental illness was up 36 percent while veterans experiencing homelessness was down 12 percent.

The increase in the number of people who were homeless was primarily reflected in the unsheltered count. The Portland Continuum of Care (City of Portland) unsheltered count increased by 4.4% and the Maine Continuum of Care (balance of the state) unsheltered count increased by 0.6%.

Also notable in the count were the dramatic swings within homeless subpopulations. One with the highest increases in homelessness was families with children.

Here is a look at the comparisons from 2015 to 2016 in Maine:

  • Individuals experiencing homelessness: Up 2.5%, from 755 to 775  (522 males, 250 females and 3 transgendered.)
  • Families experiencing homelessness: Up 9%, from 379 to 417 families. Of those in families:
    • Adults increased 12.4%, from 153 to 172.
    • And children increased 8.5%, from 224 to 245.
  • Chronic Homelessness: Up 3%, from 193 to 199.
  • Veteran homelessness: Down 12%, from 95 to 84.
  • People experiencing homelessness on the night of the PIT identified with a mental illness: Up 36%, from 366 to 575.
  • People identified as experiencing substance abuse: Up 39%, from 174 to 286.
  • Unaccompanied youth: Up from 80 to 83.
  • People reporting they experienced domestic violence at some point in their life: Up 25%, from 299 to 397. (The reason for the increase in mental health/substance abuse and/or domestic violence can be attributed to several factors including volunteers asking more inclusive questions and clients feeling more comfortable answering questions.)

The increases do not fully tell the story of all individuals who are experiencing homelessness in Maine. It only reflects those who were counted using the PIT methodology or who were located because of the increased efforts of trained volunteers to assure that all individuals who are homeless were included.

But one thing is clear, Children and families deserve an opportunity to succeed in school and life – success that we know is tied to having a stable home. Housing that meets the needs of individuals and families is an essential part of the infrastructure that builds a strong workforce and sustains local Maine economies.