Main Sections

Vermont's Housing and Wage Crisis Worsens, According to the Vermont Housing Finance Agency

Tuesday May 15, 2007

By Larry Johnson

   Vermont's increased homeless shelter use over the past few years may just be the canary in the mine shaft. According to the Vermont Housing Finance Agency there are approximately 4000 people in the state using homeless shelters. This is a sharp increase since 2000, and the length of stay has more than doubled from 11 average days in 2000 to 25 in 2006.

     There is, according to VHFA, a growing disparity between those who can afford to buy at the high- end of the real estate market and those who cannot afford anything. For instance, in 2000, only 48 homes in the state sold for a million dollars or more. In 2005, this number had risen to 1,673. At the same time, percentage cost for housing, both owned and rented, had risen far above the means of most Vermonters.

     The median Vermont household income is $48,000 a year. This represents affordable owned housing in the $143,000 range. Unfortunately, the median cost of an existing house has risen to $197,000. This would require a median income in the vicinity of $66,000. “Sixty-seven percent of Vermont's households have annual incomes below that figure. Only in one county, Essex, can “the median- income afford the median-priced home. At the same time, the median price for a newly constructed home rose to $282,000.

     If anything, the rental situation is even worse. Last year, the average rental cost of a two-bedroom apartment was $797, including utilities, a 10% increase over the previous year, and a 42% rise from 1996.  According to VHFA, “a household would need an annual income of just under $32,000 in order to afford a Fair Market Rental unit. But nearly 60% of Vermont's workforce-more than 163,000 people--- work in jobs whose median wages are below that figure.”  There are now 72,000 renter households in Vermont and 59% earn less than the “Fair Market Housing Wage.”

     Sixty- one percent of all Vermont households have one or less than one wage earner, imposing a huge burden on the household income, as wages fall behind the cost of living. Vermont Department of Labor has categorized and reported on 10 occupations that employ 21% of the workforce. These include cashiers, retail sales people, teacher's aids, bookkeepers, accounting and auditing clerks, registered nurses, wait staff, secretaries, elementary school teachers and cleaners. Only two of these categories, school teachers and registered nurses, were paid a median wage above Vermont's minimum housing wage of $31, 897.

    There are several reasons why Vermonter's are facing a housing/wage crisis. Vermont is one of the most taxed states in the country. We have the distinction of having one of the highest per capita property tax burdens anywhere; Property taxes are reflected in increased housing cost and this impacts the affordability of housing for a workforce that is struggling to keep up. Low hourly wages , relative to housing cost, is a critical problem, and the shortage of new, low-cost housing, primarily the result of cut-backs in federally subsidized housing over the past six years, has also contributed to the shortage and to the increased cost of living in Vermont.  

     In the past, 30% of one's income was designated for housing cost, both rental and owner-occupied. In 2005, one in ten households was paying more than 50% of its income for housing, and 46% of renter households were paying more than 30% for rent and another 1/4  were paying more than 50%  of their income for housing and utilities.  

     In 2006, Fair Market Rent state wide was $797 for a two-bedroom apartment. This would require a person to earn a minimum of $15.34 in order to afford this basic housing. In Addison County, the housing wage is $14.37, a little better than the average. In other words, one needs to earn this amount in order to pay for rental housing in Addison County. In the highest priced counties of Franklin and Chittenden, according to VHFA, it requires an income of $18.90 per hour for the same thing. The lowest, Caledonia, is only $11.75, but the hardship of owning or renting is not mitigated by this lower rate because wages are also significantly lower as well.  

     So we arrive at the question, How do average Vermonters continue to live in an economy that is pricing them out of their basic housing needs? The VHFA report offers some commonsense suggestions: state government should “strengthen programs that help Vermonters afford housing, and create policies encouraging affordable housing development; local officials can work to ensure their communities encourage, rather than discourage, housing development through their planning and zoning. They can create incentives for construction and/or rehabilitation of affordable housing, particularly in town centers, and they can bring other community leaders together to support housing and educate the public on the need for benefits of housing development.”

     It would appear that if the housing/wage problem is not quickly resolved several unpleasant things will result: our blue collar workforce will begin leaving the state in large numbers, creating a critical labor shortage. It will produce a growing number of homeless people, but most alarmingly, it will change the complexion and character of a place that we all care deeply about.             

Printer Friendly

Top

Advertisements

Search our Archives