slides: New Data Shows Who Can And Can’t Afford to Live in Worcester
Wednesday, August 21, 2013
The data, available on the organization’s website under the title “Paycheck to Paycheck,” compares the average wages of 76 occupations to median home prices and fair market rents to determine housing affordability in 207 metro areas nationwide. Fair market rents were considered for both one and two bedroom apartments.
For more details on housing and salaries in Worcester, see the slides, below.
“The Worcester metro area ranked sixty-eight among metro areas measured by greatest change in income needed to buy a home,” said Janet Viveiros, a research associate at the Center for Housing Policy. In layman’s terms, between 2012 and 2013 Worcester got much more expensive.
Who can afford what in Worcester?
Only 30 of the 76 occupations considered earned the annual salary necessary to affordably purchase a home in Worcester. An additional 30 occupations fell below the annual salary necessary to affordably rent a two-bedroom apartment, and 23 could not affordably rent a one-bedroom apartment.
Rent is considered affordable when it costs 30 percent of one’s income. A home purchase is considered affordable when, after a 10 percent down payment, mortgage and insurance payments cost 28 percent of one’s income, said Viveiros.
Those unable to afford any of the three housing options considered included wait staff, dishwashers, hairdressers and nurse’s aides. Those with government jobs seemed to fare the best financially with police officers, school teachers, mail carriers and family social workers able to afford all three housing options; and fire fighters and prison guards able to comfortably afford both one and two-bedroom apartments. Others that fared well included software engineers, electricians, accountants, and paralegals.
A growing gap
“What we continue to see is a widening gap between the wages that people can earn and what it costs to afford even a modest two bedroom apartment,” said Grace Carmark, Executive Director of the Central Massachusetts Housing Alliance.
“That means a lot of difficult choices,” said Viveiros. “People have to cut back on other essentials like food, healthcare, or childcare. Or it means that a lot of workers have to live well outside the metro areas, which means costly commutes.”
According to the Massachusetts Affordable Housing Alliance, there are 70,408 total housing units in Worcester; of those, only 9,575 or 13.6% are subsidized. That indicates a 4% increase in the number of affordable housing units in the past three years. These numbers though, have not kept pace with demand.
“I think a lot of people thought that when the whole housing crisis happened that rent would go down,” said Carmark, “but they’ve actually risen because you’ve got a whole lot of people who lost a house and can afford to pay more in rent. That’s created a pressure on the rental market that makes folks who are lower income less competitive.”
The gap between the average yearly wages of wait staff and the salary needed to affordably rent a two-bedroom apartment in Worcester is $13,000 annually. For housekeepers the gap is even greater at $14,000 annually.
“I think when people think about who’s homeless, they want to think it’s somebody they don’t know,” said Carmark, “but the reality is the people that are at risk are the people we see everyday: at the grocery store the people who check us out, or the waitresses when we go out to lunch.”
Carmark suggests that additional long term subsidy programs are needed to address the affordable housing issues in Worcester.
“Overall there is a lack of affordable housing resources because some families that are earning minimum wage need a long term subsidy and the state and local governments have frozen those,” Carmark said. “ What we need is more long term subsidy programs like Section 8, which work so well over so many years.”
Median Home Price
According to the National Housing Conference data, the median home price in Worcester for the first quarter of 2013 was $174,000.
Based on this amount, the annual income needed to affordably purchase a home in Worcester is $46,167.
Affordability is defined as mortgage and insurance payments costing 28% of annual income after a 10% down payment on a 30-year mortgage.
Fair Market Rents
The National Housing Conference indicates that 2013 fair market rents in Worcester are $768 for a one-bedroom rental, and $966 for a two-bedroom rental.
Based on those rents, an annual income of $30,720 is needed to affordably rent a one-bedroom in Worcester, and $38,640 for two-bedroom.
Affordability is defined as rent payments costing 30% of annual income.
Who can't afford rent (1)
The data compiled by the National Housing Conference considered 76 occupations and found that 23 fell below the annual income threshold needed to affordably rent a one bedroom apartment in Worcester.
Included in this list were hairdressers, nurse’s aides, wait staff, and dishwashers, among others.
Who can't afford rent (2)
Of the 76 occupations considered, 30 fell below the annual income threshold needed to affordably rent a two bedroom apartment in Worcester.
Included in this list were child care workers, dental assistants, office clerks and receptionist, and parking attendants among others.
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