What happens when skyrocketing rents meet stagnating wages among low-income workers? U.S. cities are finding out.
Earlier this month, the former front man for Talking Heads, David Byrne, wrote an essay about how New York was losing its artistic heart and creative edge because of the rising cost of living. “Middle-class people can barely afford to live here anymore, so forget about emerging artists, musicians, actors, dancers, writers, journalists and small business people,” wrote Byrne. “Bit by bit, the resources that keep the city vibrant are being eliminated.”
The plight of artsy types in cities gets a lot of attention these days, perhaps because it is personally relevant to lots of people in the media. And yes, working artists are vital to any city, especially a place such as New York that bills itself as a cultural capital. But forget, for the moment, about the artists. The deeper and more systematic erosion of urban life is happening among a less glamorous set of people – the ones who fill the tens of thousands of jobs that undergird every single U.S. city.
These are the home health aides, the fast-food workers, the janitors, the teachers’ aides, the delivery people, the manicurists, and countless others who are making more than minimum wage but less than enough to meet the soaring cost of living – not just in New York, but in cities around the country. These people, increasingly, are falling off the shaky ladder of economic viability, and many are being pushed into homelessness.
According to statistics from the National Alliance to End Homelessness, overall homelessness in the United States declined slightly from 2011 to 2012, falling by 0.4 percent. But the number of people in homeless families actually rose over the same period, by 1.4 percent. The NAEH report states what may seem like the obvious to account for the problem: “Homelessness is essentially caused by the inability of households to pay for housing.”
That inability is mushrooming, driven by increasing rents across much of the country and wages that aren’t going anywhere. According to the NAEH, 38 states registered an increase in fair-market rents between 2010 and 2011, with the average cost of a two-bedroom rental increasing by 1.5 percent nationally. At the same time, median household income decreased by 1.3 percent nationally, with only 14 states reporting increases. The number of households spending more than 50 percent of their income on housing – more than 50 percent! – went up 5.5 percent over the same period, with some 6.5 million households exceeding that threshold.
And the number of people living at the edge of homelessness has been increasing even more rapidly. Between 2010 and 2011, the number of poor people living “doubled up” in households – and thus at higher risk of experiencing homelessness – was up by 9.5 percent nationally, increasing in all but 11 states.
In some cities where rent is rising the most quickly, homelessness seems to be following suit:
Seattle and Portland are among the top 10 metropolitan areas with the biggest rent gains in 2012, according to a Trulia analysis of the 25 largest rental markets. At the same time, homelessness is on the rise.
A one-night tally taken in January of unsheltered homeless people in parts of King County, which includes Seattle, found a 2 percent increase compared to the same areas a year earlier. In the Portland region, 5 percent more people were living on the streets or in shelters on a night in January 2013 than in 2011.
“There is just a mismatch between what people earn and what it takes to pay for housing,” Sheila Crowley, chief executive officer of the Washington, D.C.-based National Low Income Housing Coalition told Bloomberg News. “Unemployment continues to be persistently high, and wage stagnation at the low end seems to go out as far as the eye can see.”
New York is in the lead of this troubling trend. As Ian Frazier writes in an extensive New Yorker piece about the city’s homeless policy this week, the working poor don’t stand a chance in the city’s bruising housing market (emphasis mine):
Manhattan is now America’s most expensive urban area to live in, and Brooklyn is the second most expensive. Meanwhile, more than one in five New York City residents live below the poverty line. Nearly one in five experiences times of “food insecurity” in the course of a year—i.e., sometimes does not have enough safe and nutritious food to eat. One-fifth of 8.3 million New Yorkers equals 1.66 million New Yorkers. For people at the lower-middle and at the bottom, incomes have gone down. The median household income in the Bronx is about thirty-three thousand dollars a year; Brooklyn’s is about forty-four thousand. Meanwhile, rents go steadily up. A person working at a minimum-wage job would need 3.1 such jobs to pay the median rent for an apartment in the city without spending more than thirty per cent of her income. If you multiply 3.1 by eight hours a day by five days a week, you get a hundred and twenty-four hours; a week only has a hundred and sixty-eight hours.
According to the Coalition for the Homeless in New York, the number of homeless people in New York City rose by 60 percent over the past decade, to nearly 51,000 in June of 2013. That number includes more than 12,000 homeless families.
The simplistic answer to this growing problem is to say, well, those people can’t afford to live in New York. They’re going to have to move. But that would ignore the reality of people’s lives (not to mention that reality that a city without low-wage workers would essentially grind to a halt).
Families that experience homelessness, and those at risk of homelessness, almost by definition lack the financial resources to make a move to some cheaper place hundreds or thousands of miles away. They are understandably reluctant to sever ties to family and friends where they have lived for perhaps all their lives (this reluctance is wise, as the risk of homelessness increases among people who live far from social support networks). And they are ill-positioned to find a job in a far-off cheaper city before they move there, meaning that even if they were able to make a wrenching move, they could find themselves in the same position once again.
“It doesn’t matter whether you think they should behave in a rational economic way and move,” says Nan Roman, the president and CEO of the NAEH. “They don’t. We have to deal with reality.”
Even moving to a suburb within commuting distance of jobs is unrealistic for most low-wage workers. The cost of housing is still significant, and the cost of transportation much greater: grueling commutes and finding adequate child care for longer hours take another kind of toll.
Roman, who has been working in the field since the 1970s, says that the housing landscape faced by working-class and poor people is profoundly different today than it was then. “There’s fewer and fewer places for working-class people to live,” she says. “There used to be a surplus of affordable units. You could always find a place to live.” But the destruction of single-room occupancy hotels and other forms of low-income housing ate away at that supply. Meanwhile, manufacturing jobs that paid a decent wage have largely vanished from many American cities, and the service jobs that replaced them simply haven’t kept pace with the cost of living.
Roman doesn’t have an easy answer for how to solve the urban housing crisis. She points to the success of rapid re-housing programs, which have helped newly homeless people get new housing quickly by paying deposits and moving costs, as well as negotiating with landlords — although the federal funding for that assistance is running out. She believes that everyone who earns less than 30 percent of the area median income should be provided with rental assistance. She says that government needs to help create more affordable housing, and points out that we subsidize other housing types in countless ways, such as the home mortgage tax deduction. But in the current political climate, of course, every dollar of funding is a battle.
The abundant backlash to David Byrne’s essay included plenty of comments suggesting that people who want to find cheap rents and artistic ferment should just suck it up and leave New York, making their way to Newark, or Philadelphia, or Detroit, or Wichita. Fair enough. But even if you can’t bring yourself to care about the fate of sculptors being priced out of Bushwick, it’s surely time to realize that the lack of affordable housing is a profound threat to the ecosystem of the city itself. You simply cannot run a place like New York or Seattle or San Francisco without working-class people.
New York mayoral candidate Bill de Blasio has made affordable housing a centerpiece of his campaign. If polls are any indication, he will soon have the chance to put his money where his mouth is. For many New Yorkers on the edge, it won’t be a minute too soon.
On the national level, Roman says, she is concerned about what will come next. “I’m a very optimistic person,” she says, laughing. “I work for an organization called the National Alliance to End Homelessness. I believe we can solve this, I believe we can be smart. But I’m worried at the moment. People just don’t make enough to pay for housing.”