People at the Gilmor Homes housing projects in Baltimore, Maryland. REUTERS/Eric Thayer

Nowhere in Baltimore can two full-time minimum-wage earners afford the median rent for a two-bedroom apartment, according to a new report.

For Baltimore’s Project C.O.R.E. urban redevelopment plan, the state of Maryland is offering up hundreds of millions of dollars to seduce investors into developing some of the city’s most blighted corridors. The challenge for those developers will be to find ways to ensure that new and renovated housing is affordable for low-wage earners. “Affordable,” however, has long-ago become an elusive target, especially in cities like Baltimore where both poverty and housing costs are out of control.

This double crisis has not only continued to keep very-low-income households from securing stable housing, but it’s also been slimming down housing options for working- and middle-class families, as well. So writes Philip M.E. Garboden, a doctoral candidate in sociology and applied math at Johns Hopkins University, in a new report for the Baltimore-based Abell Foundation. Even if wages were raised considerably—say, boosting minimum wages to $15 an hour—a family of four would still have a difficult time securing housing. Writes Garboden in the report:

I attempt to highlight what has changed in Baltimore and how the traditional adage that “Baltimore doesn’t have a housing affordability problem, it has a poverty problem” is increasingly missing the complexity of the issue. Indeed, focusing only on the city’s entrenched poverty masks emergent dynamics within the housing market and defers interventions that could help to mitigate rising housing costs at all levels.

Garboden did the math on what kind of housing would actually be available in Baltimore to a family with one full-time worker making $15.50 an hour. That would put the family right where it needs to be to afford an apartment at the city’s median rental rate, which is $774 per month. (Add in utilities, and median gross rent jumps to $944 per month.) But that family would have a tough time finding a two-bedroom at that price. In fact, the U.S. Department of Housing and Urban Development has determined that an “affordable” two-bedroom apartment in Baltimore is actually $1,232 per month. Meaning that a family would need at least one full-time earner who makes $24.64 per hour, or $49,000 a year, in order to live comfortably.

And yet, even increasing wages for a family like that would only address half the problem of accessing affordable, quality housing, given that rising rents are far outpacing rising wages.

“Raising the minimum wage would certainly help, especially for a family with two minimum-wage, full-time earners,” Garboden tells CityLab. “The issue there is that might move people out of the income crisis, but they’d still be in the rent crisis.”

As shown in the map below from the report, there are a few neighborhoods where a family could get by with a full-time worker making $17 or $18 an hour. But for most neighborhoods, the worker really needs to be making more than $20 an hour to get suitable housing, by HUD’s estimates.

(Abell Foundation)

“[Th]ere is no area in Baltimore in which two full-time minimum-wage earners could afford the median rent for a two-bedroom apartment,” writes Garboden.

A large swath of Baltimore’s working population don’t make anywhere near those wages. *The median household income in the city is $41,819, according to Census data; per capita income is $25,062. Meanwhile, 23.3 percent of Baltimore residents, and 34.4 percent of the city’s families, live in poverty. For a family of four, this means just over $24,000 in annual earnings for the household, according to federal guidelines.  

These kinds of figures not only keep poor families priced out of the housing market, they are increasingly kicking middle-class families out as well—a problem that only recently began escalating. Writes Garboden:

In 1998, families earning more than $40,000 per year could generally and housing they could afford in the city. This is no longer the case. Nearly 30 percent of renter families earning between $40,000 and $75,000 in income are burdened by their housing costs. The biggest jump appears to have been in just the last six years, when the number of cost- burdened middle-income renter households shot from 1,800 to more than 7,500.

More than 56 percent of Baltimore residents are overburdened with rent, meaning that they pay more than 30 percent of their income toward housing costs. A solid one-third of Baltimore workers spend half of their take-home pay on rent. There are only four other cities that have higher percentages of rent-burdened residents: Detroit, Los Angeles, Philadelphia, and Memphis.

(Abell Foundation)

The outcome of this is that Baltimore has become a city of, as Garboden puts it delicately, “frequent unplanned relocations”—which is simply a nice way of saying evictions. And it’s no joke: According to the report, landlords filed for evictions 156,376 times, evicting 7,235 families along the way, and “almost always because they were struggling to pay rent.”

In terms of how Baltimore got to this point, Garboden says it’s complicated, but no different than how many other cities arrived at this rent-is-too-damn-high point. A huge contributor to the dual crisis, says Garboden, was the massive property-grab experienced in Baltimore from 2002 to 2007, during the housing bubble. According to this theory, a bunch of investors bought houses that were badly in need of rehabilitation during that period, with the intention of renovating them for re-sale on the market. However, “When the market collapsed, many investors were left holding properties,” writes Garboden, “which they put on the rental market, driving up rents at a number of price points.”

The irony here is that, under Project C.O.R.E., the city will again look to investors to develop a lot of the land left behind from the demolition of thousands of vacant buildings, and to rehab other properties left standing. The state is kicking in $600 million in funding to help attract investors for this purpose. Done without caution, this could lead to even more homes that low-income and working-class households are priced out of.

(Abell Foundation)

To build in affordability, Garboden writes, Baltimore will need considerable help from the federal government in terms of providing tax credits and mortgage subsidies on the supply side, and more assistance from housing vouchers for the demand. Vouchers haven’t been a cure-all (though Baltimore seems to be doing a decent job with the voucher program). Some studies have found that vouchers have perpetuated racial and economic segregation. In some places, landlords have hiked rents to account for the increased purchasing power that comes with the housing coupons, or flatly reject them to begin with.

“I think the good outweighs the bad because of the desperate need for housing in Baltimore,” Garboden tells CityLab. “If you can’t afford rent, that’s how housing instability occurs. And the shortage of housing subsidies is having profound consequences on families. Yes, there are inflationary concerns, but covering the tens of thousands of families that desperately need housing right now, I think that should be the priority.”

*CORRECTION: This post has been updated to include the median household income and per capita income in Baltimore.

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