The Impossible Dream: Affordable Rentals for Cash-Strapped Residents

Colleen O'Dea | May 26, 2016 | Housing
Punching the clock at minimum wage means some New Jerseyans would have to work 18 hours a day to rent a two-bedroom home in the Garden State

New Jersey remains one of the most expensive states to rent a home in the nation, yet is not doing enough to help those with low and moderate incomes afford a decent place to live, advocates said on Wednesday in releasing a new report on housing costs.

The 2016 Out of Reach report released by the National Low Income Housing Coalition and the Housing and Community Development Network of New Jersey ranked the state the fifth least-affordable for housing in the nation. Hawaii was the most expensive.

To reasonably afford a two-bedroom rental in New Jersey — at an average cost of $1,379 a month — a household needs an hourly wage of at least $26.52, or $55,152 a year. That’s almost $10 more than the average hourly wage of $16.98 and more than triple New Jersey’s $8.38 minimum wage. Someone earning only the minimum wage would have to work 127 hours a week in order to afford the typical two-bedroom home without having to spend more than 30 percent of his income on housing, a widely accepted measure of affordability. That works out to working 18 hours a day, or 3.2 full-time jobs.

“New Jersey continues to rank at the very top of the places people can least afford to call home,” said Staci Berger, HCDNNJ president.

That required $26.52 hourly housing wage is 5 percent higher than just a year earlier, an indication that the cost of housing in the state has risen by that much.

Only in Morris County can a household earning the median income for that county afford a fair-market two-bedroom rental without spending more than 30 percent of income on housing. The least affordable county is Passaic, where the average fair-market rent is $1,440 a month, and paying that would cost the typical renter household just over half of the median yearly income of $33,695. That’s significantly higher than the 30 percent threshold and leaves individuals and families struggling to pay for food, clothing, transportation, and other costs.

“Many people in our state are ill-housed, doubled up or living in inadequate housing,” said Arnold Cohen, the network’s senior policy coordinator.

Among the ranks of the workers not earning enough to reasonably afford housing, according to the network, are social-service workers, emergency dispatchers, childcare workers, home health aides, and school-bus drivers.

Ironically, the counties with some of the lowest housing costs — Cape May, Sussex, and Gloucester — are also among New Jersey’s least affordable because workers there make so little, Cohen said. The data shows that the average renter in those three counties earns less than $10 an hour.

Berger said one main problem is that the state does not have an adequate supply of affordable housing adding that both federal and state governments need to provide more money to help increase the number of units affordable to workers of modest means. The problem continues to grow, since the number of renters has been increasing each year.

One reason for the dearth in New Jersey is the lack of a functioning state system to see that municipalities provide units for low- and moderate-income households as required by the state’s Fair Housing Act. After briefly coming back to life and failing to enact new housing quotas, the Council on Affordable Housing is essentially dead and the courts are now in charge of determining how many affordable units towns need to provide.

Kevin Walsh, associate director of the Fair Share Housing Center, which is involved in dozens of court cases across the state, said that a few municipalities have settled cases and agreed to provide affordable housing, while others work their way through the superior and, in at least one instance, appeals courts.

But more must be done, Walsh said.

“There is absolutely a tremendous need for more funding,” he said. “There is a huge need for housing for low-income folks … Especially for the disabled, and for veterans returning home from war. There are all sorts of needs. It’s really sad we do not have a better way to make sure homes are more available.”

New Jersey is finally getting some help this year from the National Housing Trust Fund, which was created in 2008 but giving its first payment of $3 million to nonprofit organizations in the state to build housing for extremely low-income renters.

Berger said Congress needs to fully funding the federal Housing Choice Voucher Program, which helps low-income households afford decent homes by giving direct rent subsidy payments to landlords. She said advocates also support a bill (S1852/A3551) sponsored by Sen. Raymond Lesniak, D-Union, that would provide up to $600 million in tax credits to builders for developments in which at least half the units are set aside for low- and moderate-income, including at least 13 percent of those with very low incomes.

Lesniak said the lack of affordable housing is a multifaceted issue.

“It’s a problem in terms of employers locating here and staying here,” he said. “It’s a problem for the homeless and low-income families who are using a major portion of their earnings for housing. It’s not good for their quality of life or society in general.”

Newark Mayor Ras Baraka said the waiting list for public housing in Newark is roughly 2,000 names long. Berger said that, in a few places, the waiting list is so long that people can not even get on it.

“When a waiting list is closed, that basically sends a whole other message to people: We do not want you to live here,” Berger said.

State government needs to do more to help those in need, added Berger.

She applauded the state for its recent announcement that it would be providing 500 additional housing vouchers to the chronically homeless but said it’s “not enough.” And at the same time, she criticized Gov. Chris Christie for vetoing earlier this month a bill that would have made permanent recently expired programs that provided emergency housing assistance to the needy and disabled and a proposed $36 million budget cut in shelter assistance funds, which she said will impact “the most vulnerable residents of New Jersey.”

Democratic lawmakers are trying to attack the problem in another way, by passing a measure to increase the minimum wage to $15 by 2021. Business lobbyists oppose the measure, and it is unclear whether the measure would have Christie’s support, given that he has expressed concerns and vetoed an increase in 2013. But as in that year, legislators are planning to take a minimum-wage increase to voters if necessary.