Alabama Mortgage Loans, Affordable Housing Out of Reach For Many, Report Says

In Alabama, the average renter will have to earn $10.55 an hour to keep rent and utility payments from exceeding 30 percent of his income before taxes, according to the Mobile Register.

According to the report, renters in Mobile County will have to earn a housing wage of $11.35 per hour to afford rent and utilities on a two-bedroom unit. In Baldwin County, one would have to earn $12.38 per hour.

The housing coalition defines the housing wage as the hourly pay rate needed to afford a two-bedroom unit at the fair market price plus utilities with both costs not exceeding 30 percent of a worker’s monthly income.

The results of the study show that workers earning minimum wage have a difficult time finding affordable housing. Even a proposed increase in the minimum wage to $7.25 per hour, officials say, won’t solve the problem.

“This gap will still exist,” said Sheila Crowley, president of the Washington, D.C.-based National Low Income Housing Coalition.

U.S. Rep. Barney Frank, D-Mass., also participated in the teleconference. Frank is the incoming chairman of the House Financial Services Committee, which deals with housing policy.

Frank said during a teleconference that “the federal government should be assisting in building and preserving affordable housing.”

“Every year it becomes more difficult for low-income families to find decent homes they can afford,” Crowley said. “As we approach the holiday season with its intense focus on consumer spending, ‘Out of Reach,’ shows the difficulty that millions of low-income families face to even pay for their homes.”

In Alabaman the average fair market value of a two-bedroom apartment is a rent payment of $549. To afford this amount of rent and utilities and not exceed 30 percent of the household’s monthly income, a resident must earn $1,829 monthly, or $21,946 annually.

Assuming a 40-hour work week, 52 weeks per year, this translates into a housing wage of $10.55 per hour, according to the study. There’s little chance of qualifying for an Alabama mortgage without significantly more money than that coming in.

In the Yellowhammer State, the estimated average wage is $9.45 an hour, according to the report. In order to afford the market rent for a two-bedroom, the worker would have to put in 45 hours per week, 52 weeks a year.

“That assumes no vacations, no sick leave and no transfers, no nothing,” said Danilo Pelletiere, the housing coalition’s research director.

In the Mobile metropolitan statistical area — which the coalition defines as Mobile County — a renter would have to earn a housing wage of $11.35 per hour. The fair market rent for a two-bedroom unit is $590 a month, meaning an annual income of at least $23,600 would be needed.

The coalition lists Mobile County’s area median income at $49,500. Crowley said that some government assistance comes from Section 8 vouchers, but thousands more are needed.

Charles Pharr, director of the Prichard Housing Authority, agreed. For the last two years, as the housing market boomed, then cooled, the authority has “closed” Section 8 lists, meaning that no new names are being added and no additional vouchers are offered.

“We expect to open the list in the next six months,” Pharr said.

The Section 8 program provides financial assistance to those renting from private property owners.

Housing coalition officials said they want Congress to create a national housing trust fund that will help communities develop more affordable housing. The proposal has been on the table for a number of years, Crowley said, but federal officials have not determined a funding source.

“Unstable housing (situations) have impacts all over the place,” Crowley said. “There has to be a more holistic approach to understand all the wage, marketing and policy impacts that ultimately impact family life, but that’s not the way the government is structured.”

Officials say they do the best we can to work in the system in place. But, clearly, housing is basic. It’s a problem if you don’t have stable, safe, decent places in a neighborhood you feel comfortable in. All of the other things we expect to have for success, all of those things are harder if you don’t have enough money to pay rent, much less a home mortgage.