“I was spending 45% of my take home pay on rent,” recalls Jennifer Hall. She worked for the Minnesota Legislature and moved three times in three years, looking for affordable apartments in safe neighborhoods. Jenn rented in privately owned homes and relied on a large network of friends to tip her off to reasonable rents. “If you want to find something affordable, you have to live in a creepy basement.”
Recent media reports have focused on the difficulty in finding apartments in the Twin Cities, but few have focused on the question of affordability. The Minnesota Housing Partnership, recently released the 2011 County Profiles. The report draws a dismal picture for middle and lower income renters across the entire state, and especially in the Twin Cities. MHP’s June 13 quarterly “2×4 Report” focused on rental, finding that, “vacancies in the Twin Cities rental market plunged to 3.1%, the lowest in a decade, while average rents climbed to $916.”
Leigh Rosenberg, from MHP, refers to the rental market as the “second tier” in housing, because so much focus is on ownership. She notes that in the past five to seven years, the shift from home ownership to rentals has been “huge” and the demand is one factor driving up rents. Housing is considered affordable if it is less than 30% of a renter’s income. Due to demand, stagnant wages and unemployment, and lack of investment in rental housing for over 30 years, rent continues to devour an ever increasing percentage of household income. Food preparation workers and retail salespeople are few occupations hit hardest.
Kathryn Fenwick, an Assistant Manager at a popular retail store, has worked in retail for eleven years. “I do make good money,” she says. Always networking to find a place she can afford, she has found little variation in the quality of affordable rentals. She remembers living on her own in St. Paul. There were repeated drug deals around her and her car was hit while parked on the street. The house was old and inefficient, and her heating bill was astronomical. Last May, Katie found a roommate and a better location. While she would like to own a home, it’s not in the cards for her right now.
Southern Minnesota Regional Legal Services (SMRLS) Attorney, Martha Eaves, has worked with renters for about 30 years. She has seen how policies and lack of investment in affordable housing have come to a head in 2011. Eaves notes that, since the Reagan era, there has been little or no investment in the affordable rental market. This standstill of rental development, increasing cuts to public assistance programs, and the current troubled economy pushes more families closer to the edge. One event such as the loss of a job, reduced hours at work, a medical issue, even car repairs, drive low or middle income renters out of apartments they can barely afford. In the past, Eaves’s clients included “chronic bad renters.” Now, many more clients are people who have lost their job, not been able to replace it, are displaced and unable to find affordable rentals. The result is a downward slide toward homelessness. Many of those people are families with young children. Affordable rental housing built in recent years has been primarily senior housing. “No one wants to build for families,” says Eaves.
Matt Eichenlaub, an attorney at Homeline, sees another side to problems in the rental market — the ripple effect caused by foreclosure. When he first began at Homeline, less than one percent of call volume touched on foreclosure. Within the past three years, that figure peaked at 11 percent and is now at eight percent.
“I see what I refer to as ‘accidental landlords,’” says Eichenlaub. A house may have belonged to elderly parents, cannot be sold in the current market so is rented out to a family. The landlord experiences economic problems and has to choose between his own home or the rental, which slides into foreclosure. The result is an empty house, owned by the bank, and another family losing out on affordable housing. Eichenlaub also has encountered renters who moved into rental they did not know was in foreclosure. Logic dictates that, each time a renter leaves a home that will not be rented out, more stress contributes to more demand and higher rents.
Adding insult to injury are those who lose a home to foreclosure and have to find affordable rentals. Pamela McLean bought her home in 1999 and has since become disabled. Government programs designed to help her avoid disclosure were so bureaucratic, the bank foreclosed before she learned she finally qualified. On a fixed income, with three cats, twelve years’ of possessions, and with a foreclosure on her credit report, McLean has few options.
“I went from having my own home to feeling destitute,” she says. She asked to pay a little extra toward her delinquent mortgage payments, and estimates she could have been caught up in two years, but Wells Fargo refused. Now she is another person sifting through the rental market, looking for something she can afford in a neighborhood where she doesn’t feel leery waiting for the bus. Until she finds an apartment she can afford, her brother will let her stay with him. She understands that the use of his couch is only temporary, and McLean feels that one can’t, or shouldn’t, rely on relatives indefinitely. The experience has been shocking, depressing, hopeless. “What now? What now?” asks McLean of her limited renting options, “I have no idea.”