Caught in housing squeeze

Census finds Marylanders stretched thin amid rising costs

October 03, 2006|By Kelly Brewington | Kelly Brewington,sun reporter

Even in one of the nation's most affluent states, rising housing costs are stretching many Maryland households thin as they spend an increasing proportion of their income on rent or mortgages, according to figures released today from the U.S. Census Bureau.

In 2000, roughly a third of Maryland renters paid 30 percent or more of their income on rent and utilities. Last year, 45.3 percent of all the state's renters spent at least 30 percent of their income on housing, according to the Census' 2005 American Community Survey.

Meanwhile, Maryland homeowners paid top dollar for housing in 2005, ranking 10th in the nation in median monthly mortgage costs. The median monthly mortgage cost for Marylanders was $1,561, while the national figure was $1,295.

The Census Bureau cautions against some comparisons between the 2005 American Community Survey and the 2000 figures, because the earlier data did not include condominiums. In addition, unlike the once-a-decade census, the American Community Survey was based on estimates and includes a margin of error.

Economists and housing experts consider housing to be affordable if it costs less than 30 percent of a household's income. They say while the upper echelon of Marylanders might not be feeling the pinch, moderate- and low-income households have been struggling to juggle their rent and mortgages with the rising prices of gas and utilities.

For example, in wealthy Montgomery County, where the median household income is $82,187, housing is pricey, but many of its residents can afford it, said Danilo Pelletiere, research director of the National Housing Coalition in Washington.

"But if you are a minimum-wage earner, even though you're working hard, with the cost of housing, it's very difficult to make ends meet," he said.

The problem is acute in poorer jurisdictions such as Baltimore, where the median household income of $32,456 is among Maryland's lowest.

Even though the city boasted one of the lowest median monthly housing costs for renters - $667 - it had the highest percentage of renters in the state - 51.6 percent - who spend at least 30 percent of their income on housing.

Median monthly mortgage costs for city homeowners, meanwhile, grew by 8 percent, from $997 to $1,080 between 2000 and 2005, the largest percent increase in the region.

Sonja Merchant-Jones' mortgage costs are a steal by most comparisons - $450 a month for a modest Waverly rowhouse. But with an income consisting of $850 a month in Social Security disability payments and fees from occasional catering jobs, she's not left with much money for expenses, she said.

"My BGE is $200 alone since the increase this summer," said Merchant-Jones, who is chairwoman of the city's chapter of ACORN, which advocates on behalf of low-income residents. "But other people have it much worse."

Merchant-Jones said in response to a growing number of requests for housing assistance, ACORN started a new service last month to connect people with information on where to find help paying for housing and utilities.

Richard P. Doran, executive director of the Community Assistance Network Inc., which helps Baltimore County residents with rental and utility assistance, blames part of the problem on the nationwide push for homeownership in recent years.

"It became increasingly easy to get a mortgage; you almost didn't need any money of your own at all," he said. "But I think people didn't think ahead enough to plan for a backup. If your hot-water heater blew up, you were stretched to the max."

Doran said his agency has seen more moderate-income people request help with their mortgages, rents and even evictions. Of the 100 new households the agency's shelter housed in May, 85 percent of them had recently been evicted, Doran said.

"I don't want to sound like an alarmist, but we have reached our maximum capacity in the emergency assistance that we do," he said.

The rising cost of housing affects even affluent jurisdictions such as Howard County, where the median household income of $91,184 is among the nation's highest. Last year, the county had one of the highest median monthly housing costs in the state of $1,952, a 7.5 percent increase from 2000.

Nevertheless, earlier this year the county executive named a task force on affordable housing, bringing together city officials, developers and community advocates. The recommendations are expected next month.

"The cost of housing has really stretched affordability across the spectrum," said Kevin J. Kelehan, the task force chairman and former chairman of the county's housing commission.

Anirban Basu, an economist and chief executive officer of Sage Policy Group Inc. in Baltimore, said the issue of affordable rental housing could be a thorny problem in wealthy communities.

"Many communities have become quite reluctant to allow apartments to be built in their midst," he said. "You might think what is being proposed is a nuclear reactor. This is how stiff the opposition has become in some of these jurisdictions."

Developers find it easier, and more profitable, to build high-end homes, he said. As a result, there's a bigger demand for affordable housing than supply, and rents, Basu predicts, will only increase.

For new arrivals to the state, the lack of affordable housing can come as a surprise, he said. Maryland didn't used to be so expensive.

"It's really quite remarkable because just a few years ago, Maryland's cost of living wasn't that much higher than the balance of the nation," he said. "Now Maryland is considerably more expensive than the balance of the nation, and much of that has to do with housing."

kelly.brewington@baltsun.com

Costs of living

Top 10 median monthly mortgage costs in the U.S.

1. New Jersey: $1,938

2. California: $1,912

3. Massachusetts: $1,781

4. Hawaii: $1,763

5. Connecticut: $1,718

6. District of Columbia: $1,662

7. New York: $1,652

8. Rhode Island: $1,585

9. New Hampshire: $1,566

10. Maryland: $1,561

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