Incomes above "poverty line" are no guarantee to decent housing
According to the U.S. government, "poor" means that your income falls below the "poverty line" that was defined back in the mid-1960s. At the time of its inception, the poverty baseline measure was set at approximately three times the annual cost of a nutritionally adequate diet. It was assumed that this amount would enable a family to meet basic needs. It may have then; it certainly doesn't now. What is "poor?"
According to the U.S. government, "poor" means that your income falls below the "poverty line" that was defined back in the mid-1960s. At the time of its inception, the poverty baseline measure was set at approximately three times the annual cost of a nutritionally adequate diet. It was assumed that this amount would enable a family to meet basic needs. It may have then; it certainly doesn't now.
The 2007 poverty line for a family of four as defined by the Department of Health and Human Services is $20,650. Would this annual income realistically cover a family's basic needs? In the Twin Cities, it clearly would not.
Just to afford "fair market rent" on a small one bedroom apartment in the Twin Cities, a wage earner must make $13.56 per hour, or $28,205. For a two-bedroom apartment, the income needed to afford the rent jumps to $34,195. For families that dream of homeownership, the outlook is much starker. In 2006, the median home cost in the Twin Cities was $242,000. The annual income needed to afford that home is $82,901 - four times the poverty rate for a family of four.
The gap between the "poverty line," an amount that by definition ought to meet a family's basic needs, and the cost of living in the Twin Cities, is astounding. Because housing is one of the largest monthly costs a family must incur, low-income families often have no choice but to live in substandard housing. Quite simply, it's all they can afford.
Access to safe, decent, affordable housing impacts the long-term success of a family and has implications that reach into all areas of life, including employment, education and a healthy living environment. As the Minneapolis Foundation has stressed in their Minnesota Meeting series, "A home is more than shelter. It is a critical determinant of opportunity in our society." Homeownership provides opportunities that can positively impact families for generations.
With rising home values and rising interest rates, homeownership among low income wage earners and among an increasingly larger percentage of Black families, has dropped dramatically. As the real estate tides lifted, a significant segment in the population was left behind in the wake, and the number of families living in poverty increased. Affordable housing options are rapidly diminishing for a broad range of Twin City residents that earn less than fifty percent of the median income.
Quite frankly, the growing racial and economic disparity between low-income families and the rest of our community is unconscionable when we have the resources as a community to do something about it. However, creating viable solutions for the development of affordable housing must be a community-wide effort; one nonprofit agency cannot address the need alone. Luckily, there are numerous community development agencies, including Twin Cities Habitat for Humanity, with the housing expertise necessary to turn vision into reality.
For hard-working, low-income families that might not otherwise recognize the dream of homeownership, Twin Cities Habitat for Humanity is often their only chance at owning a home. We fill a niche in the affordable housing market, and we do it well. We build market rate homes that are kept affordable through the zero percent interest mortgages that we issue to homebuyers. Families also go through extensive homeowner training classes, and our organization offers an ongoing mortgage foreclosure prevention program. In our twenty-two year history, less than two percent of our homeowners have experienced foreclosure. This has remained steady despite skyrocketing foreclosure rates in the sub-prime market.
We couldn't have achieved these results without significant community support. Twin Cities Habitat's building model is effec