For many renters, owning home not possible
Harris County housing has become more affordable for existing homeowners over the last decade, but as home prices have risen more steeply than incomes it is more difficult than ever for renters to transition to home ownership.
Those are some of the findings of a study released Tuesday by Kinder Institute for Urban Research at Rice University, which examined housing cost burdens as part of a report on the region’s housing.
With roughly a quarter of Houston renters spending half their income or more on housing, the lack of affordable options has become a weight on a growing number of family’s finances, impacting the amount they’re able to spend on other necessities such as health care and food.
“The reputation of Harris County and Houston is that they’re an affordable place to most residents,” said Kyle Shelton, the institute’s deputy director. “That reputation is at odds with rising housing prices and a lot of the trends that we’re seeing in the most recent data.”
The median price of a home in Harris County has risen much faster than the median income of a renter. Between 2011 and 2018, the median price of a home rose 58 percent to $220,000 from $139,000, while the median household income for a renter rose just 21 percent to $40,000 from $33,000.
And while the financial situation of homeowners improved during that time — only 21 percent of homeowners in 2018 were considered cost-burdened, meaning they spent more than 30 percent of their income on housing, compared to 29 percent in 2010 — the same could not be said for renters, whose share of cost-burdened households remained around 47 percent.
Shelton noted that nearly a quarter of renters spent more than 50 percent of their income on rent, “leaving them with very few resources to make up any other costs, from health care to education or food.”
That was before the novel coronavirus pandemic and oil bust led to job losses on a massive scale.
“All together, we’ve seen over 350,000 unemployment insurance claims in Harris County since March 20,” Shelton said. “And so we know hundreds of thousands of homes are seeing huge drops of income, which are complicating all sorts of things, including, especially, housing costs and being able to afford housing.”
Lacy Wolf, president of the Texas Gulf Coast Area Labor Federa
tion, said that COVID has made already vulnerable members of the community even more vulnerable.
“When we surveyed our 95 affiliated unions at the beginning of the COVID-19 crisis in March, 41 percent listed paying rent as the top concern of their members, and this has only grown in the subsequent months,” she said in an emailed statement. “We continue to call on our leaders in Harris County and Houston to address this ongoing crisis by suspending evictions in Justice of the Peace courts and passing municipal ordinances that give renters grace periods to pay back rent.”
Shelton said the financial pain being felt by renters has the potential to spread to landlords and lenders as stimulus support comes to an end. He pointed to the Terner Center for Housing Innovation at the University of California-Berkeley, which he said estimates newly unemployed households in the Houston area are responsible for $420 million in rent each month.
And the pandemic and oil bust are only the latest in a series of disasters that have been felt by the Houston area.
“A significant number of low-income families still are in need of repair from Hurricane Harvey,” said Allison Hay, executive director of Houston Habitat for Humanity. “So to ask them to stay at home during a pandemic in a home that has not been completely repaired and has health issues with mold — we see an increased risk of health issues for these families coming.”
Shelton agreed. “Multiple disasters are catching up to us in Houston,” he said.
While the report noted that homeownership rates in Houston are falling across races, they have dropped most precipitously since 2010 for black families in part due to patterns of climate change-related catastrophes.
“A lot of the communities where black home ownership rates are falling most are also areas that have been hit by major flooding in the last five years,” Shelton said.
Housing experts said that for Houston to fix its housing affordability problem, it will have to focus on increasing its supply of affordable housing stock.
“Obviously supply isn’t keeping up with demand,” said Mary Cunningham, vice president of communities policy at the Urban Institute, a Washington think tank. She recommended the city and county set production targets for new housing that’s affordable for various income bands.
Chris Herbert, managing director of the Joint Center for Housing
Studies at Harvard University, also called for increasing the supply of affordable housing.
“That means, by necessity, we’re going to have to have more subsidies for the poorest households who are just out of reach from the private sector,” he said. “It means we have to think about ways to expand the ability of the private sector to reach those people who are in the middle of the income distribution” — for example, looking at regulatory barriers that make it difficult for tiny homes to be built in Houston.
And while housing advocates look for ways to increase the supply of housing affordable to low and moderate incomes, they should also be taking actions to preserve housing that is currently affordable.
“I think we often look in terms of production,” Cunningham said. “I think we also need to think about a preservation strategy. We don’t want the affordable housing we have now to disappear.”