Delaware Public Media

Annual study on housing prices in First State shows widening gaps in affordability

Jul 4, 2016

The Delaware Housing Coalition has been putting out an annual study on affordable housing in the First State for over 20 years.

 

Delaware Public Media’s Megan Pauly talks with the organization’s Executive Director Patricia Kelleher about the increasing need for affordable housing in the First State.

The Delaware Housing Coalition released its annual study on affordability in the First State last week. It discussed major gaps in housing availability, with a deficit of over 16,820 units for very low-income individuals living in Delaware.

It also showed that 2.6 fulltime minimum wage jobs would be necessary to afford a modest two-bedroom apartment in Delaware.

 

The study takes into account the 30 percent rule of thumb – a widely accepted calculation used to measure housing affordability.

 

Delaware Housing Coalition Executive Director Patricia Kelleher says that if 30 percent or less of one’s income is going to housing, the person should be able to afford other needs and save for emergencies.

 

“So if they could pay at that 30% mark, or again – less, it would allow them to stabilize their lives and their families and begin that path towards building some assets and some wealth.”

 

However, a quarter of renter households in the First State are spending over 50 percent of their income on housing.

 

The study also calculates living housing wages in each county for a two-bedroom unit: $23.27 in New Castle, $19.46 in Sussex and $18.31 in Kent.

 

From 2007 to 2015, the bottom 10% of wage earners saw a 0.2% increase in real hourly wages, while the top 5% saw an 8.7% increase - a trend of growing income equality that’s reflected in the housing market.

 

One possible solution identified: the National Housing Trust Fund, a new initiative bringing $3 million to each state to help create more housing units specifically for those low-income individuals.

 

Kelleher says the fund is the first of its kind in many decades. And she hopes more funding will be allocated to it in the future, but adds it’s not a silver bullet.

 

“Unfortunately there’s nothing that’s going to be easily accomplished," Kelleher said. "It will demand the government, the non-profit sector, developers coming together and looking at the needs and creating some interesting and innovative financial products to do it.”

 

Kelleher adds the National Low Income Housing Coalition is advocating a change to the mortgage interest deduction, to create more funding – up to $11 million for each state – allocated to the National Housing Trust Fund.

 

She says more incentives for developers to incorporate affordable units into their new developments are also needed.