Each year, the Joint Center for Housing Studies at Harvard University provides an overview of housing market conditions throughout the United States. As part of its 30th annual publication, the Center examined long-term trends in the housing market. These trends provide context in order to identify what has changed, what has not, and insights into why that is the case.
The Center identified some trends that quantified what community members have been saying for years: in communities across the country, housing prices continue to outpace wages and income. One of the most striking points from the study is that between 1960 and 2016 the national median rent payment rose 60% while the median renter income grew only 5%. When rent payments increase 12 times faster than renter income, the result is a growing income divide and an increased level of housing insecurity for a large portion of the population. The systems and policies that produce these outcomes are in desperate need of an update if we are to stand firm in our commitment to fairness.
These dramatic increases in housing costs are very real here in Vermont. According to the Public Assets Institute, the median wage in Vermont increased by 1.4% between 2006 and 2016 while housing costs rose by 9.7% over the same period of time. Data from VHFA’s HousingData.org demonstrate a similar trend: in 1980 Vermont’s median gross rent was $226 while in 2017 it was $945 – a 318% increase in just under 40 years.
In another measure of the mismatch between housing costs and wages, the National Low Income Housing Coalition found that the “housing wage” in Vermont – the hourly wage needed to rent a two-bedroom apartment – is $22.40. That’s $11.90 above the $10.40 minimum wage. That hints to an important point as we contextualize the housing wage in broader statewide trends of affordability: while Vermont has a similar cost of living to other states in New England, its wages are the second lowest of the region. In fact, Vermont was one of only 10 states where the median household income declined in 2017.
These structural shortcomings have a significant impact on societal health.. A recent VPR-Vermont PBS poll found that 30% of Vermonters view housing costs as their primary source of financial distress. This points to a need for a swift course-correction at the state and local level.
While these facts and figures paint a gloomy portrait of Vermont’s economic security, there’s so much work VAHC and its members have done and plan on doing to remedy the situation. In the last three years alone the Vermont Legislature passed a historic $37.5 million housing revenue bond that will create between 550-650 Vermont homes. The Building Homes Together campaign, in which several VAHC members participate, has committed to building 3,500 new units in the Chittenden County region. And finally, the 2019 State Legislature is interested in exploring solutions to make our communities work for its residents once again.
It’s important to remember that a complex problem such as housing affordability requires multi-faceted, multi-sector solutions. We’re excited to pursue these solutions and more in the legislature and beyond.
“High Rents Are Stunting Job-Market Growth,” Pacific Standard Magazine.
“Out of Reach: Vermont,” National Low Income Housing Coalition.