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Christopher Bjorke, Forum News Service, Published August 13 2013

Study finds high percentage of Clay County renters living in unaffordable housing

Housing is becoming harder for more Minnesotans to afford because of rising costs and falling incomes, increasing the share of people living in homes they cannot afford, according to a new study.

“A slow economic recovery and rising rental costs have made housing increasingly difficult to afford, especially for renters,” according to the Minnesota Housing Partnership, introducing its annual collection of county-level housing data in Minnesota.

Across the state since 2000, rents have risen 6 percent while renter incomes have fallen 17 percent, the organization found.

In Clay County, one-third of renters and 6 percent of homeowners pay half or more of their income for housing, according to the report, which stated that generally 30 percent or less of a household’s income should cover housing costs for it to be considered “affordable.”

Past that threshold, households might have issues with foreclosure or being unable to make rent payments.

An affordable two-bedroom apartment for a household making $22,722 – the median income for the Clay County — would cost $568 per month. But in Clay County, the average rent for a “safe, modest 2-bedroom apartment” is $639 a month, the report shows.

Josh Huffman, program manager for the Village Family Service Center’s Financial Resource Center in Fargo, said despite all of the new development in the area, lower income homebuyers and renters are struggling to find affordable housing. He said it’s especially difficult for the area’s many service industry workers.

“It’s not as easy as it used to be to find a two-bedroom apartment for 500 bucks,” Huffman said.

The Clay County Housing and Redevelopment Authority offers housing programs for people with disabilities, seniors, homeless families, individuals with a “serious mental health condition” and public housing for select families with three or more people.

Income-eligible renters can also apply for rental assistance through the Housing Choice Voucher Program, with households in the program paying 30 percent of their adjusted monthly income toward housing costs. The program, funded by the U.S. Department of Housing and Urban Development, subsidizes the rest of the rent payment.

Huffman said the voucher program has a long waiting list and it can be difficult to find housing that meets program criteria when families are finally accepted.

For many, Huffman said “there’s just not much of a choice” and they’re forced to rent places above that 30 percent benchmark.

Counties in northwest Minnesota have also seen a growing share of residents spending more than 30 percent of their gross incomes on housing, despite a perception that the region has fared better economically than Minnesota or the country as a whole.

“In general, the northwest portion of Minnesota has done better,” said Leigh Rosenberg of the Housing Partnership, based in St. Paul. However, the number of rental homes available has not been enough to meet needs.

“There certainly is a shortage of rental housing available,” she said.

Among nine northwest counties, the share of residents paying more than 30 percent of their household income on rent has increased since 2008, according to the group’s data.

In Polk County, the percentage moved up slightly, from 50.8 percent to 51 percent between 2009 and 2013. Other counties had bigger increases, such as Pennington County, where the share of renters in unaffordable homes went from 28 percent in 2009 to 48 percent in 2013.

Polk and Beltrami counties also were among the state’s counties offering the fewest affordable renting options for “extremely low-income” renters.

Statewide, more people found themselves losing homes and moving into rentals since 2008, Rosenberg said.

“With the financial crisis, we had many people who had previously been owners who were pushed into a rental situation,” she said.

Incomes among renters also have not kept up with rents. Minnesota’s median wage is $16.71 for full-time employment and $9.41 for part-time work, according to Rosenberg.

“At $9.41, that’s certainly not going to pay anyone’s rent,” she said.

With housing eating up a bigger part of people’s incomes, it leaves less money available for other needs. For low-income renters, that means less money for other necessities, such as food.

On the Web: Minnesota Housing Partnership’s data on all counties is available at bit.ly/16GbpGY.

Forum reporter Cali Owings

contributed to this report