The Plight of Renters in Valparaiso

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Previous Housing for All blogs have reported primarily on the difficulties in developing and obtaining affordable housing for homeowners.  While this is important what also needs to be addressed are the housing issues confronting those persons who rent, which in cities like Valparaiso can be much more challenging than those faced by homeowners. In Valparaiso, census data indicates that 46.7% of the households in the city are renters which amounts to 6,522 households.

To begin with, according to the most recent census,  renters have much lower household incomes  ($35,4234) than the general population ($56,027) and particularly the homeowner cohort ($84,639).  With less income, housing options become fewer and affordability becomes an increasing problem.  If we use the 30% of income as the definition of affordability for housing, 47% of renters in Valparaiso are currently living in unaffordable housing and that figure has been fairly consistent for the past decade.  Not surprisingly, the percentage of renters living in unaffordable housing increases as income declines.  For example, 92.8% of households (1399) with an income less than $20,000 and 83.2% of households (1149) with an income $20,000-34,999 pay more than 30% of their income for rent.  

Looking at the problem for renters from a little different angle, and dealing with the issue in previous blogs about the problem of coming up with down payments to purchase a home, take the case of the household with the median income for all renters in Valparaiso.  The median renter household earns $35,424 and the housing burdened level (30% of their income for housing) is $866 a month. The median rent in Valparaiso is $937 without utilities.  If you add just a very conservative cost of utilities of $60 to that, the median cost of renting is $997 per month. Obviously, the median renter cannot afford the median rental unit. In fact, they fall $111 short every month or $1,322 per year.  Under these conditions it is not only difficult to meet other needs, but shows why it is difficult for persons in this situation to save money for a down payment on a house.  This gap between median income and median rent has been relatively consistent for the past decade.

It’s easy to get caught up in the numbers and ignore that the persons we are talking about are our neighbors and members of this community and often the persons who serve us, wait on us, and even take care of our children.  According to Bureau of Labor Statistics, these persons like Cooks, Food Preparation Workers, Bartenders, Fast Food workers, Waiters and Waitresses, Dishwashers, Hosts and Hostesses, and Hotel, Motel, and Resort Desk Clerks, to name just a few, average around $22,500 per year in our community and less (around $10.80 per hour) and could not afford the median rent of a one bedroom or an efficiency apartment in Valparaiso.  In fact, they would need rental costs (without including utilities) of around $500 per month.  Think about this with reference to the transformative buildings being developed in downtown Valparaiso where the least expensive housing – a studio apartment – will rent for around $1,000 a month.

Finally, in the City of Valparaiso’s own housing study — Residential Market Analysis of the City of Valparaiso, Indiana – in one of the most highlighted suggestions in the report it asserts in bold letters “…we estimate that the need for…renter households earning less than 50% AMI [Area Median Income] is approximately 830 units.”  These are rental units for very low income persons ranging (without utilities included) from $553 – $844 per month.  Contrary to the position of the City of Valparaiso, the East Town “work force housing” apartments fall substantially short of meeting that need. To meet this need, as well as others, will take a good deal of effort by the City and other parties interested in affordable housing in this community.

What can be done about this will be the subject of future blogs.  

Larry Baas

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