Local Housing Costs and Residential Instability

Housing is related to homelessness both as a cause and as a solution. A shortage of affordable housing contributes to the flow of people into homelessness. The gap between the number of affordable housing units and the number of people needing them is currently the largest on record, estimated at 4.5 million units (Pelletiere, 2006).  

The homeless are in a perpetual state of economic despair. Unfortunately, for the poor, securing housing is difficult regardless of the state of the economy. When the economy is good, individuals that are working are able to pay higher rents than the poor are able. When the economy worsens, apartment buildings are lost to foreclosure and properties fall into disrepair – decreasing the number of available units.

Fair market rent for a one-bedroom unit in Wheeling is $435 monthly ($5,220 yearly). Affordable housing is considered to be housing with associated costs (utilities) that does not exceed 30% of gross income. Since a typical Social Security Income stipend that a homeless person in Wheeling might receive is about $637 per month or $7,644 annually, the local fair market rent ends up being 68% of the individual’s income.

Under the premise of an employed person, the average income to afford an apartment at fair market rent would be $17,500 year. But a person working forty hours per week at the minimum wage of $7.25 only has an annual gross income of $15,000. So even a fully employed individual working at minimum wage cannot afford a fair market rent apartment in the area.

The test only provides more dismal results when you look at the single parent who has an income of $15,000 and is in need of a two-bedroom unit. The fair market rent increases to $555 per month, creating a situation where the parent is paying an even higher percentage of their income for housing, leaving little left over to cover life’s other necessities.