Reports Paint Different Pictures Of Affordable Housing

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Two different reports out this week paint two very different pictures of affordable housing. One says housing is more affordable for families than it’s been for 25 years. 

The other says housing is unaffordable for many Vermonters. 

The reports came out on the same day. 

The first, from the Vermont Economy Newsletter says for a median income family, the percentage of their salary spent on monthly home mortgage payments in 2012 reached an historic low of 11.7 percent. 

That’s nearly half the bite a mortgage took out of a family’s income about 25 years ago. 

The second report, from the Vermont Affordable Housing Coalition says many Vermonters aren’t earning enough money to pay rent.  

The reports may seem to contradict one another, but they look at different groups of people.

"Ours is looking at your average homeowner, or potential homeowner," Economist Art Woolf of the Vermont Economy Newsletter explains.  His analysis used income data for married couples filing joint returns.

According to Woolf, buying a house is more affordable than ever for median income families largely due to very low interest rates.  He says the only caveat is that it’s much harder to get a home loan.

"Back in 2004, 2005 someone’s dog or cat could get a mortgage. Now banks are being much more selective," he says.

It’s a different picture for moderate and low income Vermonters according to the second report which is part of a national study

Erhard Mahnke is with the Vermont Affordable Housing Coalition.

Mahnke says the study shows, "There’s a large gap between what low and moderate income Vermonters, folks who are working at lower wage service sector jobs or living on a fixed incomes, what they can afford and what’s on the market."

The coalition’s report says statewide someone working fulltime would need to make more than $18 and hour in order to spend less than 30 percent of their income on rent. While public assistance is available to help with housing costs, Mahnke says paying rent is a significant hardship for many. 

Leslie Black-Plumeau is with the Vermont Housing Finance Agency.  The agency helps finance mortgages for low- and moderate income Vermonters.

Black-Plumeau says the two contrasting reports point up a widening income gap.  

"We do have a significant disparity among the population in terms of income,"she says " If you happen to be lucky enough to be a married, filing jointly family with 20 percent to put down, this is definitely a good time to buy.  But for the rest of us the prevailing rents are very, very high and incomes for a lot of the population have not kept pace at all."

Both reports cover a significant part of the state’s population. Two-thirds of all Vermonters live in married couple households covered by the mortgage home affordability analysis. 

The housing coalition study says 29 percent of Vermont households are renters. 

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