Housing prices too steep for Chicago pockets

New numbers from Housing Action Illinois show that rental housing is increasingly unaffordable for Chicago area families, according to a new report titled "Out of Reach 2009."

The group has calculated that to afford a modest two-bedroom apartment in the city or metro area, families would have to earn at least $19.31 an hour, more than the median wage of $17.20 an hour and more than twice the Illinois minimum wage of $7.75.

And despite falling prices in the housing market, rental prices seem to be going up. Just a year ago, Housing Action Illinois reported that the same two-bedroom apartment would have required earning $18.15 an hour, still out of reach for the average worker, but less than this year's figures.

Adam Gross, an affordable housing expert at Business and Professional People for the Public Interest, says that while it's counterintuitive, fewer people are buying houses right now, which means more people are renting. That, along with rental buildlings falling into foreclosure, means the supply is shrinking while the demand is rising.

"When you add it all up, it means many more people are competing for fewer and fewer units," says Gross. "

The data is based on the federal guidlines that people should spend around 30 percent of their income on housing in order to pay the rest of their bills. Gross says that percentage is incredibly important in the life of a family. Families start making terrible tradeoffs when they have to spend much more than 30 percent on rent.

"They put their health at risk by spending a lot less on food or health care, losing their phone service or getting the gas shut off," says Gross. "They put their credit and their financial future at risk by missing monthly payments on credit cards and student loans."

For people making the minimum wage, affording a Chicago area apartment either means working all hours of the day or having more than two people contributing to the family income. At $7.75 an hour, someone would have to work over 100 hours a week or have 2.5 people working 40 hours a week year-round, according to the study.

Housing Action Illinois estimates that over half of people living in the Chicagoland area couldn't afford to rent the two-bedroom apartment in the study. Gross says the picture is even more grim when you consider just the city, without the suburbs.

"Just within the city of Chicago, where incomes are lower and housing costs are still high, I think housing is even more out of reach,'" says Gross.

Staff Writer Megan Cottrell covers public housing for the Daily News. She can be reached at 773-362-5002, ext. 12, or megan [at] chitowndailynews [dot] org.

Discuss

JOSEPH PALMER, 05-03-2009

Okay, so what do we do about it? How do we as individual citizens or as a collective handle these situations? I am at a loss, seeing as how a landlord will quite possibly say, you can't afford it, you've got 30 days.. and then what? Seems like a loosing battle.. :(