The National Low-Income Housing Coalition (NLIHC), a Washington, D.C.based advocacy group, recently caused a media stirincluding front-page USA Today and Wall Street Journal storieswhen it released Rental Housing for Americas Poor Families: Farther Out of Reach than Ever, a report claiming that America faces a grave new housing crisis. A minimum-wage worker, even employed full-time, the group charges, cant afford a fair market rent30 percent of incomefor a two-bedroom apartment in any jurisdiction in America. The coalition calls for federal leadership to solve the problemmeaning, presumably, the construction of more subsidized housing or an increase in the number of households receiving housing vouchers to pay the rent.
Credulous reporters failed to examine three dubious assumptions that underlieand discreditthe report. First is the belief that large numbers of workers will remain indefinitely stuck in minimum-wage jobs. Census Bureau data show that workers making the minimum wage will on average be earning 30 percent more 12 months later. Just 2.8 percent of all employees above the age of 30 make the minimum wage.
Second is the implication, reflected in the two-bedroom criterion, that many minimum-wage workers head up households. In fact, only a small percentage do. Nearly nine out of ten minimum-wage earners live with their parents or relatives, or with a working spouse.
Third, and more pernicious, is the assumption that it would be wise social policy to ensure, through government assistance, that the 10 percent or so of minimum-wage earners who do head households be able to rent their own apartments. Census data make clear that a majority of those whod receive help would be young single mothers with childrenthe same type of household that already dominates public housing, where only 8 percent of the occupants are two-parent families. Currently, low income doesnt automatically qualify a household for a public housing apartment or a rent voucherunlike public assistance, housing help isnt an entitlement. Only 30 percent or so of those households whose income makes them eligible for housing assistance presently get it. What the coalition really wants is for more such households, if not all of them, to receive housing subsidies.
Nothing could be more misguided. By offering any 18-year-old girl with an out-of-wedlock child the chance to have her own apartment at no cost and in perpetuity, we run the obvious risk of encouraging the formation of more such families, which are, of course, major incubators of social pathology.
The NLIHC report by no means identifies a new crisis; but, if taken seriously, it would create one. Too bad the press played along.