Getting Ahead: WHAT DOES IT MEAN TO BE RENT-BURDENED?
By Patricia Jones, Alliance Community Task Force: Creating Opportunity
If you rent a place to live, how much of your income should you be spending on rent? The simple answer is 30%. But what does that include, and how is it calculated?
First, calculate your monthly housing costs. Start with how much you pay for rent. Then add any utilities you are responsible for. This is electricity, water, sewer, refuse - in Alliance, all the things on your City of Alliance bill. Add your bill from Black Hills Energy that covers your natural gas expense. The total is your monthly housing cost.
Your rent burden is your monthly housing cost divided by your monthly income. Multiply by 100 to convert it to a percent.
If you have rent of $500, city and gas utilities of $250, your monthly housing cost is $750. With a household income of $2500, then 750÷2500=.3; .3×100=30%. You are not rent burdened.
If you have rent of $700 and utilities of $300, your monthly housing cost is $1000. With an income of $2000, then 1000 ÷ 2000 = .5; .5 × 100 = 50%. You are rent burdened.
In the last three to five years, rents in America have skyrocketed. Housing values have increased. Costs for repairs have increased. Taxes have increased. And there is a housing shortage throughout America. A housing shortage means there isn't any reason for landlords to lower rent.
22.4 million American households are rent-burdened, meaning they are spending more than 30% of their income on their housing costs. In Nebraska, 43.5% of renters are considered to be rent-burdened, according to the OpenSky Policy Institute. OpenSky is a nonpartisan organization in Lincoln that provides fiscal research and analysis.
Low-income families are more likely to rent than to own housing. Low income means their household income is less than 200% of the federal poverty threshold. They often end up in substandard housing that would not pass a building inspection.
The best solution for low-income families is to apply for HUD assistance from the federal Department of Housing and Urban Development (HUD) for public housing or Section 8. The Alliance Housing Authority (AHA) charges 30% of a household's income for rent in their housing units. There are several things that can be deducted from their income prior to calculating the rent amount. There are also utility allowance amounts based on the unit and the family size.
AHA has 59 total units; 49 duplex apartments and 10 houses. All units are currently full, but there is a short wait list. People must first live in an apartment before they qualify for a house.
They must prove that they will take care of the unit, be courteous to other residents, and pay their rent on time. They must also take care of their own lawns and do their own snow removal or hire someone to do it for them. None of the houses are handicap accessible; however, there are three accessible units in the duplex apartments.
People who qualify for Section 8 assistance rent homes from private landlords. The Section 8 program is run by the Alliance Housing Authority, but each owner is responsible for leasing and managing their own properties. Families may not earn more than 50% of the median income for the county. These families also pay 30% of their income for rent. The federal government provides a voucher to subsidize the rent from HUD. This subsidy is paid directly to the landlord.
Applicants for low-income or Section 8 housing must be citizens or legal residents of the United States. They must meet income guidelines, and they must pass a criminal background (NCIC) check through the FBI.
Rosewood Estates in Alliance also has income requirements, but they do serve moderate income individuals who are at least 55 years old. They are managed by EXCEL Development and do not come under HUD. Section 8 vouchers can be obtained from the AHA for rent assistance at Rosewood.
Our area is fortunate that we have alternatives for people who do not earn enough to pay their rent on the open market. If you are rent-burdened, visit the Alliance Housing Authority, 300 South Potash #27, Alliance. Phone 308-762-5130 for more information.