Press: News clips

Vt. housing/wage gap widens
By John Curran

WINOOSKI—The median purchase price of a single-family home in Vermont rose to $197,000 last year, putting it out of reach of more than two-thirds of households and underscoring the difficulty facing people wanting to buy, according to a report released Thursday.

Up 8 percent from 2005, the price represents a 97 percent increase over the last 10 years, according to the sixth annual "Between a Rock and a Hard Place: Housing and Wages in Vermont" (748 kb; PDF) report.

The average monthly "fair market" rent for a two-bedroom apartment, meanwhile, reached $797 in 2006, too high for anyone making less than $15.34 an hour, according to the report.

"We have a serious housing shortage," said Molly Dugan, deputy commissioner of the state Department of Housing and Community Affairs. "The gap between what Vermonters have available to spend on housing and the cost of housing in the state is growing at an alarming rate."

The report, which was issued by the Vermont Housing Council and the Vermont Housing Awareness Campaign, paints a grim picture of Vermont's affordable housing situation, which advocates say keeps poor people down, hurts the state's economy and stymies job creation.

While the median price of a single-family home rose at a slower pace than it had in recent years, rents and home prices are still growing faster than wage increases, the report said.

"The average household is not within shooting distance of the average housing price," said Sarah Carpenter, executive director of the Vermont Housing Finance Agency.

According to the report:
The median price for a newly built house jumped to $282,200 in 2006, a 15 percent increase over the previous year. A family would need annual income of $93,000 to afford that.

To afford a $197,000 home, an annual household income of $66,000 is needed, but 67 percent of Vermont households make less than that.

The median income for Vermont households is $48,500 a year, enough to buy a home priced about $143,500.

Vermont had the tightest rental housing market in the nation last year, with a vacancy rate of only 3.6 percent. To pay $797 a month for rental housing, a family would need to make $31,897 annually. But at least 59 percent of Vermont's non-farm employees — or more than 163,000 people — work in occupations with median wages lower than that.

While double-income families might be able to afford such prices, 61 percent of the state's households have one income or less, according to the report.

"People's incomes are just not keeping up with our state's soaring housing costs," said Erhard Mahnke, coordinator of the Vermont Affordable Housing Coalition. "It is a huge problem and it has to do with misaligned priorities."

About 400 new affordable housing units are created a year through federal and state initiatives in Vermont, but it isn't enough, Mahnke said.

Paying too much for housing takes away money from other essentials, including food, transportation, clothing, medicine and child care, leading to a "downward spiral" that ends in homelessness, Mahnke said.