Rental costs outpace wages in Topeka, Kansas

The cost of rent is outpacing wages in Kansas and across the country. THe average renter in Kansas makes just over $13 per hour, but afford a modest apartment at fair market value, renters need to make $15.59, according to a recent report. (Chris Neal/The Capital-Journal)

Renters in Topeka need to make more than double the minimum wage to afford a modest apartment in the city, according to a recent report that highlighted the gap between wages and the cost of rental housing.

 

The National Low Income Housing Coalition annually calculates a “housing wage,” an estimate of what a full-time worker must earn hourly to afford a modest and safe rental based on a fair housing standard from the U.S. Department of Housing and Urban Development that no more than 30 percent of income should be spent on housing. According to this year’s report, renters in Topeka need to earn $14.62 per hour to afford a modest two-bedroom apartment or work two full-time jobs at the minimum wage of $7.25. On average, Kansas renters must earn $15.59 an hour.

With the average rental costing $760 per month in Topeka, according to the report, a renter must earn at least $30,400. That means many Topekans on a fixed income, such as those with disabilities and the elderly, are priced out of affordable housing, along with low-income earners.

It’s a problem Sophie George, CEO of the Topeka Housing Authority, is familiar with. THA has a waiting list close to 2,000 for Section 8 housing vouchers and 800 more are waiting for a spot in a public housing unit.

“I’ve been here 18 years and I’ve not seen it let up,” she said. “It’s a constant need.”

Though the cost to afford a modest rental in Topeka is higher than the state average, the city isn’t in the top five most expensive. Renters in Lawrence need to earn $16.25 and $16.10 in Manhattan. At $18.19, the Kansas City metro has the highest housing wage.

The average two-bedroom rental in Kansas costs $811 at a fair market rate, lower than the national average of about $1,100.

Buying a home is often cheaper long term, Chris Burk, credit-counseling manager at Housing and Credit Counseling Services, said. Monthly payments on a $60,000 home could be as low as $400 to $500, he said, a significant savings from rent in the $700 to $800 range.

However, low-income buyers often run into credit issues and banks may not be willing to loan to those with limited income and high debt, he said. Buyers also need to cover a down payment and closing costs, but with low income and high rents, it can be hard to cover those costs.

“They get stuck in these scenarios where they’re paying more for rent and they can’t save up much,” he said.

Many low-income buyers find $20,000 to $30,000 homes, which fit easily in their budget, Burk said. While cheap up-front, those homes come with added costs that may surface later, such as significant structure issues, roof repairs and replacing aged HVAC systems.

The federal government spends between $8 to $10 billion per year subsidizing the Low-Income Housing Tax Credit program, which builds units renting in the $700 to $1000 per month range, Kirk McClure, a professor in the University of Kansas’s Department of Urban Planning who specializes in affordable housing, said. He cautioned that the housing wage report shouldn’t be an endorsement to build more apartments. The average vacancy rate is more than 7 percent in most markets, which McClure called “high.”

“Research shows that prices do not come down when more units are built, so building more units is not going to solve the problem,” he said.

Instead, McClure said the issue nationally, and in Kansas, is low wages.

“The units are priced reasonably. We have too many households who cannot afford to enter the housing market because of their very low incomes,” he said “The answer is not to build more units; the answer is to raise the incomes.”

A discussion about the state’s minimum wage is “long overdue,” Topeka Democrat Sen. Laura Kelly said. In the meantime local, state and federal housing programs need to better coordinate.

The city of Topeka, through federal grants and community partners, offers a number of programs designed to keep low- to moderate-income Topekans in their homes, such as Topeka Opportunity To Own, a program that helps low- and moderate-income families and individuals become first-time home buyers and Shelter Plus Care, which helps those with severe persistent mental illness, AIDS, or abuse of alcohol or drugs avoid homelessness by helping pay rent while they are enrolled in treatment.

Additional programs are available through the state, but there’s a lack of coordination to ensure those who need affordable housing assistance are finding the resources, Kelly said. Often state and federal programs are not tailored to local needs.

“I think it needs to be individualized to each community’s need,” she said. “It’s not a one-size-fits-all. What’s needed in Garden City may be different than what’s needed here or in Galena.”

Contact reporter Luke Ranker at (785) 295-1270 or @lrankerNEWS on Twitter. Like him on Facebook at facebook.com/lukeranker.

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