Online Tool Shows The True Cost of Living in Metro Areas

11.7.2013 | Back in August, the nonprofit National Housing Conference and Center for Housing Policy released an interactive online database that compares median incomes for full-time employees to the cost of living in 207 US metropolitan areas. Last week, researchers Maya Brennan and Janet Viveiros hosted a webinar to explain the uses behind the resource, called Paycheck to Paycheck, and discussed some of the striking statistics it exposes.

“Paycheck to paycheck is a housing affordability tool that provides a way to look at what challenges workers are facing,” explained the researchers during the webinar.

Users can select one or more of 76 occupations with varying median incomes from its dropdown menu. In addition to searching by job, the tool allows users to search by city, as well as by whether one rents or owns one’s home.

Paycheck to Paycheck creates a graph comparing that data against the median home prices and the income needed to afford them. It also provides median Fair Market Rental prices for one- and two-bedroom apartments, as well as their respective necessary incomes.

“If you look at rental affordability for minimum wage workers, you see a very dire picture,” said Brennan and Viveiros. “Yet, if you look at housing for higher incomes it’s often a rosy picture.”

And when they said dire, they meant it. “Full time employment is not enough to afford home ownership in most metro areas,” they explained, citing one of the key findings from their research for Paycheck to Paycheck.

The tool also offers preselected options, so users do not need to customize their own graphs. Some of these options may even change with the season. For example, for this quarter the tool has been programmed to offer a selection of five travel and tourism-related occupations, whose work is most directly affected by the upcoming holidays.

Paycheck to Paycheck starts with a few assumptions. For example, “affordable” housing means that monthly costs make up 28 percent or less of an employee’s income, and assumes homeowners have a 30-year fixed rate mortgage with a 10 percent down payment. It also uses average effective interest rate figures from the Federal Housing and Finance Agency.

One of the gaps in the tool that Brennan and Viveiros are working to amend is for it to account for national disasters, like Hurricane Sandy, in its calculations. The resource also only features data for Core-Based Statistical Areas, determined by the Department of Housing and Urban Development. These factions often encompass a city and its surrounding suburbs, and so states devoid of “metro areas” like Montana and Wyoming are absent from the selections.

The tool is perfect for, say, figuring out which city is most affordable for mechanics, or deciphering which city has the most affordable housing options, but the researchers hope it will incite larger changes. “You can use the tool to download and share graphs, show that workers face housing affordability challenges in your area, demonstrate the need for continued funding for affordable housing initiatives, and to talk about housing policies that are important in lower-cost areas,” explained Brennan and Viveiros.

It’s also worth noting that Paycheck to Paycheck has emerged amid intense debate about calls for a higher  minimum wage. Thousands of retail and fast food workers staged a strike in support of raising the minimum wage this past August. The Department of Labor notes that, on average, the 7 million working in the fast food industry average $18,770 a year, or about $9 an hour (pretax). The 3.6 million people who actually earn minimum wage barely break $15,000 a year, below the poverty line for a family of two.

Meanwhile, activists from state that the minimum wage would need to be approximately $10.74, compared to today’s $7.25, if it had kept up with inflation over the past 40 years. Senator Tom Harkin has introduced a bill to raise the minimum wage, but puts the odds of the Fair Minimum Wage Act being passed at a paltry 2 percent.

“Clearly there are a lot of problems with not looking at what happens down the road when it comes to housing,” said Brannan. Ideally, resources like Paycheck to Paycheck will help to give these disparities more visibility.


Screenshot / Paycheck to Paycheck

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