Poverty as a math problem
Editor’s Note: This is the fourth column in a six-part series under the theme “Poverty is a math problem (and so much more).”
Last month, the U.S. Census Bureau released the 2017 American Community Survey (ACS). One of the most anticipated federal reports that come out each year, the ACS provides a current snapshot of the poverty rate, annual median income, percentage of health-insured citizens, and myriad additional demographic measures on local, state and national levels.
The 2017 ACS reveals for the second year in a row that America’s poverty rate has dropped and positive trends are being witnessed throughout the nation and here in Minnesota, including outcomes for people of color. For example, Black Minnesotans have experienced an overall increase in household income and a decrease in poverty.
These gains, however modest, are a step in the right direction. Nevertheless, they seem relatively proportionate to improvements across racial categories, and as such they demonstrate very little in the way of mathematically altering Minnesota’s wide-ranging and dogged disparities.
Then there is the issue of housing, which is another math problem altogether. Recent data from the U.S. Census Bureau and the University of Minnesota-managed National Historical Geographic Information System (NHGIS) reveal that our homeownership gap is actually getting worse. While homeownership has decreased among all groups over the last decade, both Minnesota and the Twin Cities are near the top among their respective state and metro peers with homeownership rates well above 70 percent.
By the same token, the Black homeownership rate in the metropolitan area is the lowest in the nation. It has fallen to 23 percent since 2005, which is roughly half the Black homeownership rate nationally. Homeownership in Hispanic households has also dropped below 40 percent, and Native American rates come in shy of that figure as well.
If these numbers are not troubling enough, consider the plight of renters and the dearth of affordable housing in our cities and towns. The National Low-Income Housing Coalition’s (NLIHC) Out of Reach 2017 report ranks Minnesota as the 21st most expensive state in which to live and the second costliest housing market in the 12 state Midwest/Upper Midwest region.
What does that mean exactly? Well, it means that the average hourly wage required to afford a fair-market-value two-bedroom apartment in the Twin Cities is $20.88. And further calculation shows that a single-parent with two children who works full-time at a wage of $10 per hour (placing the household just above the federal poverty threshold) would need to work more than 83 hours a week to earn enough to rent such an apartment.
Today in the Twin Cities there are approximately one-third as many affordable housing units as there are low-income renters. One can cite a number of reasons for this, not the least of which is the removal of affordable housing in favor of new upscale apartments and condominiums.
A prominent instance of this kind of behavior can be seen in the 2017 documentary Sold-Out: Affordable Housing at Risk. In a joint effort by TPT Minnesota and the Minnesota Housing Partnership (MHP), the filmmakers highlight the 2015 redevelopment of the former Crossroads apartment complex along Interstate 494 in Richfield.
Now known as The Concierge, this renovation project displaced hundreds of low- and moderate-income households. In Sold Out, the president of the St. Paul-based Housing Justice Center, Timothy Thompson, states, “In 2014, the region was able to build 770 new affordable units, using all of our resources and all of our efforts. When the 700 units in Crossroads were converted, that in effect cancelled out virtually all of that gain from that year’s worth of effort.”
As MinnPost’s Peter Gallaghan notes, the tragic impact of such redevelopment projects is not limited to the families and individuals forced out of their homes, but the larger community as well. In the aftermath of The Concierge a small local business was shuttered, and the related loss of enrollment in the local school district forced the layoff of nearly three dozen faculty, administrators, and support staff.
Another critical problem is the high percentage of households classified as cost-burdened, which means they spend in excess of 30 percent of their annual income on housing costs. The Amherst H. Wilder Foundation’s Minnesota Compass project explains: “People whose housing costs exceed this threshold of affordability are likely to struggle to pay for other basic needs, forcing difficult trade-offs. Individuals and families who are cost-burdened may drop healthcare coverage, select less expensive childcare arrangements, or skip meals to save on costs, which may result in poorer outcomes in other areas of well-being.”
People of color are substantially more likely to fall into this category as nearly two-thirds of African American households, more than half of Native American households, and nearly one-half of Hispanic households in the seven county metro are cost-burdened. Furthermore, among Minnesota’s 87 counties, Hennepin and Ramsey rank 81st and 87th respectively in percentage of cost-burdened households.
Finally, one more numerical trend that is literally upside down is current market rent as compared annual median income. According to the MHP’s 2017 State of the State’s Housing study, inflation-adjusted rents have increased in 83 of Minnesota’s 87 counties since 2000, with an average increase of nearly 10 percent. During the same period, the median inflation-adjusted income for Minnesota workers has decreased by 11 percent.
So in spite of this state’s reputation as a quality of life leader in a variety of social and economic indicators, including housing, there is still quite a persistent and pernicious math problem going unsolved to the detriment of Minnesota’s low-income residents.
Clarence Hightower is the executive director of Community Action Partnership of Ramsey & Washington Counties. Dr. Hightower holds a Ph.D. in urban higher education from Jackson State University. He welcomes reader responses to 450 Syndicate Street North, St. Paul, MN 55104