Young Renters Struggle to Afford Housing in Upper Valley
Girlfriends Tiana Liu and Jess Norton relax together Friday evening in the trailer in Lebanon they share with a third roommate. The couple lived with Liu’s parents before moving to the trailer, which they rent from Liu’s grandparents for $650 a month plus utilities. (Valley News - James M. Patterson) Purchase photo reprints »
When it comes to housing costs, 30 is the magic number.
Housing experts say no more than 30 percent of a household’s gross income should be spent on a mortgage or rent and related expenses, such as taxes and utilities. Paying more can mean skimping on other necessities, such as food and medical care. But with the cost of housing outpacing incomes, holding to the 30 percent mark is becoming more challenging, especially for young renters.
If not for her grandparents, 22-year-old Tiana Liu says she and her girlfriend, Jessica Norton, would still be living with Liu’s parents in Lebanon. They wouldn’t be unusual — according to a recent report by the PEW Research Center, 41 percent of adults age 18-34 were living with family in 2011. But independence is important to the couple, who met as students at Keene State College, and last summer they started pricing apartments in Lebanon.
Their budget is limited — Liu earns $8 an hour at Jo-Ann Fabric and Craft in West Lebanon, and Norton, a teller at Mascoma Savings Bank, makes about $12. They weren’t finding much they could afford on their own, Liu said. But then her grandparents, Pati and Ron Hooker, who live in a trailer park in Lebanon, bought and renovated the home next door. When they offered to rent the two-bedroom trailer to Liu and Norton, they jumped at the chance.
Rent and site fees are $650, and heat and electricity total about $195 a month. All told, the couple paid about 24 percent of their combined income for housing. But both have car and student loans, and money is still tight.
The 30 Percent Struggle
While it’s widely accepted as a guideline today, 30 percent is a relatively new threshold in the housing game. Until 1969, the target amount was 20 percent, according to a paper based on the 2006 American Community Survey. “Who Can Afford to Live in a Home?” says the standard was set in 1940 as part of a public housing program designed to help families in the lowest income bracket. “Spiraling operation and maintenance costs” led to its being raised to 25 percent in 1969, the report’s authors said. In 1981, the threshold rose to 30 percent.
“We keep pushing the envelope in terms of what percentage of people’s income they should expect to spend,” said Julie Iffland, executive director of Randolph Area Community Development Corporation.
Locally and nationally, it’s becoming harder to live within those parameters.
Using the 30 percent rule, a single renter with an hourly wage of $10 could afford to pay up to $520 a month for housing costs. But locally, rental housing under $600 per month is virtually nonexistent, except for rental-assisted units, which are in short supply, according to a housing needs assessment released last year by Upper Valley Lake Sunapee Regional Planning Commission.
In 2012, the New Hampshire Housing Finance Authority’s annual survey found the median gross rental cost in Grafton County was $925. In Lebanon, where jobs and housing are concentrated, the median jumps to $1,264.
Kevin Geiger, a senior planner at Two Rivers-Ottauquechee Regional Commission, which is currently working on a regional plan for sustainable development in East Central Vermont, points to a “mismatch” between the cost of available housing and what people can afford to pay.
“What we continue to find is the housing stock does not match the people,” Geiger said.
And speaking of people, he says there’s a misconception about who is affected by high housing costs. In reality, a broad spectrum of local residents with traditionally middle class occupations — including firefighters, police officers, plow drivers and ambulance personnel — struggle to find affordable places to live.
When housing costs exceed the 30 percent threshold, “people stretch” to accommodate their needs “and make ends meet as best they can,” he said.
The costs can prove especially daunting for those living alone.
Anne Morin, a Bedford, N.H. native, moved from Manchester to the Upper Valley four years ago for her first full-time teaching gig.
A kindergarten teacher in Lebanon, Morin, 31, rents a small two-bedroom apartment. She pays $975 for rent and heat, plus about $20 for electricity. The price is pushing the 30 percent rule, but her landlord keeps the place up, and she’d prefer not to have roommates. After a day with kindergartners, she’s all about peace and quiet.
“It’s worth it to me to have a more comfortable (space),” she said.
A National Issue
In 1999, the Census Bureau found that about 37 percent of rental households in the United States were paying more than 30 percent of their gross incomes for housing. By 2010, 49 percent of renters spent more than that, according to a study by the Carsey Institute at the University of New Hampshire. Study author Jessica Carson, a researcher at the institute, drew her data from U.S. Census Bureau estimates from the 2007, 2010, and 2011 American Community Survey.
The percentage of “cost burdened renters,” those spending more than 30 percent on housing, rose during the recession, the report found. Between 2007 and 2010, median gross rental prices increased by about 3 percent, while real median household income among renters fell by 6 percent.
“The recession created all kinds of social changes,” including a greater number of families using food stamps, heat and fuel assistance, Carson said in an interview. For many families, their personal safety net has “kind of worn thin.”
Locally, 42 percent of renters spend more than 30 percent of their incomes on housing, according to the report by Upper Valley Lake Sunapee Regional Planning Commission. Of those under age 35, 46 percent have a high housing cost burden.
Younger households tend to earn less, so they generally have greater rental burdens, said Dan Smith, director of housing research, New Hampshire Housing Finance Authority.
“It’s a pretty well established demographic trend,” Smith said. “You start your way at the bottom and work your way up, so that is a large effect.”
Anne Duncan Cooley, executive director of the Upper Valley Housing Coalition, said increasing student loan debt is eating into young people’s housing budgets.
“You’ve got a couple of things can cut back on,” such as owning a car, she said. But being without one “really restricts your housing choices here.”
Long on Fun, Short
To cut costs, many, like Norton and Liu, seek out a roommate. Liu’s longtime friend August Branch, 22, moved in last December.
Splitting costs three ways helps a lot, said Norton, 25, though they still need to be frugal.
In their living room, three colorful couches, all bought secondhand, are strewn with thick blankets, testimony to their habit of keeping the thermostat low.
They rarely go to bars or out to eat, and often host potlucks at home, which work out well, said Branch, a cook at Five Guys in West Lebanon.
After a get-together last month, guests left behind a good bit of pizza and other food.
“We ate for like three days,” he said, smiling.
They also buy “a lot of Chef Boyardee,” Norton said, and look for ways to have fun at home.
On a recent Friday afternoon, the three “huge musical theater junkies” watched Les Miserables on DVD, Liu said. Their shared sense of exuberance means that even when the TV’s off, silence is uncommon.
“There’s lots of singing and dancing and yelling for no reason,” she said, grinning.
The gray trailer with dark, red trim that is their home is the last residence on a dead end road. It’s adjacent to a big field, and a basketball hoop overhangs the driveway. Inside, the freshly painted gray walls are adorned with a framed poster of Marilyn Monroe and homemade art. The wood floors are new.
“It’s nice for a ‘first-time-out-of-your-parents’ house’ situation,” Liu said.
In addition to making rent and repaying her loans, Liu is also paying for online courses in business. A former Lebanon High School football player, she left college after two years to play professional women’s football and currently plays with the Boston Militia. A youth football coach and Little League umpire, she hopes to earn a bachelor’s degree in sports management and work in youth development or recruitment.
In the meantime, she said, “I don’t really save much.”
Norton, who has a bachelor’s degree in political science, would like to go back to school to get a teaching degree. But that will require pulling together money for tuition. Her parents helped with her expenses when she was in college, but since graduating, she’s paid her own way.
“It feels good to be independent, but it’s also scary,” she said. “There’s no net. There’s just me.”
‘How do we get young people here ... and where will they live?’
Regional planners say more affordable rental properties could help the famously graying Twin States attract and keep young people. (According to the housing needs assessment, in 1990, about 13.8 of the region’s population was 65 or older. In 2010, that number was 16.4 percent. If the trend continues, seniors are expected to comprise about 34 percent of the region’s population by 2030.)
For its sustainable development study, Two Rivers-Ottauquechee will look at such factors as transportation, public utilities, natural resources and energy, and housing.
Housing costs are integral to economic development, said Loralee Morrow, regional planner with Two Rivers-Ottauquechee. “How do we get young people here ... and where will they live?”
Like Morin, Mike Dann and Danielle Ferry came to the Upper Valley for work. The couple, who are originally from central New York, are getting married in December. They had hoped to keep their housing costs as low as possible in order to save for a home.
“I’m pretty fortunate with my career” and the income it provides, said Dann, an electrical engineer. But both have school and car loans, and even with a combined income of about $60,000 putting money away is proving difficult.
Ferry is a clinical case manager at Clara Martin Center in Randolph, and Dann works for Astronics in Lebanon. With two cars, they needed two parking spots, and they wanted to find something between their two workplaces, ideally a one-bedroom apartment, with utilities included.
“Heat can really add up in Vermont,” said Ferry, 24.
They searched Craigslist, newspaper ads and bulletin boards, hoping to pay $1,000 a month or less. But, they discovered, “we couldn’t meet our needs with that,” Ferry said.
There weren’t a lot of options, she said. Many one-bedroom apartments offered only one parking space, and they couldn’t find a suitable place that included heat. And being old, the apartments had their quirks.
Their bed is on wheels, and one place had floors so slanted, they were “going to end up in the living room,” said Dann, 26, laughing.
In the end, they found a two-bedroom apartment just off the green in Woodstock. At $850, plus about $70 for electricity and fuel bills that can reach $350 a pop, it’s within the 30 percent range, but still more expensive than they’d hoped.
“This is the top end,” Ferry said. “It’s temporary, but we want to be comfortable.”
The location, within walking distance of a movie theater and stores, suits them, and they’ve found a use for the extra bedroom. It serves as a home office, exercise room and mini greenhouse — a shelf near a window boasts dozens of seedlings sprouting from neatly labeled egg cartons.
“The space is pretty nice,” Dann said. And Woodstock is “a beautiful town.”
Eventually, they want a house, with land for a dog to run around on. But for now, they’ll keep paying down their loans, watering their tiny lettuce plants and enjoying their lone pet. “Buddy,” a bearded dragon, inhabits a terrarium in their living room. The knobby reptile is happy eating crickets and lettuce.
And, perhaps unlike a dog, he’s well suited for apartment living.
Aimee Caruso can be reached at email@example.com or 603-727-3210.