“Policies aimed at decreasing inequality by increasing homeownership often achieve the opposite,” said Zillow chief economist Stan Humphries in a column that appeared this past weekend on USAToday.com.
“Overall, homeownership is a tremendous boost to millions. But in some specific cases, it simply does not deliver as advertised,” Humphries wrote. “[…] And our steadfast belief that homeownership is always the better option has led us to worry less about the one-third of Americans that rent, leading to a crisis in affordable rental housing.”
In no state can a full-time minimum wage worker afford fair market rent for a one-bedroom or a two-bedroom apartment.
In Alabama, a minimum wage employee would have to put in 72 hours per week for 52 weeks each year to afford rent and utilities on the average two-bedroom apartment.
The answer, some say, lies in a dedicated stream of funding to build or rehab affordable rental housing. In 2008, the Bush Administration established a national pool of funds dedicated to housing low- and extremely low income Americans displaced by the economic crash. Most states supplement federal money with their own dedicated funding to provide more options for affordable rental housing. In 2012, Gov. Robert Bentley signed the Alabama Housing Trust Fund into law. However, Alabama is one of six states whose housing trust is authorized but unfunded in the state budget.
This session, lawmakers will again consider whether to provide state funding for rental housing. House Bill 141 is with the House Financial Services Committee. The bill would increase mortgage recording fees from 15 cents per $100 to 30 cents, placing nearly $20 million into the Alabama Housing Trust Fund.
An economic impact study conducted by Auburn University economics professor Dr. Keivan Deravi showed that Alabama needs about 90,000 rental housing units in order to meet the current need. That study also projected that investing $20 million annually into a housing trust fund would generate $1.1 billion in the state economy over 10 years, support 6,500 full time jobs, and produce more than 7,100 homes.