Approximately 40% of working Oklahomans cannot afford a modest rental home because of low wages and an affordable housing shortage in most of the state, according to an analyst with the Oklahoma Policy Institute.
Sabine Brown, an infrastructure and access senior policy analyst, blogged that 2 in 5 “Oklahomans are unable to afford a stable home working one full-time job. The combination of rising housing costs and stagnant wages is keeping too many Oklahomans from being able to secure safe and stable housing for their families. To address this affordable housing crisis, policymakers must find solutions that close the gap between housing costs and wages.”
Brown was part of an online meeting in April that addressed affordable housing problems including those in southwest Oklahoma.
Unfortunately, Brown said, legislative measures that would have addressed the housing shortage stalled in the Oklahoma Legislature this session. Oklahoma needs more than 81,000 homes or apartments to meet the affordable housing shortage for low-income residents, Brown said.
The Oklahoma Policy Institute held listening sessions across the state and “heard of the lack of affordable housing in rural and urban areas,” the analyst said.
Low-income is defined as someone earning 30% or less than the area median income. Information provided by the National Low Income Housing Coalition and the Economic Policy Institute found that residents in Oklahoma would need to earn at least $16.61 an hour to afford a two-bedroom rental while working 40 hours a week. That hourly wage does not include paying other bills such as groceries, gasoline and insurance. Oklahoma’s minimum wage is $7.25 an hour.
“There’s a lot of folks who can’t afford to make it,” Brown said.
Workers employed in more than half of the state’s most common professions don’t make enough to afford a modest home or apartment, Brown wrote in her policy blog. On average, 17 of the 30 most common professions in Oklahoma — including teacher assistants, home health aides and customer service representatives — pay less than the $16.61 which is needed to pay for the two-bedroom rental.
Other professions that often don’t pay enough to afford modest housing include emergency medical technicians, childcare workers, medical assistants, and phlebotomists.
“Workers in these professions provide vital services to our state. At a bare minimum, they should be able to afford a roof over their head in exchange for that work,” Brown wrote. “Rents have increased dramatically, and wages haven’t gone up.”
In Oklahoma, there are only 46 homes available for every 100 extremely low-income renter households, which is defined as a household of four earning less than $26,000. The National Low Income Housing Coalition found that two in three extremely low-income households in Oklahoma are severely cost burdened, meaning they spend more than half of their income on housing costs, Brown wrote in the policy blog.
“These families are more likely than other renters to sacrifice necessities like food or health care to pay rent. If Oklahomans had better access to affordable housing options, it would mean families would not have to face the terrible choice between a home and putting food on the table or getting a needed car repair,” she wrote.
Oklahoma’s minimum wage has been unchanged since 2009 and has not kept up with inflation and rising housing costs. Rent is up 27.6% in Tulsa and 25.7% in Oklahoma City since March 2020, Brown wrote. Affordable rent (rent that makes up no more than 30% of household income) for a minimum wage worker is $377 per month. However, fair market rent for a one-bedroom rental in Oklahoma is $684 per month and $863 per month for a two-bedroom rental.
“Making matters worse, the current annual inflation rate is 8.3% with energy prices and food costs experiencing the largest increases since April 1981,” Brown blogged.
Brown noted that “people with solid full-time jobs” have a difficult time finding “modest middle-class homes.” She also acknowledged that a minimum wage employee would have to work 92 hours a week to earn enough money for a two-bedroom rental.
“There’s not enough hours in a week,” she said. “A lot of folks stretch their budget to spend more and more on housing.”
Potential assistance
The low-income housing shortage could be addressed by legislative action that was stalled this session including House Bill 2098, which was authored by Rep. Forrest Bennett (D-Oklahoma City) and sponsored in the Senate by Sen. John Michael Montgomery (R-Lawton). The measure would allow the seller of residential property to donate up to 1% of the sale proceeds to the Oklahoma Housing Finance Agency to be used by the agency to promote affordable housing in the state. The donation would be tax deductible with a cap of $5 million.
Legislators also passed on HB 2040 which would increase the tax credit developers receive for qualified affordable housing projects from $4 million to $10 million.
Both measures received bipartisan support but were not made priorities by House and Senate leaders.
“I think part of the issue is the education debate took up a lot of time and energy at the Capitol,” Brown said. “Lawmakers typically have more bills than they can hear. Still, we have good support, and those bills can be heard next year.”