Maryland Alliance for the Poor

The Maryland Alliance for the Poor pursues public policies and funding that protect the well-being and dignity of Maryland children, families, seniors, and single adults living in or near poverty.  MAP believes that State policy should assist Maryland residents with limited financial resources to move beyond their current circumstances, with the help of progressive policies on the inter-related issues of homelessness, affordable housing, energy, health, hunger, employment, taxes, child care, and welfare reform. 

 

Affordable Housing

Safe and affordable housing is critical to building and sustaining families, communities, and Maryland’s economy. However, the supply of affordable housing in Maryland does not meet demand, and the number of affordable units is shrinking. Rent rises faster than wages, and growing numbers of Marylanders find it difficult to locate affordable housing for themselves and their families. The Governor’s Commission on Housing Policy (2004) has identified a statewide shortage of 157,000 affordable housing units over the next 10 years. The affordable housing crisis in Maryland has a far-reaching impact upon businesses and the State’s economy as a whole. Six of Maryland's 10 most in-demand occupations do not pay enough for workers to be able to afford a two-bedroom apartment at fair market rent. These occupations include: teachers, salespersons, cashiers, wait staff, service workers, janitors, and food preparation staff. The recent rise in home energy costs presents an additional challenge to low income residents, who may spend up to 25% of their income heating their homes. 
The 2005 Out of Reach report by the National Low Income Housing Coalition revealed the following alarming facts about Maryland’s housing predicament:
  • Maryland was ranked as the sixth least affordable state in the nation for housing.
  • 51% of Maryland renters are unable to afford a two-bedroom unit at fair market rent.
  • A worker earning the Minimum Wage ($5.15 per hour) must work 152 hours per week for 52 weeks a year to afford a two-bedroom unit at fair market rent.
  • The Housing Wage in Maryland is $19.62. This is the amount a full time (40 hours per week) worker must earn per hour in order to afford a two-bedroom unit at the fair market rent (Baltimore Metro area — $950; Washington Metro area — $1,225).
  • Maryland’s housing wage is 381% of the minimum wage.
  • Maryland had the largest increase in housing wage of any state in the country—12.09% between 2002 and 2003.
The affordable housing crisis in Maryland has a far-reaching impact on businesses and the State’s economy as a whole. Six of Maryland's ten most in-demand occupations do not pay enough for workers to be able to afford a two-bedroom apartment at fair market rent. These occupations include: teachers, salespersons, cashiers, wait staff, service workers, janitors, and food preparation staff.
Current Services
Maryland’s current housing programs are good mechanisms for affordable housing development, however these programs have stagnated because of reduced or flat funding during the 1990’s.
•       The Rental Housing Production Program (RHPP) assists developers of affordable rental housing with construction costs. RHPP has funding of $18.85 million for FY ‘06. The program was funded at $20.5 million in 1995, but experienced a significant reduction in FY ‘96 that has not yet been fully restored.
•       The Partnership Rental Housing Program (PRHP) provides loans of up to $85,000 per unit for rental housing that will be occupied by households earning below 50% of the statewide median (or approximately a maximum of $33,000). The program requires a local government to provide the building site and to take an ownership interest in the project. PRHP has also been subject to significant reductions having been funded at $15 million in 1998. Its current funding is $6 million.
•       The Maryland Affordable Housing Trust (MAHT) promotes affordable housing for households earning less than 50% of area or statewide median income by funding capital costs of rental and ownership housing and by providing financial assistance for nonprofit-developer capacity building. MAHT also funds supportive services for occupants of affordable housing and operating expenses of housing developments. The MAHT fund balance was reduced by $2.3 million in FY ‘04. It has a budget of $2 million in FY’06.
•       The Rental Allowance Program (RAP) provides monthly rent assistance for low-income families who are homeless or have an emergency housing need. Eligible households have income at or below 30% of the statewide or area median income, whichever is higher. The monthly payments are fixed amounts, depending upon the size of the family and the location of the rental housing unit in the state. Payments can be received for up to 12 months, and may be extended under special circumstances. This program was funded with $1.8 million transferred from the MAHT in FY ’04. The program’s limited resources have been cut since its inception; it has FY ’06 funding of $1.8 million.
•       Section 8 is a federal rental assistance program, administered by the U.S. Department of Housing and Urban Development, that subsidizes the rent paid by low-income families. The program is available to families or individuals who have annual incomes of 50% or less of the area median income or State non-metro median income, whichever is higher. With a Section 8 certificate, a renter pays no more than 30% of his or her monthly household income. In many Maryland jurisdictions, waiting lists for Section 8 assistance are years-long and landlords who will accept Section 8 tenants are scarce. Federal budgets cuts threaten this program.
Gaps and Challenges
•       Reduced State funding of the rental housing programs has contributed to a shortage of affordable units for low-income workers across the state. A lack of rental production, combined with the low vacancy rate for all rental properties, has created a situation where working Marylanders are unable to afford housing near their places of employment. As affordable housing decreases, workers are forced to move further away from their jobs or to find employment in more affordable areas, thereby affecting Maryland’s economy and making it harder for Marylanders to work towards stability.
•       Housing losses: Approximately 14,000 of the currently subsidized 20,000 affordable housing units are projected to be lost statewide over the next four years.
•       More families experience homelessness: In FY ‘04, families accounted for 35% of those receiving shelter services in Maryland, up from 31% in FY ‘03. In 17 of Maryland’s 23 counties, more than half of the homeless served were families. Moreover, these statistics do not account for the thousands of homeless families who are doubled- or tripled-up in a single house.
•       Housing is even less affordable for people with disabilities. The average rent for a one-bedroom apartment in Maryland is 150% of the federal disability benefit from Supplemental Security Income (SSI) of $579 per month for a single adult. While the fair market rent for a one-bedroom apartment in Maryland rose by 22% between 2000 and 2002, the SSI benefit increased by just 6%.
•       For ex-offenders, stable, affordable housing is essential to successful reintegration into the community. When men and women are released from prison, they often have little or no financial support. Some turn to transitional housing first, but the resources available are insufficient to serve the needs of the population. In many cases, public housing is denied because of the nature of their offenses. To reduce recidivism, encourage reintegration, and increase community safety for everyone, this population’s specific housing challenges must be addressed.
•       HUD’s definition of “affordable” housing requires that a household pay no more than 30% of its annual income on housing and energy costs. Yet, according to a recent study by the Urban Institute, 80% of low-income Baltimore renters pay more than 30% of their income for rent; two-thirds pay more than 50% of their income. At least part of Baltimore’s 12.2% rental eviction rate — roughly 7,500 per year in the mid-1990s — must be associated with these serious affordability problems.
•       High home energy costs present an additional challenge to low-income households. For people living in poverty, the cost of home energy alone can use up close to 25% of their income. Over the past two years, the cost of natural gas has increased significantly in all parts of Maryland.
 

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