Housing Affordability and Economic Security:
What Else Matters?
Prepared for the
11th Annual Leckey Forum
October 18, 2013
AHS thanks the Housing Association of Nonprofit Developers
for its support of this work.
The research was conducted by Joanna Biernacka-Lievestro
at the GMU Center for Regional Analysis.
Context
• Housing affordability is generally defined by
comparing household income to housing costs—
“30% rule.”
• Other costs are rising and take up large shares of
households’ incomes.
• A complete picture of affordability considers all
household expenses.
• Efforts to look holistically include the Living Wage
Project, Self-Sufficiency Standard, Economic
Security Initiative.
• How economically secure are Arlington
households?
Project
• Analyzed monthly budgets for three family
types using actual expenditure data.
• Compared total monthly budgets with total
incomes.
• Assessed gaps between expenses and incomes.
• Compared budget gaps for families living in
market rate apartments versus committed
affordable units (CAFs).
Highlights
• Families below median income struggle to support modest
living standard in Arlington County.
• One- or two-person households need to make 80% of AMI
to break even.
• Four-person households at 80% of AMI cannot meet
expenses.
• Rent is the largest expense, but child care is also a
significant cost pressure.
• Access to CAFs is important, predominantly for families.
• Households are making sacrifices to live in Arlington for
other benefits — most likely schools.
Household Types and Data Sources
• Household types
Household type
Household members
Rental unit type
1 person
1 adult
1 bedroom
2 person
1 adult and 1 child
2 bedrooms
4 person
2 adults and 2 children
2-3 bedrooms
Senior
1 adult 65-years-old or older
1 bedroom
• Data sources
- Annual Affordable Housing Targets Report for FY 2012, Arlington
Department of Community Planning, Housing and Development
- Median Family Income Documentation System for FY 2011, U.S.
Department of Housing and Urban Development
- DC Metro Area Self-Sufficiency Calculator (BEST Index and Elder Index,)
Wider Opportunities for Women
- Consumer Expenditure Survey 2011, Bureau of Labor Statistics
Monthly Budget Components
Expenditure
Rent
Food
Transportation
Assumption
Source
Average rent per unit size
Annual Affordable Housing Targets
Report for FY 2012, Arlington
Department of Community Planning,
Housing and Development
Includes age-specific diet
consisting entirely of foods
prepared and eaten at home.
USDA Low-Cost Food Plan (retrieved
from DC Metro Area Self-Sufficiency
Calculator, Wider Opportunities for
Women)
Includes fuel, maintenance,
license and registration fees,
depreciation, finance charges
and vehicle taxes; cost of public
transit.
American Automobile Association’s
Your Driving Costs, US Department of
Energy, US Department of
Transportation (retrieved from DC
Metro Area Self-Sufficiency
Calculator, Wider Opportunities for
Women)
Monthly Budget Components
Expenditure
Child care
Health care
Assumption
Source
Includes age-specific market rates:
licensed family care rates are used for
infants and toddlers; licensed care
center rates are used for preschoolers
and schoolchildren.
State market rate surveys
(retrieved from DC Metro Area
Self-Sufficiency Calculator,
Wider Opportunities for Women)
Includes health insurance premiums
and out-of-pocket costs. Health care
premiums for workers with employersponsored health insurance are
average premiums.
Non-employer sponsored health
insurance premiums are those for the
least expensive plans which
approximate typical employersponsored plans.
US Department of Health and
Human Services’ Medical
Expenditure Panel Survey
(MEPS), (retrieved from DC
Metro Area Self-Sufficiency
Calculator, Wider Opportunities
for Women)
Monthly Budget Components
Expenditure
Assumption
Includes clothing, housekeeping
supplies, personal care products, a
landline telephone, and minimal life
Personal and
household items insurance and bank fees.
Source
US Bureau of Labor Statistics’
Consumer Expenditure Survey
(retrieved from DC Metro Area
Self-Sufficiency Calculator,
Wider Opportunities for
Women)
Budget Components Excluded
• Taxes
• Public assistance (cash/in-kind)
• Alimony/child support
Arlington vs. Metro Area
Average Rents
Apartment category
Arlington rent
DC Metro rent
1-person household (1 bedroom)
$1,936
$1,328
2-person household (2 bedrooms)
$2,213
$1,506
4-person household (2 to 3 bedrooms)
$2,497
$1,724
Source: Arlington County DCPHD; HUD.
Household Incomes
Arlington County
Household
Size
Area Median
Income (AMI)
40% AMI
60% AMI
80% AMI
Poverty
Threshold
1-person
$58,438
$23,375
$35,063
$46,750
$11,490
2-person
$66,750
$26,700
$40,050
$53,400
$15,510
4-person
$107,300
$42,920
$64,380
$85,840
$23,550
Source: HUD, HHS.
Monthly budget profile: 40%AMI
Market rent values, Arlington County
Budget item
40% AMI (gross)
1 person
2 person
4 person
Senior
$2,507
$2,863
$3,577
$2,507
Rent
1,936
2,213
2,497
1,936
Food
288
422
836
251
Transportation
497
537
1,024
214
Child care
Personal and
household items
0
1,217
2,389
0
438
521
628
333
Health care
157
321
557
416
$3,316
$5,231
$7,931
$3,150
- 809
- 2,368
- 4,354
- 643
Total expenditures
Balance
Monthly balance: 40% AMI
CAF rent values, Arlington County
Budget item
40% AMI (gross)
1 person
2 person
4 person
Senior
$2,507
$2,863
$3,577
$2,507
Rent
806
968
1,118
806
Food
288
422
836
251
Transportation
497
537
1,024
214
Child care
Personal and
household items
0
1,217
2,389
0
438
521
628
333
Health care
157
321
557
416
$2,186
$3,986
$6,552
$2,020
321
-1,123
-2,975
487
Total expenditures
Balance
Monthly balance: 40% AMI
Market v. CAF, Arlington County
Income
$2,507
Balance with market
rents
$- 809
Balance with CAF
rents
$321
-1,123
$2,863
- 2,368
$3,577
- 4,354
-2,975
$2,507
$- 643
$487
Monthly budget profile: 60% AMI
Market rent values, Arlington County
Budget item
60% AMI (gross)
1 person
2 person
4 person
Senior
$3,760
$4,295
$5,365
$3,760
Rent
1,936
2,213
2,497
1,936
Food
288
422
836
251
Transportation
497
537
1,024
214
Child care
Personal and
household items
0
1,217
2,389
0
438
521
628
333
Health care
157
321
557
416
$3,316
$5,231
$7,931
$3,150
444
- 936
- 2,566
610
Total expenditures
Balance
Monthly balance: 60% AMI
CAF rent values, Arlington County
Budget item
60% AMI (gross)
1 person
2 person
4 person
Senior
$3,760
$4,295
$5,365
$3,760
Rent
1,209
1,452
1,564
1,209
Food
288
422
836
251
Transportation
497
537
1,024
214
Child care
Personal and
household items
0
1,217
2,389
0
438
521
628
333
Health care
157
321
557
416
$2,589
$4,470
$6,998
$2,423
1,171
-175
-1,633
1,337
Total expenditures
Balance
Monthly balance: 60% AMI
Market v. CAF, Arlington County
Income
Balance with market
rents
$3,760
444
$4,295
- 936
$5,365
$3,760
- 2,566
610
Balance with CAF
rents
1,171
-175
-1,633
1,337
Monthly budget profile: 80%AMI
Market rent values, Arlington County
Budget item
80% AMI (gross)
1 person
2 person
4 person
Senior
$5,013
$5,727
$7,153
$5,013
Rent
1,936
2,213
2,497
1,936
Food
288
422
836
251
Transportation
497
537
1,024
214
Child care
Personal and
household items
0
1,217
2,389
0
438
521
628
333
Health care
157
321
557
416
$3,316
$5,231
$7,931
$3,150
1,697
496
-778
1,863
Total expenditures
Balance
Monthly balance: 80% AMI
CAF rent values, Arlington County
Budget item
80% AMI (gross)
1 person
2 person
4 person
senior
$5,013
$5,727
$7,153
$5,013
Rent
1,613
1,936
2,086
1,613
Food
288
422
836
251
Transportation
Child care
Personal and
household items
497
0
537
1,217
1,024
2,389
214
0
438
521
628
333
Health care
157
321
557
416
$2,993
$4,954
$7,520
$2,827
2,020
773
-367
2,186
Total expenditures
Balance
Monthly balance: 80% AMI
Market v. CAF, Arlington County
Income
$5,013
$5,727
$7,153
$5,013
Expenditures with
market rents
$1,697
Balance with CAF rents
2,020
496
773
-778
-367
1,863
2,186
Budget Profile Comparison
Arlington County and U.S.
• Rent is the major cost pressure in the basic budget of singles
and families nationwide.
• Rent in Arlington County is much higher than the national
average.
– One-person household’s rent in Arlington is nearly twice
as high as the national average;
– Four-person household’s rent in Arlington is over twice
as high as the national average.
• Child care is the second highest financial burden for families
nationally, but it is exceptionally high in Arlington.
– Child care cost for a four-person household in Arlington
is over twice as high as the national average.
Budget Profile Comparison
Arlington County and U.S.
One-person Family Basic Budget Profile
1,800
1,600
Dollars
1,400
Arlington
County
1,200
1,000
U.S. Average
800
600
400
200
0
Rent
Food
Transportation
Personal and
household items
Health care
Budget Profile Comparison
Arlington County and U.S.
Four-person Family Basic Budget Profile
3,000
2,500
Dollars
Arlington County
2,000
U.S. Average
1,500
1,000
500
0
Rent
Food
Transportation
Child care
Personal and
household
items
Health care
Conclusion
• Rent is a major—though not the only—cost pressure. It
is the one where the County can make the most
difference.
• Better data are needed about the number and
composition of households below 40% of AMI, and
especially larger families.
• It is important to understand how household get by
when expenses exceed incomes.
• Continous research is necessary to investigate and asses
options for assisting families below under median income
in securing a modest standard of living in Arlington
County.