According to a Center for Housing Policy report based on first quarter of 2013 data there is an unaffordability gap between wages and housing costs for both rents and mortgages for workers in occupations central to summer vacation related services.
Findings show the much-talked-about housing and economic recovery is not yet a reality for millions of low-paid American workers.
“Incomes are not rebounding in step with local housing markets,” says CHP senior research associate Maya Brennan, co-author of the report. “Even in a strong sector like travel and tourism, wages have not kept pace with the rising costs of renting or homeownership.”
“Paycheck to Paycheck 2013: A Snapshot of Metropolitan Housing Affordability for Travel and Tourism Workers” focuses on housing affordability trends among mid-career workers in five jobs crucial to travel and tourism: housekeepers, wait staff, auto mechanics, front desk managers and flight attendants.
It shows only flight attendants have an average wage high enough to afford the mortgage on a median-priced home in the U.S., while housekeepers and wait staff “cannot afford the typical rent on either a one- or two-bedroom apartment” in any of the 207 metro areas studied.
In a substantial portion of the U.S., buying a typical home is unaffordable for four out of five travel workers studied.
In nearly 40% of 207 metro areas studied, front desk managers and auto mechanics could not afford the monthly mortgage payments for a median-priced home.
Americans are spending more on vacations, notes CHP research associate and co-author Janet Viveiros, while many of “the workers fixing their cars before a long road trip, cleaning their hotel rooms or serving their meals” struggle with basic housing expenses.
Homeownership is more affordable than renting for those who have enough savings for a downpayment and qualify for a mortgage. In the first quarter a housekeeper could afford the mortgage on a median-priced home in only eight of the 207 metros surveyed, and up to ten metros for wait staff worker.
Differences in home price recovery, however, affect these patterns. In the 25 most expensive markets covered such as New York, Boston, Los Angeles and San Francisco that also are popular vacation destinations, “even relatively high-earning flight attendants could not afford to own a median-priced home.”
CHP director and National Housing Conference VP of research Lisa Sturtevant argues that while the recovery is a relief to those who already own property and “saw the values of their homes plummet during the downturn,” but rising prices and rents also mean “many working individuals and families struggle to find affordable housing in their communities.”
She warns that since the turnaround in housing prices in many markets is driven by investors while credit is tight pushing low-income households to rent, also puts upward pressure on rents while wages have been steady at best. That dynamic also “is pricing out of many markets many working families.”
Sturtevant reiterates that this “fundamental tension between a housing recovery and housing affordability” indicates the best solutions are “higher wages or greater access to affordable housing.”