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A couple of reports released by national think tanks and research institutes this week revealed it’s not getting much better for San Diego residents – both homeowners and renters.
This one, released Tuesday by the Center for Responsible Lending, predicted trouble ahead one in five homeowners nationwide who’ve taken out subprime loans. Those mortgages are designed to assist people with less-than-perfect credit attain homeownership. As many as 2.2 million of the borrowers nationwide could face foreclosure, the report says.
San Diego is one of the area’s expected to be hardest hit by subprime mortgage foreclosures, the report says. About 21 percent of the loans are projected to end in foreclosure in the county. That’s an increase of more than 500 percent from the 3 percent foreclosure rate projected for the same type of loan issued from 1998 to 2001.
But staying out of the homeownership arena in favor of renting doesn’t work everyone in the San Diego workforce, a report released yesterday reveals.
The National Low Income Housing Coalition compiled side-by-side rent costs and corresponding required incomes for the states and major metropolitan areas nationwide.
The affordability measure in the report uses a standard of 30 percent – households can afford an apartment if they spend no more than 30 percent of their household income on the rental costs. (2005 data from the Census Bureau revealed that more than half of the county’s renting households spend more than that standard.)
San Diego’s renting households make up 45 percent (443,188) of the county’s total households. Here’s what the coalition found:
A household wishing to rent a one-bedroom apartment ($993 monthly) must earn $39,720 annually. That would require a worker earning minimum wage to work a 113-hour work week. To split up those hours, a household would have to have 2.8 full-time jobs at minimum wage to afford the apartment. For a two-bedroom apartment, a household must have 3.4 minimum wage earners.
Tom Scott, executive director of the San Diego Housing Federation. made this comment in a release about the report yesterday:
“The conundrum here is that incomes are lower in San Diego County and rents are higher than most other parts of the state. … [T]he burdens for San Diego families are especially difficult.”
“Those having SSI or Social Security as their sole source of income have very significant housing affordability challenges,” Scott continued. “For example, someone receiving $836 in SSI can afford $251 in rent. Where do you find that in San Diego?”
The report shows data for other scenarios as well. You can see those by clicking here.