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Wednesday, November 30, 2022
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HUD Driving Up Rent Prices in Dallas

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White house with euro cash as real estate investment concept. Property values in Europe. Arrow pointing up. | Image by SERSOLL, Shutterstock

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A new study by United Way of the National Capital Area revealed that workers making minimum wage need to work over 50 hours a week in many U.S. cities to afford the rent for a one-bedroom home.

United Way calculated the hours a worker would presumably need to work to afford rent in 50 of the largest U.S. cities while being paid that city’s minimum wage. The organization used data from the left-leaning nonprofit National Low Income Housing Coalition (NLIHC).

Only Tucson, Arizona, and Buffalo, New York, allow for a minimum wage worker to work fewer than 50 hours a week to afford a one-bedroom, according to the study.

In Dallas, minimum wage workers would have to work 120 hours per week to make rent. The minimum wage in Texas is $7.25 an hour.

In the top 10 populated cities in the country, Phoenix reportedly had the best affordability ratio. A minimum wage worker there paid $12.80 per hour would only have to work 65 hours a week to pay rent, which, granted, is still well above a 40-hour-a-week full-time job.

Austin workers would have to work even more, at 129 hours per week, 18 hours more than New York City.

According to NLIHC president and CEO Diane Yentel, renters’ housing options are being limited by rising rents and a shortage in “affordable” housing.

“Last year, the cost of rent rose an unprecedented 14% nationally, with some cities seeing rent increases as high as 40%,” she told NBC 5.

NLIHC claimed that fewer than four homes register as both “affordable” and available for every 10 low-income households, resulting in low-income renters spending half their income on rent alone.

While it is unclear how much inflation and an end to direct COVID-19 relief are playing into the country’s “affordable” housing situation, some point to the U.S. Department of Housing and Urban Development (HUD) as partly responsible for rising housing prices.

Scott Beck, CEO of Beck Ventures, previously explained to The Dallas Express that any developer receiving federal taxpayer money from HUD is required to satisfy “affordable” housing requirements, which typically involve building into their projects a certain amount of “affordable” on-site units for low-income renters.

However, the cost of building low-income housing is usually more than the units are likely to generate in rent, dissuading developers from building them in the first place and effectively contributing to the housing shortage.

Additionally, if developers build “affordable” housing, according to Beck, they would need to raise the rent on their other properties to make up for the revenue loss, again driving prices upward.

Speaking about Dallas specifically, Beck said, “Local developers whose projects aren’t budgeted to handle the costs required to build affordable housing units are taking their projects elsewhere.”

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