It’s no secret that Boston is an expensive city in which to live. You may have heard that people should spend no more than 30% of their income on housing though this reference point is widely acknowledged to be decades out of date.
The new budgeting guidelines popularized by Sen. Elizabeth Warren in her book All Your Worth: The Ultimate Lifetime Money Plan include the 50/30/20 rule. 50% of one’s after-tax income on needs (housing, food, car payments, utilities); 30% on “wants” the non-essential items like entertainment, eating out, movies, streaming services. The last 20% goes to savings, that cushion for unplanned emergencies, retirement. (Even for disciplined savers, a crisis like the global pandemic threw all plans into disarray and consumed savings for many.)
The bind for the vast majority is that the highest earning potential locations are also the locations with the highest cost of living, like Boston. It’s one thing to share an apartment with roommates and split rent, quite a different matter if you’re a family of four with one parent working outside the home and one working at home, caring for the children. Perhaps a grandparent or two also shares the home as is common in Asian families.
Pew Research on Income inequality showed from 1970 to 2016, the gains in income for lower-income Asians trailed well behind the gains for their counterparts in other groups. This contradicts the common misconception that all Asians are wealthy. In fact, immigration of foreign-born Asians means 78% of Asians are foreign-born. Lower earning capacity, lower educational attainment create a demographic which runs counter to the “Crazy, Rich” profile in popular media.
Across Massachusetts, 30% of households are at “extremely low income”. ELI is defined as below the poverty guidelines or 30% of the area median income. According to the National Low Income Housing Coalition:
- 40% of the category of (ELI) are seniors
- 25% are in the labor force
- 20% are disabled
- 60% of ELI also have severe cost burdens resulting in sacrificing necessities to pay for housing
One of the ways this housing burden can be eased is public housing, subsidized, or affordable housing. One might think: problem solved! Consider that Massachusetts Section 8 subsidized housing voucher program officials receive over 10,000 applications for housing assistance annually and report a waitlist of one to five years. This program serves renters, and three of the largest communities in Massachusetts, Boston, Worcester and Springfield, have comparatively larger ELI renter communities.
Assuming you want to apply for one or another program, and get on that years-long waiting list, what are the rules for eligibility? For 2021, the poverty guidelines for a family of four in the 48 contiguous United States is $26,500.
For Massachusetts 2019 median household income: $81,215. Yet, the estimated “living wage” needed to live in Suffolk County for a family of four, one parent working is estimated at $79,078. For programs with a poverty guideline threshold of eligibility, this family would be $54,715 over the threshold for housing assistance.
The bottom line is that many families are struggling just to break even, with little or no assistance available to them, they live in danger of one unexpected expense dragging them down to subsistence at the margins. The just-released Greater Boston Housing Report Card notes that some of the emergency government assistance efforts born of this pandemic provide some solutions that may help to address the housing inequalities in the Greater Boston area.
“The pandemic has required unprecedented efforts to stabilize the economy and keep people in their homes,” said Calandra Clark, Director of Policy at the Massachusetts Housing Partnership. “But in making those efforts, we have gotten a valuable opportunity to implement policies that could help guide us forward. If we are willing to continue these investments, the long-term payoff could be life-changing for thousands of Greater Boston residents and significant for our local economy.”
