A new assessment of the Louisiana housing market found that nearly 45 percent of renters in the state are considered “rent stressed” because they are paying more than 35 percent of their monthly income in rent.
The national average is lower at close to 43 percent who are rent stressed.
But Jim Richardson and Roy Heidelberg, the LSU professors who did the study for the Louisiana Housing Corp., cautioned that the report doesn’t look at the household incomes of people who are rent stressed. Affluent people who live in upscale apartments could fall in the category of being “rent stressed.”
“We want to be very cautious in the interpretation,” said Heidelberg, an assistant professor in the Public Administration Institute at LSU. “That doesn’t necessarily mean unaffordable housing.” After all, a household with an annual income of $150,000 a year could be paying $60,000 in rent, but still have $90,000 left over.
However, the report noted that the percentage of Louisiana residents who are rent stressed has gone up by almost 15 percentage points since 2000.
And Louisiana homeowners who have mortgages are less cost-stressed than the rest of the country. Twenty-two percent of homeowners in the state with a mortgage are spending more than 35 percent of their monthly income on a house, compared to 26 percent of U.S. residents.
While Heidelberg said the vast majority of households that are rent stressed would be low income, there is not a high correlation between rent stress and people living in poverty, with low median household incomes or other metrics of affordability.
“This is intended to help better enable you to frame problems and ask questions, rather than a document to help you find solutions,” he told members of the LHC board of directors Wednesday. The LHC administers state and federal funds to develop affordable housing for low- and moderate-income households.
One of the things that Heidelberg and Richardson said should be looked at is potential displacement in areas such as Baton Rouge and Lake Charles, which are projected to see dramatic job growth because of industrial construction in the pipeline. After all, the most unaffordable place to rent a home isn’t New York or San Francisco, it’s the oil boom town of Williston, North Dakota, where a 700-square-foot, one-bedroom apartment rents for nearly $2,400 a month.
“There will be pressure on rents, there will be pressure on facilities,” said Richardson, a professor in the Public Administration Institute. “You’ve got to look at what’s going on down the pike.”
Richardson said the housing market reports will help the LHC make better decisions about where to concentrate its resources on providing affordable housing.
This was the first housing needs assessment report that has been done since 2010, said Frederick Tombar III, executive director of the LHC. Tombar said those numbers were heavily impacted by the ongoing recovery from hurricanes Katrina and Rita and the damage caused by hurricanes Gustav and Ike.
Tombar said the goal is to make the housing needs assessment an ongoing study to keep up with the changes happening in Louisiana’s housing market.
“We intend for it to be a living, breathing organic document,” Tombar said. “We’re going to work to make our investments in line with the specific needs pointed out in the study.”
To view the full report, go to www.lhc.la.gov/downloads/HousingNeedsAssessment/HousingNeedsAssessment.pdf.
Follow Timothy Boone on Twitter @TCB_TheAdvocate.