Who Is the Low Income Housing Serving?

There are some in Greater Des Moines who simply don’t believe there is an affordable housing problem in our community.  Much has been made of the new units that are being built like those in the East Village – units that are being built with the assistance of federal funds that require a certain number of units be set aside for low income families.

But all is not what it seems.  In early October, the National Journal ran a story about “The People Who Can’t Take Advantage of the Housing Boom.”  The focus of the story was about the new low income units that had been built in the East Village and makes an astute point.

“We're standing in a trendy one-bedroom apartment with polished concrete floors, modern appliances, and floor-to-ceiling windows looking out over downtown. The surrounding neighborhood is dotted with brick-façade factories that are being converted into high-end apartment buildings, bustling side streets that lead to restaurants like Zombie Burger and Tacopocalypse, and stores that sell rustic home decor and graphic T-shirts that unapologetically proclaim Des Moines "the greatest city in the world."

And how much does this urban dream abode cost?

"If you make less than $41,000 a year, this one-bedroom right here is $780 a month," says Tim Rypma, the 34-year-old owner of this new apartment building with 20 units in the heart of the East Village neighborhood in downtown Des Moines.

That's $780, for an apartment that could run two, three, maybe four times that in other cities across the country. Some new apartment buildings going up in Des Moines that receive federal funding must reserve half of its units for lower-income tenants. It's rent control for young couples or a twentysomething looking for affordable living fresh out of college. But those aren't necessarily the residents most in need of cheap housing in the region.”

But those aren't necessarily the residents most in need of cheap housing in the region. Our clients know this all too well.

Our market is doing well for low income families – those at 80% area mean income.  Yet, they are part of the problem. These households aren’t moving into homeownership like they have in the past because they are able to access the necessary credit. This is adding to the burden for very low and extremely low income households.  Even without this development, affordable housing for the extremely low and very low households is an uphill battle.  

Consider the numbers*:

  • An extremely low income family is at or below 30 percent of area mean income.  This is one person at $15,300, two people at $17,500, four people at $21,850 or five or more people at $30,600.
  • There are 13,786 extremely low income households in Des Moines and only 6,224 units.
  • Almost half of those units are occupied by households with a higher income.
  • The average extremely low income household spends $626 in monthly rent or 67% of their income.  
  • 87% of extremely low income households are rent burdened. Of those, 74% are severely rent burdened.

So what does this mean?  It is an uphill battle for families who are trying to create a stable household. Even if a household is “doing things right” or seeking the help necessary to create stability, the chances of them finding a unit to fit their needs is bleak at best.  

It’s not a pretty story, but one that needs to be told to better understand the challenges and opportunities that we have as a community that wants to assist our most vulnerable families.  Throughout the next several weeks, we’ll be blogging about the rental crisis and how HOME, Inc. as well as other housing organizations in Des Moines are fighting to make sure there are more opportunities than challenges.  

* Statistics from the Polk County Housing Trust Fund Website

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