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Economy: Rental Housing Indicator Rental costs in DuPage County were well above state averages in 2002.
ABOUT THE INDICATOR Like the cost of buying a home, the cost of rental housing is important to the economy because of the need to house the labor force. According to the U. S. Census Bureau’s American Community Survey, in 2002, 82,000 units, or 24 percent of the total occupied housing units in DuPage County, were renter-occupied. Typically, those who rent are lower wage earners, residents who are new to the area and choose to rent until they find an affordable home, households headed by younger individuals who cannot yet afford a home, and older residents with less need for space. The first chart shows average rental costs by unit size for DuPage County and Illinois. The second chart shows the average hourly wage required (based on a 40 hour work week) to afford rental housing in DuPage County and Illinois. OBSERVATIONS DuPage County is a relatively expensive place to live, regardless of whether housing is owned or rented. In 2002, average rental costs in DuPage County were higher than those for the state of Illinois for all unit sizes. Higher rental costs mean that workers must earn higher wages to comfortably afford the units they are renting. The hourly wage required to afford a two-bedroom unit in DuPage County, for instance, at $20.56, is about $5 more than the hourly wage required to afford a two-bedroom rental in the state overall. While incomes in DuPage County tend to be higher, suggesting that renters can in fact afford the higher costs, this is not always the case. Optimal affordable living ratios require that total housing costs equate to less than 30 percent of annual gross pay. In 2002, for 43 percent of renters in DuPage County, housing costs exceeded this level, according to Census Bureau data. High rental housing costs are a particular burden for the lowest-paid workers. To afford even a studio apartment in DuPage County, an hourly wage of $14.38 is required, which is more than double the current minimum wage of $5.50 per hour. TAPESTRY Rental costs in a region reflect the status of the region’s economy. When earnings are relatively high, and housing is in demand, rental costs will rise accordingly. The assumption is that when people earn more, they can afford to pay more for housing. However, in the case of renters who hope one day to be able to buy a home, paying higher rental costs limits their ability to save for permanent housing. High rental costs also result in individuals having less income to purchase other essentials such as food and medications as well impacts the amount of discretionary income available for entertainment and leisure activities. Those at lower income levels may not even be able to afford needed items like health insurance or cars, and may be vulnerable to social ills such as homelessness and child poverty. If the high costs of renting lead residents to move frequently as they search for better deals and lower rents, community stability will be reduced. That, in turn, can affect the educational system. Frequent moves that result in children having to transfer from school to school are disruptive to a child’s education. In addition, schools and teachers will be constantly adjusting to the needs of new children entering their classrooms. HOW TO GET INVOLVED OR LEARN MORE If you have an interest in getting involved, please feel free to contact:
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