Housing Costs Help Keep Some in Poverty

For many Americans, the cost of housing is a daunting issue. That is especially true for low-income people. In many cities, high housing costs are a major factor in keeping people below the poverty line. New research suggests the problem is worse than statistics indicate.

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For low-income Americans the monthly budget struggle often boils down to how to pay rent and other necessities, like food and healthcare. In some big cities, housing costs are the main reason why people can't make ends meet. New research suggests that if housing costs were factored in, the poverty line would be adjusted dramatically. NPR's Rachel Jones reports.

RACHEL JONES reporting:

Deborah Reed is an economist at The Public Policy Institute of California, a San Francisco think tank. She says the federal government calculates its official poverty threshold based on how much it costs to buy food. By that measure, Mississippi, Arkansas, New Mexico and Louisiana have the highest poverty rate; or, put differently, if a family of four, anywhere in the U.S., makes under $19,000 a year, they're considered poor, whether it's in Los Angeles or Terra Haute.

Ms. DEBORAH REED (Economist, The Public Policy Institute of California): And we said, wait a minute. A family of four renting a two-bedroom apartment in New Orleans might pay $8,000 a year for rent; a family of four renting a two-bedroom apartment in San Francisco might pay as much as $21,000.

JONES: So Reed and her colleagues calculated the housing costs for all the counties in the U.S., then they adjusted the poverty rate for the differences in those costs. Reed says that when you do that, the picture changes.

Ms. REED: In our analysis, the top poverty place is the District of Columbia, followed by New York City, followed by California.

JONES: That's all of California. Reed says, across America, the face of poverty is increasingly urban. But in high-cost cities, like New York, even people with full-time jobs can't cover all the bases, people like James Suther(ph).

Mr. JAMES SUTHER: How much do I make? I make $500 a week, but that ain't enough to keep food in my refrigerator. Plus rent, I pay $920 in rent a month.

JONES: Suther stops by the Church of the Holy Apostle's soup kitchen each day during his lunch break. Like Suther, many of the people here have jobs. Most are black and Hispanic and male.

JONES: So what do you have today?

Mr. SUTHER: Now, what is that? It looks like spaghetti and hamburger with brussel sprouts and beets and pineapple and cold tea.

JONES: It's the only full meal Suther will have today. He's 49, and he's been a bike messenger for 12 years. He starts riding his bike from his two-bedroom Bronx apartment at 4:30 each morning to get to work by 7:00.

Mr. SUTHER: That's the only way you can get paid in New York.

JONES: The rent is one thing to worry about. Another is healthcare. Recently, Suther fell off his bike and injured one of his legs. While he was recovering, he made a hard decision: he applied for food stamps for the first time ever.

Mr. SUTHER: I'm waiting for them to mail me a letter letting me know if they're going to give me food stamps or not. Other than that, I don't know.

JONES: And how much would you receive?

Mr. SUTHER: Anywhere from $278 or less.

JONES: Other researchers say that if people like Suther get food stamps or other government aid, it could offset the cost of rent, a fact the new report doesn't consider. Douglas Besharov is a resident scholar at the American Enterprise Institute, a conservative think tank in Washington. He likes the new report, but says it could have that one step further.

Mr. DOUGLAS BESHAROV (Resident Scholar, American Enterprise Institute): The thing I wish this report did is to also take into account the difference in government aid in these different localities, which does tend to reflect the difference in the cost of living.

JONES: Besharov says that would yield a more thorough definition of poverty, no matter where you are in the country.

Rachel Jones, NPR News.

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