Colorado ranked 9th in U.S. for gap between renters’ income and housing cost

COVID-spurred economic crisis exacerbates ‘Out of Reach’ rents highlighted in new study

A rental unit in the Washington Park neighborhood in Denver on July 14, 2020. (Moe Clark/Colorado Newsline)

Workers earning minimum wage in Colorado — many of whom have served as essential workers during the coronavirus pandemic — need to work a total of 71 hours per week to afford a fair market, one-bedroom rental home, according to a national study published on Tuesday by the National Low Income Housing Coalition, a research and advocacy organization.

The nonprofit’s annual “Out of Reach” report ranks Colorado No. 9 in the country for having the largest gap between renter’s income and housing cost — an issue being exacerbated by the economic crisis that followed the coronavirus pandemic.

“People were living paycheck to paycheck before the pandemic,” said Alison George, director of Colorado’s Division of Housing in the Department of Local Affairs. “But now, many of those same folks that were in that situation are being even more impacted by the economy as things have shut down.”

Study finds affordable housing out of reach for many

In Colorado, a renter must earn $26.45 per hour or work at least 88 hours per week at minimum wage to afford a market rate two-bedroom apartment at $1,375 a month, according to the study. That means for the housing to be considered affordable the renter or renters must earn $4,585 monthly, or $55,016 annually.

A U.S. map showing the hourly wage an individual would need to to afford a two-bedroom fair market rate apartment in each state. (Provided by the National Low Income Housing Coalition)

In the Denver-metro area, the fair market rent for a two-bedroom unit is $1,566, according to the U.S. Department of Housing and Urban Development. In Boulder, the price is $1,717. And in Pueblo, a two-bedroom apartment is $838. Affordable housing is defined as a unit that requires less than 30% of the household income, according to the U.S. Department of Housing and Urban Development.

In 2018, there were approximately 165,567 households considered extremely low-income renters in Colorado, according to the NLIHC. There were only 50,627 affordable and available rental homes for individuals and families in the extremely low-income category.

George said that more families and individuals will inevitably end up in this category due to the coronavirus pandemic. Her focus has been on providing emergency rental and mortgage assistance for Coloradans during the pandemic.

Approximately $30 million has been earmarked by the state Legislature and through executive action from Gov. Jared Polis to help with rental and mortgage assistance, according to George. The funds are set to expire on Dec. 30 — if they last that long.

“There has been a lot of support through unemployment and through the economic stimulus funds that have supported a lot of folks and helped them pay their rent,” said George, referring to the coronavirus federal stimulus payments. “And so, as those supports run out we fully expect that these programs will be tapped as the next source to help keep people in their housing.”

Housing advocates worry executive action delays the inevitable

As of July 4, Colorado has seen a total of 617,481 total unemployment benefit claims since the coronavirus began, totaling over $3 billion. And though new claims have started to slow overall, thousands of Coloradans are still relying on unemployment benefits to stay afloat during the coronavirus pandemic. On July 25, a federal program that added an extra $600 to state unemployment benefits is set to expire .

A for rent sign outside of a small housing complex in Denver on July 14, 2020. (Moe Clark/Colorado Newsline)

As Coloradans deal with wage decreases, due to layoffs, furloughs or decreased work hours in response to the coronavirus pandemic, housing advocates worry that the state may see a record number of renters unable to pay their rent and facing eviction.

On Sunday, Gov. Jared Polis extended an executive order requiring Colorado landlords to give tenants a 30-day warning before initiating eviction proceedings for nonpayment of rent. Prior to the executive order, Colorado law required landlords to give tenants 10 days notice before eviction. But housing advocates stress that the executive action just delays the inevitable.

“People are very fearful of what is going to happen in terms of housing because we were in such a crisis pre-pandemic,” said Kayla Frawley, policy and advocacy manager for the Raise Colorado Coalition — a joint effort of the Clayton Early Learning Center and the Colorado’s Children Campaign — which focuses on how state policy impacts families.

Racial disparities highlighted

The NLIHC study — which used U.S. Census Bureau data and other governmental data sets — highlighted how lack of affordable housing disproportionately impacts people of color. The report states that 44% of Black households and 42% of Latino households spend more than 30% of their incomes on housing, compared to 26% of white households.

Due to longstanding income inequality along racial lines in the U.S. — a product of ongoing discrimination, unequal job opportunities and systemic racism — Black and Latino households make up a disproportionate amount of the rental market. In 2018, 27% of U.S. renters were white, compared with 55% of Latino households and 59% of Black households, according to the U.S. Census Bureau.

“We know that evictions and housing issues are going to continue to impact the populations that have historically been the most impacted,” Frawley said. “And that’s just systemic racism in action.”