By Shereen Siewert | Wausau Pilot & Review
Elizabeth Bellow can’t afford to take a job in Wausau, because she can’t afford the rent.
Bellow, a single mother of two who just completed a long-sought degree in communications, said she was excited to accept a job at a local company in her field. The salary, at roughly $18 per hour, was less than she’d hoped. But it was a starting point and a chance to start a new and better life for her family.
Her hopes faded when she began an apartment search and realized she was better off staying in Madison, where she pays $635 a month for her cozy two-bedroom duplex. Her landlord, who lives next door, hasn’t raised the rent once in the six years she’s been there, and her mother, who lives in Middleton, can help with child care when the kids aren’t in school.
“I guess I had a sense that what I was paying for rent in Madison was normal,” Bellow said. “Boy, was I wrong.”
Increasingly, experts say, if the U.S. is going to get inflation under control, it will have to grapple with the No. 1 contributor to the January inflation increase: the cost of shelter. In Wausau, rents have continued their upward climb, increasing over the past month by anywhere from 13 to 20 percent, depending on unit size. The average rent for a 2-bedroom apartment in Wausau is now $1,200, according to according to data from Zumper, a rental marketplace website.
Many factors are driving the rent surge including a short supply of housing inventory.
Marathon County Administrator Lance Leonhard in July said counties statewide are having conversations about role of the local government in housing and working to find solutions.
“There is shortage of housing at all levels,” he said.
According to the National Low Income Housing Coalition’s GAP report, the U.S. “has a shortage of 7 million rental homes affordable and available to extremely low-income renters, whose household incomes are at or below the poverty guideline or 30% of their area median income.” To put those numbers in perspective, the NLIHC said “only 36 affordable and available rental homes exist for every 100 extremely low-income renter households.”
In Wausau and across Wisconsin, there is a striking shortage of rental homes affordable and available to extremely low income households. Many of these households are severely cost burdened, spending more than half of their income on housing. Severely cost burdened poor households are more likely than other renters to sacrifice other necessities like healthy food and healthcare to pay the rent, and to experience unstable housing situations like evictions, according to the National Low Income Housing Coalition.
Wisconsin statistics
It’s not difficult to connect the dots from affordable housing shortages to the sharp decline in enrollment at the Wausau School District.
Wausau has put significant tax dollars toward high-end developments that are well out of reach for working families like Bellow’s, and leaders from area schools, businesses and the Greater Wausau Chamber of Commerce have come out in full support of those efforts. Curiously, much-needed affordable housing projects discussed in recent years have not seen such support, even from Wausau School District leaders, despite data that shows how desperately Wausau needs them.
While fixing the housing shortage isn’t simple, it’s tied tightly to inflation.
Rent accounts for about 32% of the Consumer Price Index equation but rent increases represented more than half of the inflation rate in January. In other words, rent costs outweigh other rising costs, said Poynter’ Senior Faculty Member’s Al Tompkins. “Given how much of your income goes to rent, overall inflation rates will remain high unless we get rent prices under control. The trend is steadily up.”
Complicating matters is a sharp increase in household debt including credit card debt and auto loans. A new Nerdwallet survey says, “The average U.S. household owed about $222,000 in mortgages, $17,000 in credit card debt as well as $29,000 in auto loans last year.”
Jeff Adler, vice president of Yardi Matrix, told U.S. News & World Report that the housing shortage is preventable and manmade. It can also be unmade, he said.
“They set public policy choices that have resulted in a shortage of housing … and there is not yet, truly, a public policy consensus at the local level, which is really where the rubber meets the road, to enable bigger levels of housing supply,” Adler said.
