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Report highlights Washtenaw County housing costs

A new report by the National Low Income Housing Coalition uses US Census Bureau data to calculate the wages required to rent a “modest” two-bedroom apartment in certain ZIP codes around the nation. The report includes many – but not all – ZIP codes in Washtenaw County. Not surprisingly, Washtenaw County is an expensive place to live!

The table below shows the available ZIP code data, the locality, the hourly wage required to rent a 1-bedroom or 2-bedroom apartment, the annual salary required to rent 1- or 2-bedroom units, and the fair market rents (FMR) for 1- and 2-bedroom rentals. One note: the term fair market rent is the Department of Housing and Urban Development’s best estimate of what a renter seeking a “modest” rental in the near term can expect to pay for rent and utilities in the current market. It does not reflect the actual state of the rental market in a particular area.

ZIP Code Location Hourly 1-bd /2-bd Annual 1 br/2br FMR 1-br/2-br
48103 Ann Arbor $29.42/$35.00 $61,193.60/$72,800.00 $1,530.00/$1,820.00
48104 Ann Arbor $28.85/$34.42 $60,008.00/$71,593.60 $1,500.00/$1,790.00
48105 Ann Arbor $28.27/$33.65 $58,801.60/$69,992.00 $1,470.00/$1,750.00
48108 Ann Arbor $22.31/$26.54 $46,404.80/$55,203.20 $1,160.00/$1,380.00
48109 Ann Arbor $28.65/$34.04 $59,592.00/$70,803.20 $1,490.00/$1,770.00
48118 Chelsea $26.73/$31.92 $55,598.40/$66,393.60 $1,390.00/$1,660.00
48130 Dexter $24.42 /$29.04 $50,793.60/$60,403.20 $1,270.00/$1,510.00
48137 Gregory $27.69/$32.88 $57,595.20/$68,390.40 $1,140.00/$1,710.00
48158 Manchester $20.00 /$24.04 $41,600.00/$50,003.20 $1,040.00/$1,250.00
48160 Milan $20.00/$24.62 $41,600.00/$51,209.60 $1,040.00/$1,280.00
48176 Saline $20.00/$24.04 $41,600.00/$50,003.20 $1,040.00/$1,250.00
48178 South Lyon $21.54/$26.73 $44,803.20/$55,598.40 $1,120.00/$1,390.00
48189 Whitmore Lake $20.96/$24.81 $43,596.80/$51,604.80 $1,090.00 /$1,290.00
48190 Whittaker $25.19/$30.38 $52,395.20/$63,190.40 $1,310.00/$1,580.00
48191 Willis $29.42/$35.19 $61,193.60/$73,195.20 $1,530.00/$1,830.00
48197 Ypsilanti $21.15/$25.19 $43,992.00/$52,395.20 $1,100.00/$1,310.00
48198 Ypsilanti $20.00/$24.04 $41,600.00/$50,003.20 $1,040.00/$1,250.00

WCC should tune its programs to county’s cost of living

With one exception – 48108, which includes Pittsfield Township – no one rents in Ann Arbor on an annual income of less than $60,000. I should clarify that these figures assume that renters spend no more than 30% of their income on housing and utilities. We know, however, that half of all renters spend more than 30% of their income on rent, and a quarter of all renters spend more than 50% of their income on rent.

So, to be minimally useful to Washtenaw County, Washtenaw Community College must enable its graduates to earn a bare minimum of $42,000 per year. However, just meeting this minimum income floor will do nothing except concentrate the lowest-income households in select areas of the county. That’s what happens in Washtenaw County right now, and it works to the county’s overall detriment.

Minimum viability shouldn’t be the goal for WCC. Instead, WCC should offer a wide range of programs that enable its graduates to live throughout the county and work in a range of economically productive occupations. These salary ranges are what it will take to ensure that people who rent can do so without stretching their budgets to the breaking point.

The study doesn’t address the fact that rental vacancy rates in Washtenaw County (and elsewhere) are held artificially low by the lack of available rental housing. For revenue reasons, most communities have a strong preference to build high-end/luxury rentals instead of the “modest” housing that the National Low Income Housing Coalition contemplates. Building these high-dollar rental properties may increase the tax revenues to the municipality and discourage lower income renters from establishing households there, but it disproportionately concentrates low income households in specific communities and forces them to compete with lower-earning (but not low-income) households for “modest” or “affordable” housing.

Washtenaw County housing costs exceed statewide average

In case you’re wondering how Washtenaw County compares with Michigan as a whole for housing costs, the average rent for a 1 bedroom apartment in Michigan is $956 per month. The average 2-bedroom apartment in Michigan rents for $1,204. In Washtenaw County, the average rent for a 1-bedroom apartment is $1,251, and the average rent for a 2-bedroom unit is $1,519. Respectively, that’s 31% and 26% higher than the statewide averages for 1-bedroom and 2-bedroom rental units.

WCC simply needs to do better in selecting and developing high-wage, high-demand occupational education programs to help our prime-age workforce better cope with Washtenaw County’s economically demanding environment. Doing anything less wastes the tens of millions of dollars that Washtenaw County taxpayers send to WCC each year.

Photo Credit: Daniel Foster, via Flickr