I recently ran across a study that compared median rent to median income in different US cities. Because of the study methodology, only one Michigan city (Detroit) made the list. Detroit had both low median income and rent, so the study classified it as affordable. The study authors defined affordability as spending no more than 30% of one’s income on rent. (That’s a widely accepted definition in financial circles.)
If you run the same numbers for Washtenaw County, you begin to see why rents are such a hot-button topic. Additionally, the ratio of median rent to median income explains the difficulty schools like Washtenaw Community College and Eastern Michigan University have in retaining their students.
For example, the median income in Ann Arbor in 2020 was $33,600. A person making the median income could afford a one-bedroom apartment with a rent of $839. Except, of course, the median rent for a one-bedroom apartment in the Ann Arbor MSA (which includes all of Washtenaw County) in 2020 was $1,007. That’s an “affordability gap” of 20% or more than $2,000 per year. The affordability gap for Ann Arbor inverts only when you consider median household income, which is income from all earners in a household. So, Ann Arbor is potentially “affordable” only when a household has multiple earners.
If you look at the problem the other way, an individual earner would have had to gross more than $40,000 per year to have been able to afford to live in Ann Arbor in 2020. I say that all in past tense because, as you know, things change. Currently, the median rent in the Ann Arbor MSA for a one-bedroom apartment is $1,244. That means Washtenaw County is affordable only to those individuals making about $50,000 per year.
Median income is unequal throughout Washtenaw County
Unfortunately, while the rent data includes all of Washtenaw County, the income data is not. The median income in Ypsilanti in 2020, for example, was $23,202. Someone living in Ypsilanti would be able to afford a rent of $580 for a one-bedroom apartment. In 2020, the median rent for a one-bedroom apartment in Washtenaw County was $1,007. That’s an affordability gap of 74% for median income versus median rent.
Don’t be too quick to attribute the jump in rents to inflation because the jump you’re talking about is 23.5%. Inflation’s been high lately, but it hasn’t been that high. Inflation alone would have accounted for an increase of only 14.5%. You can attribute the rest to increased demand, limited supply, “greedflation” or whatever else you like. It is fundamentally more expensive to live in Washtenaw County today than it was three years ago, and inflation alone does not account for the increase in the cost of living somewhere.
We cannot continue to live in a county where the median cost to live here significantly exceeds the median income of the residents. We currently live in a county where wealth concentrates heavily only in tightly controlled areas and restricts upward mobility in the remainder.
The cost of living in County No. 81 is the primary reason WCC simply must do a better job of preparing people who live outside of the highest income islands for high-wage, high demand jobs. If the current administration at WCC is unprepared to make that happen, it is time for a change.
Photo Credit: Mike Linksvayer , via Flickr
