- Associated Press - Sunday, December 21, 2014

CHEYENNE, Wyo. (AP) - A recent study finds that rents in Cheyenne are too steep for many workers to afford.

The study published earlier this month by real-estate research firm Zillow examined how much a person would have to earn to afford rent in more than 15,000 cities around the country without spending more than 30 percent of their annual income.

“There’s a common rule of thumb that says annual housing costs should not exceed 30 percent of one’s annual income,” wrote the report’s author, Cory Hopkins. “Unfortunately for single renters making the federal minimum wage of $7.25 per hour, it’s virtually impossible to find a property in the U.S. that won’t end up costing them significantly more than this commonly accepted threshold.”

The Wyoming Tribune-Eagle reports (https://bit.ly/13rVm3u ) that the study found a single working full time would have to make just over $26 an hour in Laramie County to be able to afford rent without spending more than 30 percent of their income. For two-income households, both earners would have to average at least $13.08 an hour.

San Francisco ranked among the most expensive cities to live, with a single earner having to pull nearly $60 an hour to afford the median rental there. Not far from there, San Jose-Sunnyvale-Santa Clara topped the list, with a required minimum wage of $63.26.

Cheaper rents can generally be found in the country’s interior. Springfield, Missouri, for example, required single earners to make just $16.16 an hour, while residents of Youngstown, Ohio, can make do on $15.52 an hour.

Wenlin Liu, principal economist with the Wyoming Economic Analysis Division, said that scarcity has been a contributing factor to higher rents in Laramie County, though it’s not the only one.

Liu said the collapse of the housing industry in the late 2000s has been a major contributor to rising rents. He said more people have eschewed homeownership, either by choice or because bank lending conditions became too stringent for them.

“After a recession, bank loans get tighter, and the homeownership rate has gone down,” Liu said. “Many people have to rent.”

And as rental properties have filled up, local vacancy rates have plummeted from about 5 percent in 2009 to less than 2 percent today. At the same time, Liu said, those homeowners living in established neighborhoods have generally opposed the construction of apartments nearby, especially those geared toward lower-income families.

“I compared 2000 to 2013, and the rental rates increased a lot faster than rental income,” Liu said. “The median household income for renters increased 41 percent over that period, but the rent increased 81 percent. Affordability is clearly going down, compared to back then, for the renter.”

Barring a sudden increase of new apartment construction, however, Liu said there is some hope for those seeking lower rental prices. He noted that mortgage giants Fannie Mae and Freddie Mac recently announced new lending guidelines that will lower some minimum down payments for low-income and first-time homebuyers to 3 percent from the current minimum of 5 percent.

Liu said that, combined with an improving local economy, could soon spur a revival in the housing market, which could, in turn, free up rentals that are currently being occupied.

“Some banks are already starting to loosen up,” Liu said. “And finally we’ve started to see some wage increases, and that’s good for affordability and an increase in potential homebuyers.”


Information from: Wyoming Tribune Eagle, https://www.wyomingnews.com

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