There is one rule you hear about when searching for a place to live: Do not spend more than 30% of your income on housing. The 30% income rule for rent comes from the U.S. Department of Housing and Urban Development (HUD) and indicates that families who pay more than 30% of their income on housing are considered cost burdened. Such a situation causes families difficulty affording necessities such as food, clothing, transportation and medical care.
On paper, the rule seems easy to apply. In reality, it’s a tough, sometimes impossible, standard for families to meet. The National Low Income Housing Coalition recently posted this graph on its website illustrating the housing struggle for many families:In 2014, 89% of households earning $20,000 or less per year spent more than the recommended 30% of their income on rent compared to households with larger incomes. Some people will look at the graph and say “they shouldn’t do that”. However, many families do not have a choice.
In the state of Maryland, the minimum wage is $8.25 per hour which equals an annual gross income of $17,160. In order for that individual to follow the 30% rent recommendation, he or she would have to pay no more than $429 a month on rent. Where in Montgomery County can you find an apartment for that monthly price? For a person earning $40,000 a year, a rent of $1,000 or less a month would be appropriate based on the 30% recommendation. The numbers show the 30% rent recommendation is out of reach for many people especially here in Montgomery County.
The HOC Housing Path wait list opened to the general public on August 24, 2015. As of October 15, 2015, 24,393 applications have been submitted. HOC Housing Path will match qualified applicants to all housing assistance programs and vouchers as opportunities become available. A Housing Choice Voucher can be an important lifeline for struggling families. Under program rules, clients spend 30% of their income on rent and the voucher covers the remaining rental portion of the approved housing unit. It allows families to live in quality affordable housing and still have enough money to pay for other necessities such as food, transportation and child care.
The 30% rule is a good standard to strive for; however, it can be unrealistic for low- to moderate-income families without housing assistance. That’s why HOC opened the wait list and continues to seek new opportunities to build or acquire more affordable housing.