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NEW STUDY SHOWS RENTAL AFFORDABILITY STILL A PROBLEM FOR VERY LOW-INCOME RENTERS IN THE SOUTH

 NEW STUDY SHOWS RENTAL AFFORDABILITY STILL A PROBLEM
 FOR VERY LOW-INCOME RENTERS IN THE SOUTH
 ATLANTA, Dec. 13 /PRNewswire/ -- Affordability of rental housing continues to be a serious problem for very low-income renters in the South despite declines in rental rates, according to a new study by the Federal Home Loan Bank of Atlanta.
 A 6.5 percent decrease in income levels for very low-income families during the 1980s offset any gains made by drops in rental rates.
 The Federal Home Loan Bank study compares rental affordability for very low-income families in 13 metropolitan areas in the Southeast.
 (A table summarizing the results for these 13 cities follows this release.)
 "Although rental rates during the past few years have remained flat, or decreased in some areas of the South, rates have remained relatively high for very low-income households," said Richard Fritz, the bank's senior economist. "Recent declines in rental rates have not lessened affordability problems for very low-income renters. However, the problem is slowly improving in most of the cities studied.
 "Slow income growth at the low end of the income distribution has exacerbated affordability problems and increased the number of households unable to afford adequate rental housing," he said.
 High rental vacancy rates have restrained rents only at the high end of the rental market, where overbuilding glutted the market, while the poor have continued to face high housing costs as the supply of low-cost units dwindles, Fritz said.
 "This new study takes a fresh look at the problem of rental affordability," Fritz said. "The bank conducts an ongoing analysis of housing affordability, but this is our first in-depth study of the rental side of the housing market. This is part of our effort to identify, and then help develop solutions to, market pressures on housing for low-income families."
 Metropolitan areas studied include Birmingham and Montgomery, Ala.; Washington, D.C.; Bradenton, Miami, Sarasota, Tallahassee and West Palm Beach, Fla.; Atlanta; Baltimore; and Charlotte, Greensboro and Raleigh, N.C.
 The bank's study defines very low-income renters as those whose household income is 50 percent or less of the area's median household income. The study uses an index which is a ratio of low-income rental cost to affordable rent, based on the U.S. Department of Housing and Urban Development's standard for affordable rent at 30 percent of very low median household income.
 The Federal Home Loan Bank of Atlanta is a $17 billion reserve credit bank that provides low-cost financing and other banking services to its member institutions that offer housing finance to consumers in Alabama, Florida, Georgia, Maryland, North Carolina, South Carolina, Virginia and the District of Columbia. The bank is one of 12 in the Federal Home Loan Bank System, established in 1932 to offer credit at competitive rates to support economical home financing.
 VERY LOW-INCOME RENTER AFFORDABILITY
 BY INCOME DISTRIBUTION
 1990
 Pct. of
 rental
 cost
 Median afford-
 income able
 of very to very
 Very low- Low- Median low-
 No. of very low- income income rent income
 low-income income house- rental afford- renter
 renter level holds cost able house-
 MSA households (a) (b) (c) (d) holds
 AL
 Birmingham 50,700 $15,700 $ 8,996 $350 $225 64 pct.
 Montgomery 17,274 15,650 9,044 349 226 65
 DC
 Washington 283,300 27,050 14,663 669 367 55
 FL
 Bradenton 6,230 15,150 8,850 422 221 52
 Miami 117,033 18,200 8,689 576 217 38
 Sarasota 7,641 17,050 9,339 426 233 55
 Tallahassee 12,294 16,450 7,872 433 197 45
 W. Palm Beach 30,129 20,000 10,395 553 260 47
 GA
 Atlanta 155,300 20,750 10,971 499 274 55
 MD
 Baltimore 156,500 20,250 10,478 445 262 59
 NC
 Charlotte 52,480 19,150 10,228 468 256 55
 Greensboro 46,262 18,050 10,001 426 250 59
 Raleigh 49,530 20,950 11,259 457 281 62
 NOTES:
 (a) 50 percent of median household income
 (b) Based on income distribution of renter households 50 percent
 below median income
 (c) 80 percent of market rental costs
 (d) Assumes affordable rent at 30 percent of median very-low
 household income
 -0- 12/13/91
 /CONTACT: Rebecca A. Vail, 404-888-8119, or James J. Wallace, 404-888-5593, both of the Federal Home Loan Bank/ CO: Federal Home Loan Bank ST: Georgia IN: FIN SU:


BN-TG -- AT009 -- 2392 12/13/91 13:15 EST
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Date:Dec 13, 1991
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