Rent Crisis in Boulder and Fort Collins?

The Denver Post is all over the latest Cenus Bureau data on Boulder and Fort Collins rental housing price burdens:

About 44 percent of renters in Boulder paid at least half their income for housing last year – a higher percentage than in any other city in the country, according to data from the U.S. Census Bureau.  . . . Fort Collins ranks 26th nationally, with 36.3 percent of renters paying more than half their income for housing.

But, the Post missed the boat here.  Unlike other cities on the list like Compton, a low income city in California, Boulder’s record high percentage of renters paying a majority of their income for rent isn’t a cause for concern, so much as it is a fluke of the way the Census was designed.  Renters in both Boulder and Fort Collins are frequently college students, who routinely spend more than they earn.Certainly, when someone who is living entirely off their own income needs to spend half of it on rent, the situation is dire.  If you make $1,000 a month at a part-time job, pay $525 a month in rent, have to maintain a car to drive to work, and have no other means of support, you are well on your way to malnutrition.  This is the kind of situation you see in Compton.

But, since withdrawals from retirement savings, student loans and gifts from parents don’t count as income, students and retirees (Boca Raton in Florida also made the list, probably due to the large number of retirees who live there, and College Station, Texas, like Boulder and Fort Collins, has lots of college students), people who are not spending unreasonable amounts on rent relative to their avaiable cash, can look like they are in dire straights when the comparison is made solely to their income.

Someone in law school making $1,000 a month waiting tables at a Boulder restaurant, paying $525 a month in rent, and receiving an additional $24,000 a year in student loans and parental assistance would be part of the 44 percent of renters paying a majority of their income in rent.  Yet, few people understanding all the facts would consider that law student to be under severe financial pressure, which is what the majority of income spent on rent figure is designed to measure.

No one in Boulder replying to the Census questions that were the basis of the study results was in anyway untruthful.  The question asked simply didn’t ask what the people doing the study really wanted to know, which was how many people over overwhelmed by rents beyond their means, something hard to get at unless you exclude students and retirees first.

Boulder might even have a genuine rental housing crisis for people who aren’t students and retirees, but the numbers from the Census Bureau, because they contain confounding data, won’t tell us that.

Is the fluke result harmless?  Not necessarily.  If no one pays enough attention, some government formula, based on the percentage of renters who pay a majority of their income for rent, might send housing assistance aid to Boulder and Fort Collins and College Station and Boca Raton, when the real need is greater elsewhere.  As a result, poor people stuggling to survive might not get housing aid they need, while college students and affluent retirees might get help that they don’t need nearly so badly.

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Andrew Oh-Willeke

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