27 Million Households Can Pay Rent but Little Else, Study Says

For 27 million households, owning or renting a home doesn’t mean they are any closer to fulfilling the American dream because they can’t afford to buy other necessities, a study says.

The report’s author, Michael Stone, a professor of community planning at the University of Massachusetts in Boston, noted that 50 years ago, President Franklin D. Roosevelt said one-third of the nation lacked adequate housing.

“If President Bush were to be so candid, he would have to acknowledge that we are now one-third of a nation ‘shelter poor,’ ” Stone said in his report, issued by the Economic Policy Institute, a liberal think tank in Washington.

“Nearly 27 million households in the United States--containing 78 million people, or 32% of the population--face so great a squeeze between inadequate incomes and high housing costs that, after paying for their housing, they are unable to meet their non-shelter needs at even a minimum level of adequacy.”

Between 1970 and 1987, housing costs increased more sharply than incomes, Stone said, with renters particularly hard hit. Median rent rose by 26%, while median income declined by 13%, he said.

The study found that more than 42% of all renters--13.9 million households--were shelter poor in 1987, most with incomes of less than $20,000.

As for homeowners, 22%, or 12.7 million households, were shelter poor in 1987, and Stone said many are risking foreclosure.

Stone blamed this “shelter poor” squeeze on lagging incomes, escalating housing costs, over-dependence on credit, ownership arrangements that encourage speculation, and mortgage rate instability.