Rising rent outpaces wage growth, fueling Nebraska housing crisis

OMAHA, Neb. (WOWT) - Rent prices are rising in Nebraska and often people’s paychecks can’t cover the difference.

An analysis by ConsumerAffairs found Omaha has the largest disparity between rent prices and wage growth in the country.

“There’s definitely a housing crisis right now,” Sharena Marrs said. Marrs is the Program Director of Tenant Services for Family Housing Advisory Services, Inc. in Omaha.

She said finding an affording a place to rent is increasingly difficult in Nebraska, especially for low-income families.

“I just believe the cost of living has gone up for families and then there’s really no affordable housing right now,” Marrs said.

Family Housing Advisory Services, Inc. offers free RentWise classes on the third Saturday of every month. Marrs said they recently had their largest class to date, with 25 attendees.

On top of rent education, they can help attendees find housing in their budget and manage their money.

“We might refer them to our financial management services to really dig deep into some of that debt, dig deep into their income. Again, they can still do one-on-one counseling with us to increase that income,” Marrs said.

They can even offer support in a financial crisis by working with landlords. “We’ll say ‘hey, can you waive the late fees, and we’ll cover the rent and get them back on track.’ Then they’ll be working with us to establish financial stability going forward,” Marrs said.

At the end of the RentWise workshop, participants receive a certificate. For those who have previously been evicted or don’t meet income qualifications, this can help them get approved for housing.

“Sometimes when they get that certificate and the landlord knows they’re educated, some of those stipulations might not apply to that individual,” Marrs said.

In addition to rent and financial education, Family Housing Advisory Services, Inc. offers homebuyer education and foreclosure prevention services.

Omaha native Rushana Perry and her family were moving back to Omaha after living away for a period and needed housing quickly. She struggled to find a place in her budget in a highly competitive rental market.

“By the time you picked up an application, if you tried to bring back the application the next day, the houses or apartments or whatever type of housing it was were already rented,” Perry said.

She also faced much higher rent prices than she’d previously seen living in the city.

“I feel like the market is so overpriced right now. The smallest places that are not so much up to date are extremely high and unfortunately most people’s pay isn’t meeting that rent standard,” Perry said.

She reached out to Family Housing Advisory Services for help. They connected her with a rental company and she found an apartment. Then, they encouraged her to attend their workshops, including RentWise, where she learned more about financial planning.

“I know a lot of information already about finances, so it was more of a refresher for me, but I also learned new things as well. That’s why I think it’s always important to remain open-minded, don’t think that you always know everything,” Perry said.

Now, she’s in another program with Family Housing Advisory Services, as she works toward future homeownership.

“Having to pay so much rent, you have to cut back on other things, other bills. You have to really, really be strategic on your financial planning each month,” Perry said.

She appreciated that officials at Family Housing Advisory Services encouraged her to bring her young son along to learn too.

“Being able to give my son the opportunity to see his parents learn about the importance of managing money and then teaching him that at home,” Perry said.

Something these classes can’t solve is a lack of housing in Nebraska, especially income-based options.

“Often times it’s because developers just can’t build and operate housing at that price point without going out of business. It doesn’t make any financial sense for them to do it, because the amount of money that they would take in for rent wouldn’t be enough to build the property or to operate it,” Sarah Saadian said. Saadian is the Senior Vice President of Public Policy and Field Organizing with the National Low Income Housing Coalition.

Data from the National Low-Income Housing Coalition shows a shortage of more than 45,000 rental homes that are affordable and available for “extremely low-income renters” in Nebraska, which accounts for more than 67,000 people.

“Wages aren’t keeping up with housing costs. In Nebraska, for example, even though it might seem like it’s more affordable than other parts of the country, you still need to earn about $20 an hour to afford a modest two-bedroom apartment,” Saadian said.

NLIHC data also shows a Nebraskan earning minimum wage of $12 an hour would need to work about 55 hours a week to afford rent for a modest one-bedroom home.

To address the crisis, in addition to building more affordable housing, NLIHC suggests more investment by the federal government.

“We need to bridge that gap between wages and housing costs by providing universal renting assistance for every person who is eligible. Right now, only one in four people were eligible to get assistance, because we don’t fund it at the level that’s needed,” Saadian said.

She also recommends creating permanent programs that help prevent eviction and homelessness, as well as greater renter protections.

“Some communities have passed legislation to stabilize rents or to put reasonable limits on how often or how much landlords can raise rents by or to give people enough notice so they can adjust to a rent increase,” Saadian said.