A Bethlehem resident making minimum wage of $7.25 would have to work 143 hours per week to afford a three-bedroom house at fair market rent. With 168 hours in a week, this wouldn’t be feasible.
Fair market rent is the price that the federal government deems reasonable to charge tenants. In the Lehigh Valley, the fair market rent increased 8 percent from 2018 to $1,464 for a three-bedroom house or apartment, said Anna Smith, director of Community Action Development Corporation of Bethlehem.
She said income isn’t increasing 8 percent to match the fair market rent. Affordability is defined as 30 percent of a typical income, so in order to afford a home, Smith said people would have to make $54,080 a year – more than $20 an hour, far higher than low-income wages.
Low income levels in Bethlehem continues to be an issue because of low wages, housing costs and inherent natural divides within the community, but efforts by the city and government to improve affordability will benefit low-income populations.
The median Bethlehem household income ($51,880) is high compared to Allentown ($38,522) and Easton ($46,835) according to Data USA, but Alan Jennings, executive director of Community Action Committee of the Lehigh Valley, said the greater number of wealthier residents bring the median up, so Bethlehem appears to not have a low-income issue. In fact, Smith said 30 to 40 percent are considered low-income.
People struggle to pay for basic necessities as expenses rise due to businesses growing and middle- to upper-class residents moving in.
Though income has been rising steadily over the years, Jennings said housing costs are increasing at a faster rate than rapidly developing markets. Older communities, which are the most affordable and tend to offer low wage jobs, still house low-income residents.
“Most of the folks who would qualify as low-income tend to be working in the low paying service sector jobs,” Smith said. “…You’re typically not making necessarily a living wage. If you’re lucky, maybe $16 an hour, but a lot of folks are making less than that.”
Unreliable income also poses a challenge. Smith said employers in low wage jobs often don’t schedule steady hours, preventing people from working multiple jobs.
Amy Brensinger, a Bethlehem community member, said her job as a server is unreliable because her earnings depend on the amount of tips she receives. She said she often lives paycheck-to-paycheck trying to afford rent.
According to Bethlehem’s 2016 Community Health Needs Assessment, 40 percent live in substandard housing, which is greater than that of both Northampton and Lehigh counties, the state and the U.S.
“It seems like there’s a dividing point of where the low-income are and then where the other people live, …” said Pamela Lewis, manager of Community Partnerships at New Bethany Ministries. “So if you go over to the North Side, that’s where economically they are doing very well, and in our cities, they’re struggling. That’s the way it’s set up, unfortunately.”
Brensinger thinks the South Side is actually becoming more expensive as surrounding students drive the need for housing. She said people seem to be moving there because of its recent revitalization, and Bethlehem Steel has become a historic attraction.
Alicia Karner, director of Bethlehem’s Department of Community and Economic Development, said the lowest incomes are found on the South Side, but the department invests “a lot of time and energy” on poverty, and low-income levels exist everywhere.
Jennings said the income divide between the North and South sides has existed since the beginning of Bethlehem Steel, when managers lived on the North Side, and workers lived on the South Side. As the economy grows, demand forces prices up and outpaces the ability for low-income to catch up.
“Instead of focusing on the people who have lived here our whole lives and making it more affordable for us to continue living here, (Bethlehem) is focusing on bringing in people with more money to live here,” Brensinger said.
She said employers should offer jobs that are easier to obtain and base wages on experience and work ethic.
Smith said larger businesses can afford to pay employees better, but some won’t without legislation or pressure. However, higher salaries will retain workers.
“First, increase the minimum wage,” Jennings said. “Second, government and community resources that make it possible to improve the housing stock.”
The Section 8 Housing Choice Voucher Program allows people who qualify based on income to use vouchers on any residence priced at fair market rent or less, paying 30 percent of their income while the government covers the remainder.
Smith said those on Section 8 are employed or collecting disability payments.
“Typically, you’re paying what you can afford based on your income,” she said “These days, Section 8 is really restricted. There are only a certain number of vouchers, and so often, families are on wait-lists years long before they could get access to one.”
Smith suggested expanding the availability of vouchers because rent is people’s primary expense, and it “eats into” income. She believes being able to afford housing is a human right.
Lewis said mixed housing is needed in the community to provide for all income levels, especially those with limited incomes.
“I would like to see the government address this issue since housing is a basic need,” she said.
Inclusionary zoning requires new development projects that include housing to set aside a certain percentage as affordable, which Smith said could alleviate income disparities.
The Lehigh Valley Community Land Trust acquires and rehabs properties, selling them at affordable prices to low- to moderate-income families. Smith said encouraging home ownership will help them reach financial stability.
“There’s a lot of these different programs that attack things from a lot of different angles that could be successful in creating both a safety net—so that when people have an emergency, it doesn’t mean they’re out on the street—but also helping people build wealth in the long term and to get out of that situation,” Smith said.