Examining Housing Affordability In Maryland

In a series of four articles Conduit Street takes a look at Housing Maryland: A Housing and Policy Framework for Today and Tomorrow as well as state and local government efforts to address sustainable housing, revitalization and community stabilization. In the first article Conduit Street set the foundation by taking a look at trends in Maryland’s housing landscape. In this second installment, we will look at housing affordability in the State.

Snapshot: Housing Affordability in Maryland

Research compiled by DHCD’s Office of Policy, Planning and Research helped shape the Housing Maryland framework and provided some data on housing affordability within the state. The research report may found in Appendix A: Maryland Trends and Conditions – A DHCD Research Report.

Using data from the 2010 census, the report pulled some key findings on cost burdened households within Maryland. According to the Department of Housing and Urban Development (HUD) a household is considered cost burdened when more that 30 percent of the family’s income is spent on housing costs. In turn this stretches budgets very thin and makes it difficult for the household to afford other necessities such as food, clothing, transportation and medical care.

Findings noted in the report included:

  • Households earning less than $35,000 annually are more likely to spend greater than 30 percent of their income for housing.
  • Slightly more than half of all households who rent their dwellings spent more than 30 percent of their income on housing.
  • Of the estimated 1,1271,078 renter households in Maryland, 29 percent earned less than 50 percent of area median income and more than half were cost burdened.

These households, particularly rental households, are markedly vulnerable to changes in the affordable housing market. And some jurisdictions have a greater amount of cost burdened households than others. As stated in the report:

Based on the 2010 U.S. Census American Community Survey (ACS), across all income ranges, 62.1 percent of total households in Maryland paid less than 30 percent of their income on housing costs; 37.9 percent of households spent more than 30 percent on housing (see Figure 4 below). Jurisdictions that had greater than the 37.9 percent statewide average of cost burdened households included Baltimore City (45.7 percent), Prince George’s (44.7 percent), Dorchester (40.9 percent), Caroline (38.9 percent), Somerset (38.9 percent), Wicomico (38.9 percent), Montgomery (38.2 percent), Charles (37.9 percent) and Kent (37.7 percent). The affordability gap for these jurisdictions identified as cost burdened suggests that there are not enough affordable units available for households with the greatest need.

Housing Cost Burdens - All Households

Despite Maryland ranking near fairly high among states according to median household income (currently $68,854), there is a significant affordability gap between those at the top of the household income spectrum and those at the lowest end who face the worse affordability problems.

A separate report issued by The Commonwealth Institute, DC Fiscal Policy Institute, and Maryland Center on Economic Policy, entitled Bursting the Bubble: The Challenges of Working and Living in the National Capital Region, focuses on housing inequality in the capital region which includes Frederick, Montgomery, Prince George’s, Charles and Calvert Counties. It found that within the capital region, a third of the homeowners and half of renters were cost-burdened. Renters were especially afflicted in comparison to homeowners due to their lower household incomes. Prince George’s County had particularly high rates of households spending more than 30 percent of their income on housing costs, with 43 percent or 66,259 homeowners considered cost burdened.

Cost Burdened Households in Capital Region
Source: Bursting the Bubble The Challenges of Working and Living in the National Capital Region

These figures highlight a need to ensure there is enough affordable and sustainable housing for the growing number of those in need.  The next question becomes what is being done to address this need?