From time to time, we stumble on one of those data points that just makes us take a step back and puts things in significant perspective. We were discussing Aurora, CO Renters Insurance with a client recently, and they mentioned a study by the National Low Income Housing Coalition.
The study determines what you’d need to make in order to afford a two-bedroom apartment in each state. In Colorado, you’d need to make $21.12 in order to be able to actually afford that apartment, and to avoid being severely rent burdened. Perhaps the worst news of all is that the 2015 number in Colorado was $19.89.
To afford an apartment in lovely Colorado, you need to make sixteen percent more money than you did last year, and that’s assuming that you made the $19.89 required in 2015. Many people don’t receive annual raises of that size, and many people couldn’t afford their homes to begin with. As time goes on, housing becomes less and less affordable to those in the middle class and below.
Are Colorado Apartments Affordable On Minimum Wage?
As of January 1, 2016, the state minimum wage is $8.31 per hour. In other words, even two people working forty hours each at minimum wage would come up substantially short. That is, perhaps, where the largest problem comes into play. Households with two minimum wage earners often have at least one infant or young child in the home.
Child care expenses as well as the expenses of having a child in the first place eat into those wages quickly, and make housing less affordable for families throughout Colorado who are just trying to make ends meet. Perhaps worse still, these often are the same people who have received zero education in how to make a budget, how to manage money, or how to cook affordable and healthy meals at home.
If one of those individuals in the home took a second job at or near minimum wage, they’d be able to afford the home, but at what cost? Increased child care costs? Time away from their family? Long term risks to their health? Lack of any leisure time at all? Long term sleep deprivation? All of these are serious risks, and many of these risks have significant negative impacts on the raising of a child and on the family unit as a whole.
Are Colorado Apartments Affordable When Doing What’s Necessary Cuts Off Access To Services?
That same family is unlikely to be able to get time off to apply for healthcare or other services. They also are unlikely to be able to get to a food bank during the hours their open. A doctor’s appointment for themselves or their child results in having to take a day off work, at a significant loss of wages and often means risking their employment.
Most job training and education is also, therefore, out of reach. Even if the costs of the same were to be paid entirely through grants or loans, getting to the training or education would likely prove impossible. These families are less likely to have access to a vehicle, and more likely to depend on public transportation which is effective, but time-consuming.
Are Colorado Apartments Affordable In A Seasonal Economy?
Of the 2.8 million employed persons in Colorado according to the Bureau of Labor Statistics, 326,000 of the jobs are in Leisure and Hospitality. These jobs are most likely to pay at or near minimum wage, and they are most likely to be seasonal in nature. The people working these jobs often find themselves searching for employment at least twice a year, because of the natural cycle of such work.
It’s also worth noting that many of these jobs are in food service or other tipped fields. The tipped minimum wage in Colorado is currently $3.02 per hour. Anyone who can expect tips need only be paid that amount, and makes up the balance in tips. While the employer is supposed to make up the difference to ensure they are getting minimum wage, not all employers do. Not all employees are aware of the requirement, either.
And what happens when there is a crisis?
What Do You Have To Cut To Make Colorado Apartments Affordable?
You could cut out the internet to make Colorado apartments affordable, in theory. However, doing so makes homework difficult for children in the household. It also makes it nearly impossible to search for jobs. Gone are the days when you could walk in, fill out an application, and get an interview. Applications are to be completed online, and a household without the internet will find difficulty in locating or improving employment.
Skimping on childcare to make Colorado apartments affordable is also a terrible idea. Using questionable child care puts the child at risk. If something happens, it also puts the family unit at risk because using unregistered childcare may reflect poorly on the parents who are just trying to make ends meet.
Some families avoid spending money on Colorado Renters Insurance to make Colorado apartments affordable. They live carefully, and hope. Living carefully isn’t enough to avoid a disaster such as a fire when you live in an apartment, because your neighbor’s disaster is also yours.
After that fire, the family will have additional living expenses that could be covered by renters insurance. Without that coverage, they don’t have a place to go for more than the few days a charity will cover a hotel. They don’t have any way to replace their possessions, including things necessary to raise children. All because making housing affordable in Colorado required them not to spend the fifteen dollars or so that renters insurance generally costs.
We don’t have an answer that solves the problem of making Colorado apartments affordable. We do suggest that renters insurance be part of everyone’s budget, because if your budget isn’t sustainable on a day-to-day basis there is simply no way to recover from a crisis.
While rates are set based on specific factors relevant to the policy, there are often choices which can be made to help to make the coverage more affordable. Low income renters are the most underserved group by renters insurance, as well as the ones who need it most. Effective Coverage can help to clarify the choices you can make to make coverage more affordable, as well as to discuss the impact those choices would have on coverage in the event of a loss.
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