discretionary expenses. Households with higher income may be <br />able to pay more than 30% of their income on housing without <br />impacting the household's ability to pay for necessary non- <br />discretionary expenses. <br />Cost burden compares income to housing costs and does not <br />account for accumulated wealth. As a result, the estimate of how <br />much a household can afford to pay for housing does not include <br />the impact of accumulated wealth on a household's ability to pay <br />for housing. For example, a household with retired people may <br />have relatively low income but may have accumulated assets (such <br />as profits from selling another house) that allow them to purchase a <br />house that would be considered unaffordable to them based on the <br />cost burden indicator. <br />Cost burden is only one indicator of housing affordability. Another way of <br />exploring the issue of financial need is to review wage rates and housing <br />affordability. Table 20 shows an illustration of affordable housing wage <br />and rent gap for households in Lane County at different percentages of <br />median family income (MFI). The data are for a typical family of four. The <br />results indicate that a household must earn $15.44 an hour to afford a two- <br />bedroom unit according to HUD's market rate rent estimate. <br />Table 20. Illustration of affordable housing wage and rent gap by HUD income categories <br />for a two-bedroom rental unit, Lane County, 2012 <br />Minimum <br />100% <br />120% <br />Value <br />Wage <br />30% MFI <br />50% MFI <br />80% MFI <br />MFI <br />MFI <br />Annual Hours <br />2088 <br />2088 <br />2088 <br />2088 <br />2088 <br />2088 <br />Derived Hourly Wage <br />$8.80 <br />$8.51 <br />$14.18 <br />$22.68 <br />$28.35 <br />$34.02 <br />Annual Wage At Minimum Wage <br />$18,374 <br />$17,760 <br />$29,600 <br />$47,360 <br />$59,200 <br />$71,040 <br />Annual Affordable Rent <br />$5,512 <br />$5,328 <br />$8,880 <br />$14,208 <br />$17,760 <br />$21,312 <br />Monthly Affordable Rent <br />$459 <br />$444 <br />$740 <br />$1,184 <br />$1,480 <br />$1,776 <br />HUD Fair Market Rent (2 Bedroom) <br />$806 <br />$806 <br />$806 <br />$806 <br />$806 <br />$806 <br />Is HUD Fair Market Rent Higher Than The Monthly Affordable Rent? <br />Yes <br />Yes <br />Yes <br />No <br />No <br />No <br />Rent Paid Monthly OVER 30% of Income <br />$347 <br />$362 <br />$66 <br />na <br />na <br />na <br />Rent Paid Annually OVER 30% of Income <br />$4,160 <br />$4,344 <br />$792 <br />na <br />na <br />na <br />Percentage of Income Paid OVER 30% of Income for Rent <br />23% <br />24% <br />3% <br />na <br />na <br />na <br />Total Spent on Housing <br />53% <br />54% <br />33% <br />20% <br />16% <br />14% <br />For this area what would the "Affordable Housing Wage" be? <br />$15.44 <br />$15.44 <br />$15.44 <br />$15.44 <br />$15.44 <br />$15.44 <br />The Affordable Housing Wage Gap IS: <br />$6.64 <br />$6.93 <br />$1.26 <br />na <br />na <br />na <br />Source: U.S. Department of Housing and Urban Development, http://www.huduser.org/DATASETS/il/i109/index.html, <br />http://www.huduser.org/datasets/fmr.html <br />MFI: Median family income, FMR: Fair market rent <br />Part 11 - Eugene Housing Needs Analysis ECONorthwest Page 79 <br />