About the Cause

What is affordable housing?

The Department of Housing and Urban Development (HUD) considers housing to be affordable to a low-income family as long as the cost of housing, including rent or mortgage/tax payments plus basic utilities minus telephone and internet service, does not exceed 30% (before taxes).

• In 2001, 4.8 million low to moderate income working families spent more than 1/2 of their income on housing. By 2010, this number had jumped to 9.5 millioin - just shy of doubling in just 9 years. Over time people are not making enough each year to keep place with rising living costs. (http://www.nlihc.org/detail.article.cfm?article_id=7370)

How much does a household have to make annually to qualify as low income?

Low-income is defined as a household whose annual income does not exceed 80% of the median income for the area, as determind by HUD. Other factors are considered on a regional basis where there might be great disparity between the wages earned by high and low income families. 

• As one example, in 2006 New York City's median household income in the wealthiest census tract was $351,333, while in the poorest it was $8,885. (Roberts, Sam (April 9, 2005). "New York's Gap Between Rich and Poor is Nation's Widest, Census Says", The New York Times.)
• The median monthly rent for unsubsidized housing in NYC increased from $1,000 in 2006 to $1,220 in 2010 (in constant dollars). $1,220 a month implies (using the 30% rule) an individual would have to make $48,800 a year (before taxes). Minimum wage in New York State is $7.25/hour. Which translates to a generous $15,080 a year. This estimate is calculated: $7.25/hr x 40 hr/week x 52 weeks = $15,080 (no sick or vacation days)(http://www.huduser.org/datasets/fmr.html)

Myth: Affordable housing projects lower surrounding property values and attract higher rates of crime to the neighborhood.

Fact: Studies show that new affordable housing developments improve property values, the property tax base, and residential sales prices in surrounding neighborhoods. The vast majority of affordable housing projects created today blend in with the surrounding neighborhoods: matching pre-existing architectural styles and using climate-appropriate construction for the region. (info from habitat for Humanity International www.habitat.org)

Housing problems can be broken down into the following areas:

• Cost burdens: residents pay an excessively large percentage of income on housing costs. The total number of all renters in 2009 experiencing a housing cost burden (using 30% rule) increased to 18.5 million from 17.4 million in 2008. An additional 14.3 million households spend over 50%. 
• Physical inadequacy: Lack of hot water, electricity, toilets, bathtubs, and showers are examples of severe physical deficiencies. Unsafe stairs, ramps, and roofs account for just some of the structural dangers families live with. One in seven poor families lives in housing which is physically dangerous or inadequate. 
• Overcrowding: the number of people living in the house is greater than the total number of rooms in the house. Notoriously difficult to track and log. About 6.1 million households live in overcrowded conditions.

What is the "fair Market Rent" or FMR? How is it calculated?

Imagine you own a house, and you want to know how much you should charge for rent each month. you could look up other apartments and houses in the area and see what they are charging, and compare these with the local FMR to see how it compares.

• Fair Market Rents are gross rent estimates for a given geographic area. They include the shelter rent plus the cost of all utilities, except telephones and Internet.
• HUD used a number of metrics to calculate FMR; far too numerous and complicated to list here. In simple terms, census data is used to calculate the average income for the area, the population density, and the Consumer Price Index. Using these metrics, as well as going rates for rent in the area, the FMR is calculated. 
• HUD does not calculate FMR for every town in every state, but if a town is not calculated specifically , it is included as part of a regional calculation.
• FMR is used for a number of reasons, but primarily it enables the government to determine the eligibility of households applying to various subsidy programs.
• It is important to remember that FMR will vary greatly depending on the location of the property.  Different neighborhoods, even different city  blocks, demand higher or lower rates. As they say in real estate, "location is everything". For example, New York City's FMR is much higher than Minot, North Dakota's.

Problem: The National Minimum Wage is Too Low

One of the most basic problems facing low income families is that the federal minimum wage is too low to afford even a one bedroom apartment at the local FMR. (http://oregonstate.edu/instruct/anth484/minwage.html)

• The minimum wage was first created in 1938, and only in July of 2009 was it increased from $5.85 to $7.25. The last increase was over 10 years ago.
• The other issue with the minimum wage is that it is not indexed with inflation. This means that as the cost of food, fuel, and rent rise each year, the minimum wage is not increased unless Congress votes to do so. See the article below for a summary of why Congress would choose not to increase the minimum wage. 
• http://www.washingtonpost.com/wp-dyn/content/article/2007/01/10/AR2007011001666.html

Despite states' efforts, there is no county in the country where an individual can work 40 hours per week at the minimum wage and afford even a one-bedroom apartment at the local FMR. (http://wwwnlihc.org/oor/oor2010pub.pdf)

How will Bike and Build help?
Bike and Build distributes donations through 4 primary ways:

1. Grant application process
Housing organizations may apply for competitive grants from B&B. Participants review the housing projects and select a proposal for whom to receive the grant at the end of summer.
2. Rider designated donations
Each rider in B&B may donate $500 of their funds donated to a housing project of their choice at the end of the summer. The project choice is fully up to the rider as long as the project is related to affordable housing, the organization is a regertered 501(c)3, and it is approved by B&B directors.
3. On the road donations
Bike and Build would not be able to function without the hosts that provide accommodations for the riders along their trips. As a thank you, B&B donates $100 to the housing project of each hosts choice along the way.
4. Pre-arranged contributions
There are many different organizations that help Bike&Build functions, each of these organizations receive a large contribution at the end of the summer. An example of an organization is the build sites that allow us as riders to participate on their build for an entire week.

Hopefully this information helps anyone interested in donating to understand a little more about the cause and where exactly the donations are going!