Every dollar Jilma Davila makes working various part-time jobs goes toward rent on a three-bedroom apartment for her and her two teenage sons. Though it’s a far cry from being homeless, which the family was a year ago, the gap between her income and the cost of living means there’s nothing left for other necessities like gas or food.
As she works to find more stable and gainful employment, Davila is keeping a roof over her family’s head with rent money through the City’s rent assistance program. “It’s shelter, but I think without this assistance from the City, I wouldn’t be where I am today,” she said.
Despite a growing U.S. economy where the unemployment rate is at its lowest level in decades and wage growth is good, a recent GOBankingRates survey found that many U.S. residents are struggling to afford basic necessities. The Consumer Price Index has risen by 2.5 percent on all goods, from housing to energy, in the past 12 months. And GoBankingRates reported San Antonio is among the 10 cities where the cost of living is rising the fastest.
The personal finance website used the 50-30-20 rule to determine the income needed in 50 large cities for its residents to put 50 percent toward necessities – like rent, food, and transportation – 30 percent toward nonessential costs, and 20 percent into savings. Last year in San Antonio, an income of $46,154 was needed to live comfortably according to that rule. In 2018, that rose to $58,504, an increase of 27 percent.
Austin, Arlington, and Fort Worth, as well as two California cities, are also on the list of cities where the cost of living is rising faster than wages.
In August, the final report from the Mayor’s Housing Policy Task Force showed that not only are San Antonio housing costs rising faster than wages, but the cost of health care also is outpacing income growth.
That’s why Veronica Soto, director of the City’s Neighborhood and Housing Services department, said she is not surprised that San Antonio would make such a list. “But I’m surprised we are in the Top 10,” she said. “Overall, we’re still considered a very affordable city.”
Drivers of those price hikes in housing are varied. As housing costs have gone up in San Antonio the last 10 years, due to both inflation and gentrification, so have property tax valuations, Soto said. At the same time, fewer affordable homes are being built, leading to less home ownership and greater numbers of people renting, by choice or not.
The Texas A&M Real Estate Center’s repeat home sales index shows the price of single-family residential homes in San Antonio increased by 6.8 percent over this time last year. The median list price of homes in Bexar County is $260,000, according to the San Antonio Board of Realtors, and the median residential rent in San Antonio is $1,445.
The Federal Reserve Bank of Dallas reported in October that San Antonio home affordability has followed a national trend. Affordability is declining, with the percentage of homes sold that a median-income household can afford decreasing from 56 percent in the second quarter to 55 percent in the third quarter.
“We know, for housing, more people are cost-burdened, meaning they are spending more than 30 percent of their income on housing-related costs. Both renters and homeowners face that,” Soto said. “Ten years ago, 30 percent meant you could afford maybe a three-bedroom apartment, and now it’s a two-bedroom. In a house, utilities are taking more of that income to stay in that house. … It’s not just renters who are spending too much of income on housing costs.
“That has led to more evictions in San Antonio and a mismatch between the supply of affordable housing and the demand,” she added. “And once you have those evictions, it signals a downward spiral, it affects a person’s credit report and their ability to find housing.”
Navarra Williams, president and CEO of SAMMinistries, said extreme rises in cost of living can be catastrophic. “Needing 25 to 30 percent more income just to cover the basics means people have to make difficult choices again and again – pay the rent or the utilities? Buy food or gas for the car?” said Williams, whose nonprofit helps people experiencing homelessness.
“As the expenses grow, they live in a constant state of worry and fear, and shift into survival mode,” he added. “Every day is spent trying to figure out what to do and where they can get help, leaving no time or energy for family, kids, health, education, or trying to find a better job or a less expensive apartment.”
Nationally, foreclosures caused by homeowners failing to make mortgage payments are down. But in San Antonio, the percent of delinquent mortgages is 1.6 percent, just above the national value of 1.1 percent, according to the real estate website Zillow.
The rising cost of living also means San Antonians can’t set aside savings according to the 50-30-20 rule, money that could soften the financial blow of a job loss, health crisis, or other catastrophes.
In July, Amanda Arizola, a 32-year-old single mom to three daughters, lost her job as an assistant supervisor in landscaping at SeaWorld San Antonio. “I have no family out here to help me, and once the kids got sick, I’m the only one here to care for them,” Arizola said. “The kids get sick and you have to leave.”
Before losing her job, the $700 net pay a month she was bringing home went toward her $674 monthly rent, leaving her reliant on Supplemental Nutrition Assistance Program (SNAP) benefits, help from friends, and inconsistent child support payments. Funding from the City’s rental assistance program is paying her rent temporarily while she completes a massage therapist training program and finds a permanent job.
But despite the strong labor market, wage growth has lagged. A Pew Research Center report in August stated that today’s real average wage has about the same purchasing power it did 40 years ago. What wage gains there have been is mostly flowing to the highest-paid tier of workers.
In May 2017, workers in the San Antonio-New Braunfels metropolitan statistical area had an average hourly wage of $22.21, about 9 percent below the nationwide average of $24.34, according to the U.S. Bureau of Labor Statistics. The average weekly wage in Bexar County was $905.
