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Study: Grand Forks residents need to earn $16.42 an hour to afford two-bedroom rental housing

Downtown Grand Forks and the 58201 zip code is the most expensive area to live in the city, requiring a $17.31 housing wage, according to the report. The least costly is East Grand Forks, which has a housing wage of $15.38.

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The sun rises behind a water tower in Grand Forks. (Grand Forks Herald photo)
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GRAND FORKS — Residents of Grand Forks need to earn $16.42 an hour to afford two-bedroom rental housing in the local market, according to the latest annual report from the National Low Income Housing Coalition, which tracks housing affordability for minimum wage workers.

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So far, there are three signed tenants. They are Tropical Smoothie Café, My Salon Suites and Palm Beach Tan. Plans call for 10 to 15 total tenants.

That may seem relatively attainable, especially compared to states like Connecticut with a housing wage of $27.80, but it can still be a difficult wage to support oneself or a family, especially for workers in service and retail jobs, college students or young professionals with entry-level positions in Grand Forks.

The estimated mean renter wage in Grand Forks is $16.39, the report says, slightly below the housing wage.

Bridget West, 26-year-old operations specialist with the Grand Forks Region Economic Development Corporation, pays $1,090 for her downtown Grand Forks apartment, which is about 30% of her income.

Downtown Grand Forks and the 58201 zip code is the most expensive area to live in the city, requiring a $17.31 housing wage, according to the report. The least costly is East Grand Forks, which has a housing wage of $15.38.

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West expects her rent to increase — when her lease is up in December — because of inflation.

While Grand Forks’ cost of living index is lower than the national average and while affordable rent can be found throughout the city, West said she recognizes that wages need to increase to keep up with rent and keep young professionals from moving elsewhere, like Minneapolis or Fargo.

Median rent for a one-bedroom apartment in Grand Forks increased 15.6% from July 2021, according to a report from Dwellsy, a rental listing site. Comparatively, Fargo’s median rent is lower than Grand Forks’ and only increased 1.3% in the same timeframe.

“There’s a lot of discussion within the community that we need to pay better wages,” West said. “A lot of that has to do with the job make-up, since there are a lot of entry level jobs but not a lot of middle management. Are we providing jobs with wages that meet the rising cost of living?”

Efforts are being made within the city to make rent affordable and raise pay to incentivize young professionals to stay in Grand Forks, West added, such as the Regional Workforce Impact Program grant. The grant works with five area counties to support benefits and resources that would attract talent and build a strong workforce.

But there is still more work to be done, said Blue Weber, president and CEO of the Downtown Development Association.

It’s imperative that businesses pay affordable wages to retain workers and keep Grand Forks growing as a city, Weber said. It’s also important for residents who qualify for low-income housing to use such programs.

Inflation is up 9.1% year over year across the country, with energy prices up 7.5% just from June to July 2022. The rent of primary residences increased 5.8% in the last year in the U.S., which is the highest increase since 1986, leading to a surge of evictions and rental assistance needs across the country.

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“(A wage of) $16.42 is becoming more affordable,” said Weber, who rented for years before settling in a permanent home with his wife near downtown. “It’s starting to shift in that direction, but a lot of smaller Grand Forks businesses wouldn’t believe you have to hit that number to afford a place to live.”

In Grand Forks, the estimated median renter household income is $37,432. Affordable rent at that salary would be $696 a month. The current fair market rate in Grand Forks is $669 for a one-bedroom home, $854 for a two-bedroom and $1,213 for a three-bedroom home.

Grand Forks workers who earn a mean hourly wage less than the reported $16.42 housing wage include those in personal care and service, building cleaning or grounds maintenance, and restaurant staff, according to the U.S. Bureau of Labor Statistics.

The NLIHC housing wage is estimated using the hourly wage needed of a full-time worker to afford a “modest rental home” at the U.S. Department of Housing and Urban Development’s fair market rent without spending more than 30% of their income on housing costs, which is the accepted standard of affordability.

The HUD fair market rent is calculated as the 40th percentile of gross rents for standard quality units in a local housing market. It excludes “low quality units,” already subsidized units and units that were built in the last two years. Calculating FMR analyzes data including gross rents data from the U.S. Census Bureau, gross rent information from HUD’s American Housing Survey and telephone surveys.

While West is planning to move to the northwest United States next summer, which factored into her decision to pay a higher rent in Grand Forks to prepare for a higher cost of living where she’ll move, she believes Grand Forks is a great place to live and can continue to grow.

“I think we’re headed in the right direction,” West said. “I don’t know if it’s ideal right now, but I think we’re taking steps to make it that way.”

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