Affording Fort Smith: Rental market pushes low-income families to the brink

Editor's note: This is the second part in a series on cost of living in the Fort Smith area.  

Kenzie Sims, 3, crashes onto the couch, tumbling into the cushions. He finds a soft landing next to his mom, Michelle Allison, 32, and his 8-month-old brother Kingston, inside the Esther Home, a residence in Next Step Homeless Services’ transitional housing program in Fort Smith.

Having a safe place to stay means Allison can focus on the next step – finding a home for her family.

Yet, after months of searching and hundreds spent on application fees, she continues to find closed doors.

Today’s housing market is tough for anyone on the hunt, especially as people give up the search for homeownership due to high prices and turn to rentals instead. This makes the market even tighter for those whose only option is to rent.

Allison’s search is restricted even further by two factors – rentals that accept HUD housing vouchers and those that accept people with felonies.

Before moving into the Esther House last April, Allison sought to escape a toxic relationship and drug use. She has been clean for more than a year and works part-time as a cashier.

“I knew that I didn’t leave, I was never going to change,” she said. “It was going to kill me. I ended up getting caught with what I was doing and that changed my life forever because now I’m a felon, and my kids are having to pay. I can’t even find a home for my children.”

Frustration and instability 

For families experiencing homelessness and housing instability, the competitive rental market and added restrictions like past evictions and felonies push stability further away.

Sara Gray, assistant director of Next Step Homeless Services, said this difficult search impacts those who receive housing assistance, like vouchers from the U.S. Department of Housing and Urban Development.

"If you’re only making minimum wage and you can pay $300 out of your own pocket, you’re looking for something maybe up to $500 a month because you know that HUD will cover a certain percentage of that,” Gray said.

The 2022 HUD extremely low-income limit for a household of four in the Fort Smith metro is $27,750.

Fort Smith continues to grow, with record-breaking levels of project valuations for residential and commercial building permits, attracting new businesses and residents to the River Valley.

This growth is positive for the city, Gray said, but many of the new housing options are unattainable for low-income families. 

“It would be wonderful if they would focus more on something that is affordable for lower-paid individuals, not just the luxury brand-new stuff because … that’s not reality for most people,” Gray said.

Affordable rent crisis in Arkansas  

Even before the surge in housing prices during the pandemic, there were 107,431 extremely low-income renter households in Arkansas in 2019 and only 55,924 affordable and available rental homes, according to a report from the National Low Income Housing Coalition.

This year, while the number of affordable and available rental homes has increased by about 3.7%, extremely low-income households have increased by about 4%.

There are only 52 affordable and available rental units for every 100 extremely low-income households in Arkansas. For households of four, these extremely low-income families would be making under $28,000 a year and paying $700 or less in rent.

In Fort Smith, a person working at minimum wage at $11 per hour must work 40 hours to afford a modest one-bedroom rental home at a fair market rent of $562.

To afford a two-bedroom home at the fair market rent of $740 per month, workers must make at least $15 an hour. If they are making minimum wage, they must work at least 52 hours a week.

Fair market rents are calculated with a household paying 30% of its monthly income toward rent and utilities.

Yet, for 30% of households in Fort Smith, housing costs eat up more than a third of their monthly income, on top of the rising price of gas and groceries. This also does not include emergency expenses like car repairs or medical care.

The Urban Institute concluded in a 2019 study that while Sebastian County has a lower cost of living compared with cities like Los Angeles and Austin, “it faced similar economic pressures, the greatest being housing cost compared to income.”

Overall, the median rent in the Fort Smith area has increased by about 5% to 6% over the past year, with some areas seeing a median increase of nearly $60 more a month.

Safety first  

Mapping out her housing search, Allison always puts her children’s needs first. Her ideal place would have two bedrooms and include a washer and dryer so she could keep an eye on her children while doing laundry and not have their clothing stolen from a public space.

She has found places within her budget in the River Valley, but that affordability can come at a price.

“Some of the places are my absolute last option because I’m looking into location and safety for my children,” Allison said. “… There are just some places I don’t want my children to be in.”

Substandard housing, often within the price range of low-income families, can include risks to physical and mental health.

A 2019 report from the National Community Reinvestment Coalition examined the risks of substandard housing including exposure to asbestos, lead and mold that can lead to serious health conditions like cancer and respiratory illnesses.

Whether from housing quality, pests, lack of air conditioning or other issues, these conditions also take an emotional toll on residents, according to a 2016 report from the MacArthur Foundation.

When a person is trying to survive in a low-wage job and take care of their children, trying to find rest in a home that is not safe can increase levels of depression.

The U.S. Department of Housing and Urban Development requires housing to undergo inspection if a family is receiving assistance.

“If you get like a crap apartment which you can afford and that will take your HUD voucher, but they can’t pass the inspection, then you’re back to square one,” Gray said.

'Housing is a human right’  

Allison is still waiting to hear back from different housing options about her applications. More than simply increasing safe and affordable housing, she says barriers need to be removed to reentry and stability for people who have served their time.

"Not just affordable, but places that give people second chances,” she said.

Gray agrees.

“(Allison has) done all of this work, and she can’t get past this thing that’s holding her in her past,” she said. “When do you kind of lose hope of ever moving forward? People say things like ‘housing is a human right.’ Okay, so you have somebody who’s working and has two kids – does she not have the right to have a roof over her head?”

This article originally appeared on Fort Smith Times Record: Affordable rent crisis in Arkansas hits home for low-income families