Jeremiah Jeffries is entering his second decade of teaching elementary school, and he still can’t afford an apartment of his own.

The San Francisco resident shared a one-bedroom apartment with a friend when he first moved to this city 10 years ago to work at a preschool. It was 1997, the height of the dot-com boom. The unit, in a residential hotel, cost $1,100 a month.

“That was the cheapest we could find,” said Jeffries. “We split the rent on that and basically shopped at Safeway, thrift sales, and ate a lot of macaroni and cheese.”

The $10 hourly wage at the preschool job didn’t cover his bills, though, so he had to take a second job as a counselor at a school for emotionally disturbed children. At $6 an hour, that still wasn’t enough. Jeffries took yet another job, working at his building on weekends.

After a year, he found employment in the San Francisco Public Schools. He’s now earning an annual salary of about $43,000, and he has his own room. But he shares his two-bedroom apartment with another teacher, plus two houseguests who sleep in the living room—one of whom is a foreign student Jeffries expects will live there for as long as a year.

Jeffries pays about 20 percent of his income for his half of the $1,420 rent. If he lived in the apartment by himself, that share would rise to 40 percent. Paying the average San Francisco rent of $1,743 would edge his housing costs up to nearly half his gross pay. That’s the dilemma for many urban renters in Jeffries’ middle-class income bracket (80 to 120 percent of the area median income): double up, suck your budget dry, or move to cheaper suburban housing and endure a long commute.

From 2001 to 2004, the share of American renters who pay more than half their incomes for housing jumped by 2 million to 15.8 million, according to a report from Harvard University’s Joint Center for Housing Studies (JCHS). That’s almost 44 percent of the nation’s 36.2 million renter households.

Many of those renters are in low-income households that can qualify for subsidized housing. But in the nation’s high-cost urban areas, where rents have risen at nearly twice the pace of wages and home prices have skyrocketed, they are increasingly being joined by residents higher up the income ladder.

The upshot: Oftentimes, even families earning middle-class incomes can no longer participate in the American dream of homeownership—and in fact, in many areas, they are barely able to find affordable rentals. The number of middle-income households paying more than half their incomes in rent surged 30 percent from 2001 to 2004, Harvard’s JCHS found.

The shape of rental demand

“You don’t have to be poor not to be able to afford housing,” said Linda Quick, president of the South Florida Hospital & Healthcare Association, whose member hospitals have struggled to retain nurses as housing costs have soared.

The number of renter households is projected to increase at least 1.8 million by 2015, with minorities responsible for that entire gain, according to The State of the Nation’s Housing, a report from Harvard’s JCHS.

This represents a massive business opportunity for apartment owners and developers, according to Leanne Lachman, president of Lachman Associates, a real estate consulting firm (see story on page 36). “The three big segments of demand are low- and moderate-income households, minorities, and immigrants, and there’s a lot of overlap among those three categories,” she said. “This is a huge demand segment for rental housing.”

At Holy Cross Hospital in Fort Lauderdale, 44 percent of the nurses who left their jobs in 2005 cited the cost of living as a factor, and that share rose to 60 percent in the first quarter of 2006. In Broward County, where Holy Cross is located, nurses earn a median annual wage of $50,362, according to the Broward Housing Partnership—or about 120 percent of the county’s median annual income. Even so, that income is little more than half the $98,000 that Florida International University estimated workers must earn to afford the median-priced home in the county.

Workers in professions that are key to their communities’ health, safety, and well-being are not only being priced out of homeownership in many areas, they are also being forced out of the communities they serve by surging rents. Nurses, emergency medical workers, teachers, firefighters, and police officers are among many workers forced to live dozens of miles from their jobs in order to find affordable housing.

From 2000 to 2005, wages for median income U.S. families rose 15.5 percent, far short of the 58 percent increase in the average cost of a single-family home, according to data from Homes for Working Families, a nonprofit advocacy group. Rents jumped 22.6 percent over the same period, Census figures show.

“There really is no more important problem to focus on than the challenge of workforce housing,” said Ralph Egues, executive director of the Nursing Shortage Consortium of South Florida, which has made housing one of its top priorities in the struggle to help its members hire and keep healthcare workers.

“What’s happened in South Florida is over a fairly short period of time, you’ve had more than a doubling of property values, and wages have not kept pace,” he said. Nearly 45 percent of households are unable to afford Broward County’s median rent of $1,122, according to County Commissioner Kristin Jacobs.

Los Angeles, where renters make up 61 percent of households, exemplifies the demographic and pricing trends overtaking the apartment industry. The city’s average rents have jumped 82 percent in the last decade, to $1,750 a month, according to data from RealFacts, a Novato, Calif.-based real estate research firm. Over that same period, median hourly wages in Los Angeles County rose just 30 percent.

Many of those pinched by the gap between wages and housing are immigrants, who make up more than 36 percent of residents in Los Angeles County. Franklin Acevedo, president of Rampart Properties, a development and property management company that owns about 1,000 rental units in the area, has made them his focus.

Knowing your market

About 85 percent of the company’s renters are immigrants. Some are Koreans, Armenians, and Filipinos, but the bulk of the residents are Latinos, like Acevedo himself, whose family moved to Southern California from Colombia when he was a child. “We had a rent-controlled apartment we lived in for 15 years,” he said. “My father was the on-site manager at the apartment building, so I learned the construction trades through my experience helping my father.” By the time Acevedo graduated from the University of Southern California in 1995, he had already begun to build a business acquiring and rehabilitating apartment buildings.

Now he offers other immigrants working their way into the middle class opportunities similar to the one his father had. Sonia Lopez, 37, is one of those.

She and her husband, Trinidad, moved to the U.S. from Mexico in 1992 with their daughter, Rosalba, who is now 16. For 13 of those years, they have lived in a three-bedroom apartment near Dodger Stadium owned by Rampart Properties, where Sonia works part-time as the resident building manager. She earns $620 a month, and on top of that, the family gets a discount that brings their rent down to $833 from $1,395 per month.

With Trinidad’s income as a deliveryman for a seafood wholesaler, the couple earns about $49,440 a year, or about 81 percent of the median income for a family of five in L.A. County. Without Sonia’s manager job, the family would be paying almost 40 percent of their income toward rent on their apartment. That job, however, allows Sonia to be home for her three kids.

“If I could work, we could do more,” she said through a translator. “But because I don’t work more, I have the gift of knowing that when the kids come home, their mom makes them food, and dinner is taken care of.”

Shrinking apartment stock

For those who do have to pay market rental rates, the stock of available housing is shrinking.

About 2 million low-cost apartments were either razed or withdrawn from the rental housing stock from 1993 to 2003, shrinking this stock by nearly 13 percent. Nearly 3 million new rental units were built, representing a net gain of 1 million units. However, most of the new units targeted the upper end of the market, and more than a fifth of multifamily units built since 2001 have been targeted for sale as condominiums, leaving apartments affordable to low- and moderate-income families in short supply, according to a report from Harvard’s JCHS.

Los Angeles has lost about 9,000 rent-controlled units since the start of 2005, the Los Angeles Times reported.

Judy and Chet Mesisca live in a 104-unit building in the San Fernando Valley that the owner is attempting to convert to condominiums. As members of a renters’ group called the Coalition for Economic Survival, they’re fighting the proposed conversion, which would push them out of the building.

“We’ll have to leave the area if the building goes condo, and we’re not the only ones,” said Judy. Both work part-time in retail stores in a nearby shopping mall, though Judy can’t stand or walk for too long because of an ankle injury from a previous job, she said. The couple pays $1,069 for their two-bedroom apartment, more than half their annual income of about $25,000.

How do they manage? “You don’t,” said Judy. “You don’t take vacations, you don’t have any big outlays; basically, you don’t splurge on anything.”

Tough choices

That’s not entirely true for Karla Barnes, an elementary school teacher in Alexandria, Va., who loves to travel. The Philadelphia native lives in a one-bedroom apartment that rents for $1,050 a month, or about 21 percent of her $61,000 annual income. She also makes a $325 student loan payment each month.

Barnes teaches summer school every summer in addition to working full-time during the school year so that she can put away enough money to go on overseas vacations with her mother and sister. (Her sister, Beverly Barnes, is the executive director of Homes for Working Families.) Last year, the trio took a three-week trip to Botswana, Tanzania, and South Africa.

“It was a fabulous trip,” she said. “Because I don’t have a lot of disposable income, I save up, and I save it so I can do things like that.”

Although she’s the first to acknowledge that she’s made choices—such as becoming a teacher and taking expensive trips every few years—that have limited her financial options, Barnes sees the rising prices in the housing market closing doors for her as well. The median price for a single-family home in the Washington, D.C., metro area, where she lives, rose to $431,000 last year from $425,800 in 2005, according to the National Association of Realtors.

“It’s not like I make a little bit of money, but to me, the salary that I make should be enough,” she said. “I feel like I should be able to have more than I do.”

Back in Los Angeles, Natalie Myers—a member of the echo boom generation, which is expected to contribute heavily to growth in the renter population—has also made some choices that have limited her income, at least for the moment.

In a good month, the 25-year-old fiction writer pays 47 percent of her income for rent and utilities at the studio apartment she rents in Rouen en Normandie, a Los Angeles building owned by local developer Urban Eco Housing. In a bad month, it’s more like 60 percent.

That’s partly because she commits a steady six hours each day to work on a new novel. Her first, called CirqueDeReverie, was published in 2003.

The California native earns between $2,000 and $2,500 a month from a combination of writing and odd jobs.

In late January, Myers started waiting tables at a French restaurant for about 20 hours a week. “Thank God!” she exclaimed. “I’m making good tips.”

Although her financial situation seems precarious now, Myers is still young, and she holds out hope that in a few years things will be different. “It seems so unrealistic now,” she said, “because California has become a place where it’s almost just become a distant dream to buy a house, because it’s so expensive, but I would really, really like to be in a house by the age of 30.”

With today’s disconnect between wages and home prices, that’s still a pretty distant dream.