Support the Timberjay by making a donation.

Serving Northern St. Louis County, Minnesota

Resignation airs housing challenge for many workers

Catie Clark
Posted 3/16/23

Rachel Frey, formerly of Ely, resigned her paraprofessional job at Ely Memorial High School, effective March 10, primarily over her inability to find affordable housing in the community. …

This item is available in full to subscribers.

Please log in to continue

Log in

Resignation airs housing challenge for many workers

Posted

Rachel Frey, formerly of Ely, resigned her paraprofessional job at Ely Memorial High School, effective March 10, primarily over her inability to find affordable housing in the community.
“Finding housing in Ely is a complication that I have been unable to surpass despite lots of searching,” said Frey in her resignation letter. “My current lease is soon ending, and my rental home placed on the market.”
Frey did indeed search for a solution. She posted in the “Ely MN Rentals” group on Facebook in January that she needed to find a new place to stay through the end of May.
Ely’s rental housing market has been a challenge for years. Looking at statistics from realtor.com, there are more houses for sale in Ely than there are houses or apartments for rent. According to a canvass of currently available rentals, a one-bedroom apartment in Ely can range from $750 to around $1,000 per month. Two-bedroom apartments typically rent for more than $1,000.
A living wage
Frey’s resignation prompted the Timberjay to investigate just how much money one needs to make to afford living in Ely.
The school district hired Frey for the 2022-2023 school year. The position involved six and a half hours, five days per week. According to the American Federation of State, County and Municipal Employees Local 295, Ely paraprofessionals make between $16 to more than $17 an hour. The Timberjay used $17/hour for its analysis.
A full-time job at $17/hour is equivalent to $34,000/year when working 50 weeks per year. Total federal and state taxes, including FICA, will be $6,050 for a single filer with no children, assuming the worker takes the standard deduction for income tax. After-tax income will be $17,300/year or $1,442/month. The Timberjay used the tax calculator at smartasset.com to determine tax rates.
Using the usual rule that housing should take between a quarter to a third of one’s gross earnings, this corresponds to a monthly affordable housing cost of $708 to $935 per month. A wage of $17/hour for a single person can certainly provide enough money in Ely for a rental.
The Timberjay also looked at how little one can earn and still afford an Ely apartment with a rent of $750/month. That wage is approximately $14/hour for a single person with no dependents. This assumes, of course, that there are rentals available in Ely’s rental market, which wasn’t the case for Frey.
Not enough to live on
Frey’s problem wasn’t her wage, it was the number of hours she worked. Her paraprofessional position paid her for the 180-day school year. Using $17/hour and six and a half hours a day, this is a gross of $19,890 spread over ten months. Taking out state and federal taxes yields a take-home pay of $1,730/month for 10 months, or $1,442/month if those earnings must last for an entire year.
Using the 10-month figure and a low-ball rent of $750, this leaves $980/month for all other expenses like food, utilities, and transportation. If rent is $1,000, then there is only $730 for all other expenses.
The Timberjay looked at two different cost of living calculators to gauge how far a dollar can stretch in Ely: The Living Wage Calculator at the Massachusetts Institute of Technology (MIT) and the Cost-of-Living Calculator at the Minnesota Department of Employment and Economic Development (DEED).
The closest location for which the MIT calculator had data was Duluth, where the living wage was $15.79 for a single person with no dependents. In comparison, DEED had cost of living numbers for St. Louis County, with a living wage of $14.67.
The MIT calculator estimated that monthly housing costs averaged $666/month. DEED estimated $767, which is closer to actual rents in Ely. Both are on the low side for current market conditions.
Excluding housing and taxes, the MIT calculator estimated that all expenses other than taxes or housing were $1,676/month and the DEED calculator estimated $1,562/month. Given ongoing inflation, food costs for both calculators are low: $334 for MIT and $394 for DEED. Transportation costs were also high, which is odd since Ely is a walkable community: $446 for MIT and $729 for DEED. We suspect the DEED number was higher due to longer commutes in St. Louis Co., especially for those working in the mining industry.
What does this mean for someone like Frey working in Ely for $17/hours? If Frey was taking home a net income after taxes of $1,730/month, she would barely make ends meet if she had a rent of $750 and walked everywhere instead of using her vehicle. Raising expenses beyond that subsistence level was unaffordable.
The Timberjay reached out to Frey for comment and received no response.