Housing costs busting family budgets

The Chicago Tribune reports:

Maria Elena Salvedra and her husband bought their first home, a two-flat in the Pilsen neighborhood, in 2001. The next year, as they scrambled to keep up with payments, they moved into the cramped basement so they could rent out both the first and second floors.

They are among a growing number of Chicago-area residents who spend more than a third of their gross income on housing, crossing a traditional threshold of affordability, according to a new U.S. Census Bureau report for release Tuesday.

The portion of homeowners in the six-county area spending more than 35 percent of their household income on housing costs jumped from 17 percent in 2000 to 28 percent in 2005, the survey shows.

Renters also stretched--the percent spending more than a third of their monthly gross income jumped from 29 percent in 2000 to 40 percent in 2005.

Reasons range from rising interest rates to increasing taxes to ambitious buying during the superheated real estate market prior to 2005, which sent home prices soaring.

An area that's lost population,has increases costs.Land-use restrictions and zoning have wiped out the middle class in this area.We doubt the trend can continue.What business wants to expand in an area like this?