Derek Ellis, a 27-year-old Iraq veteran, remembers paying $395 a month for a nice apartment in North Carolina five years ago. Now he has to scrape together $889 a month to rent a two-bedroom unit at the Peachtree Apartments in Norwich.

“My wife and I don't go anywhere,” Ellis said in a phone interview Monday. “We're lucky to go out to dinner once a month. I haven't been to a movie in two years. At the grocery store, basically everything is generic and off-brand.”

Such is the life of renters in the Norwich-New London area, who must earn at least $17.81 an hour to afford a modest two-bedroom apartment, according to a report issued Monday by the Connecticut Housing Coalition.

The group also pointed out that the average wage of local renters is only $14.11 an hour.

Put in other terms, New London County families can comfortably afford a monthly rental of $734 but must somehow stretch their salaries to pay $926 for a moderately priced two-bedroom apartment. The numbers assume only one wage earner per household.

For families earning minimum wage, this would mean having to work nearly two-and-a-half full-time jobs, stated the annual report, titled “Out of Reach,” which was prepared by the National Low Income Housing Coalition.

“Since the year 2000, the cost of a two-bedroom apartment has gone up 40 percent,” said Jeffrey Freiser, executive director of the Connecticut Housing Coalition.

Freiser admitted that recent softness in the rental market related to foreclosures has started driving down some housing costs, but he doubted the impact would be large enough to help working families much.

While none of the affordable-housing proponents mentioned landlords as being part of the problem, Ira Turner, a patent attorney who owns three buildings in Norwich, pointed out that high taxes, costly insurance, expensive maintenance and protracted procedures in Connecticut's small-claims court contribute to keeping rents high, as does the skyrocketing cost of oil for some whose heat is included in their rent.

“When you combine competition from distressed real estate, the fact that many tenants are wise to the fact that landlords have little recourse to (make) debtors (pay), and the price of energy, do you really think rents are too high?” he said in an e-mail. “As a landlord, I think the idea of rent being too high is nuts.”

Statewide, renters account for 404,000 households. Nearly a quarter of renters — 97,000 — spend more than half their income on housing. The situation in eastern Connecticut isn't quite so bad: Of the 70,617 renter households in the Second Congressional District, 9,312 are considered to be severely stretched on their rental costs.

“These people are this close to being homeless,” said David Fink, policy director for the statewide Partnership for Strong Communities.

The need for affordable housing goes to the core of local communities, which must find people to fill healthcare, public-safety and education positions, among others, Fink said. He added that estimates indicate that nearly three-quarters of all new jobs created over the next six years will pay $40,000 or less, in today's dollars.

The “housing wage” — an amount a person would have to earn to afford a moderately priced apartment using only 30 percent of wages — puts nearly half of Connecticut's occupations below the threshold of having sufficient income to afford an apartment, according to the coalition.

“Young adults are leaving Connecticut because they can't afford to live here,” said Freiser. “Businesses decide not to come to Connecticut because their employees can't afford to pay the rent or buy a home. We need housing that's affordable if we want thriving families and a growing economy.”

“It's Economics 101; it's strictly a factor of supply and demand,” said Fink of the housing market. “The bottom line is that the only way you solve this huge problem is to create more supply.”

To that end, Fink's organization helped push the HomeConnecticut program through the state legislature last year. The program gives financial incentives to municipalities that allow mixed-income developments that require at least 20 percent of units to be affordable, and so far New London, Montville and East Lyme have bought into the program locally, according to Fink.

A similar program in Massachusetts has resulted in more than 7,300 units of affordable housing being built, he added.

Connecticut is the seventh least affordable rental housing market in the country overall, and the Stamford-Norwalk metropolitan area is the most expensive market in the country with a housing wage of $31.58 an hour. More rural regions of Connecticut rank the state as the fifth least affordable for renters.

The Connecticut Housing Coalition used the report to launch a renewed call for a National Housing Trust Fund. The U.S. House passed the legislation, but the Senate has yet to act.

“The National Housing Trust Fund is exactly the shot in the arm that we need now, as the economy worsens,” said Freiser. “Housing activity is a powerful economic stimulus, and families urgently need help with their housing situations.”

Jane Dauphinais, director of the Southeastern Connecticut Housing Alliance, said she believes some municipalities have seen the light. East Lyme is currently building work-force housing on Hope Street, she pointed out, and Montville is moving in the right direction as well, thanks to its planner, Marcia Vlaun. Stonington and North Stonington are working on affordable-housing plans too, she said, and Waterford remains open-minded.

“The subprime (mortgage) issue is only exacerbating the need for rental housing,” she said, as people with foreclosed homes re-enter the apartment market.

While some people seem to think rental housing and higher densities will add to already overburdened school systems, Dauphinais said this is not true. It takes 25 one-bedroom apartments to add a single child to the school system, and it takes four two-bedroom units to make the same impact, she said.

“Towns need to identify sections in town where higher density is a positive,” Dauphinais said.

As an example, she said, Groton has recently identified four mixed-use zones that would be appropriate for residential construction.

Any solution, added Fink of the Partnership for Strong Communities, must take into consideration the “not in my backyard” mentality spawned by previous failed experiments in affordable housing, such as the warehousing of low-income people in projects. Until people get past the incorrect impression that crime and declining property values go hand-in-hand with affordable housing, Fink suggested, nothing will get done.

“The problem we have,” he said, “is this morass of myths we have to work through.”

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