Cost of living going up

Housing, insurance taking ever-larger bite

By MELISSA M. SCALLAN
mmscallan@sunherald.com

BILOXI --

In recent years, when officials at Mississippi Power hired interns, they gave these employees a $400-per-month housing allowance.

With rent soaring after Hurricane Katrina the company has had to double that figure.

And that's only one example of changes companies have had to make because of increases in the cost of living. Since the storm officials at Mississippi Power and other businesses along the Coast have had to beef up salaries and incentive packages to lure employees here.

It isn't just that people don't want to live in a hurricane-ravaged area where shopping, eating and entertainment opportunities aren't what they were two years ago; rather the cost of living has skyrocketed to the point that many people can't afford to live here.

In fact, according to the Economic Research Institute in Redmond, Wash., the cost of living in Biloxi is now higher than the national average at 102.5 percent. In other Coast cities, the gap between salaries and cost of living is growing more narrow, making it difficult for people to make ends meet.

In Gulfport a person making $36,000 is making 87 percent of the national average in salary, yet the cost of living is 91 percent of the national average.

The company calculates cost of living every quarter based various factors including insurance, housing, transportation, health care and food.

For example, according to the figures released this quarter, someone making $36,000 a year in Biloxi actually needs nearly $37,000 to cover the higher costs.

Housing is the main reason it has become much more expensive to live in South Mississippi, experts say. Insurance costs have escalated, making it more difficult to buy a home, and rent also has gone up because of the scarcity of apartments and houses.

Realtor Ray Gonzales told the Sun Herald Business Roundtable last week only 20 percent of closings this year were on homes that cost less than $100,000. About 65 percent of homes sold cost between $100,000 and $200,000.

Rent also has gone up at apartments throughout the Coast. Some who paid $600 a month for a one-bedroom apartment before Katrina now pay more than $800, with rent at some places going up by $100 each year.

"The housing industry is a huge one for us and businesses across the Coast," said Rufus Smith, director of Human Resources for Mississippi Power. "Even moving someone from Laurel to Gulfport can be a huge problem."

Smith said the power company has increased the number of days it will pay for transitional housing and sometimes gives bigger signing bonuses than in the past.