Rent Remains Unaffordable for Low-Wage Workers

By Donna Kimura NorthShore Magazine

The average minimum-wage worker in the United States must work 116 hours per week—nearly three full-time jobs—to afford a modest two-bedroom rental home, reports the National Low Income Housing Coalition (NLIHC).

The nation’s “housing wage” has increased to $33.63 for a modest two-bedroom apartment this year, according to the organization’s latest “Out of Reach: The High Cost of Housing” report.

The housing wage is the hourly pay a full-time worker must earn to afford a modest rental home without spending more than 30% of their income on housing costs. The figure is more than four times the federal minimum wage of $7.25 per hour.

“Housing is more than just shelter, it is foundational to well-being and dignity,” said NLIHC president and CEO Renee Willis. “This year’s ‘Out of Reach’ report shows that, despite economic gains for some, low-income renters continue to face impossible choices between paying rent and meeting basic needs. The report findings also reinforce that cutting federal housing investments would only deepen the housing crisis. Congress must protect and expand housing programs that ensure stability, opportunity, and a pathway out of poverty for millions of renters.”

The housing wage for a modest one-bedroom apartment is $28.17, according to the annual report. Last year, the housing wage for a two-bedroom apartment was $32.11 and $26.74 for a one-bedroom unit.

NLIHC’s signature report has been documenting the gap between wages and rental housing costs for more than 30 years. Other findings from this year’s study reveal that:

• The housing wage varies considerably across the country. The housing wage for a modest two-bedroom rental home in Santa Cruz County, California, for example, is $81.21—far higher than the national figure;
• Of the 25 most common jobs in the U.S., 17 pay median wages that fall below the housing wage for a one-bedroom rental and 18 pay below the two-bedroom housing wage. These 18 occupations employ approximately 74 million people—nearly half of the entire U.S. workforce;

• Higher wages alone will not solve the housing affordability crisis.Sixty-four localities have minimum wages that exceed the federal minimum wage or, where applicable, their state minimum wage. However, in each of these areas, the local minimum wage is still insufficient to cover the costs of a one-bedroom or two-bedroom home; and
• Nearly half of U.S. renter households are cost-burdened.Approximately 22.4 million renter households experience housing-cost burdens, with 12 million classified as severely cost-burdened. Eighty-seven percent of extremely low-income renters face some level of cost burden, and 75% experience severe cost burden, compared with 49% and 26% of all renters, respectively.

The report stresses that federal subsidies are critical to addressing the affordable housing needs of the lowest-income renters. Despite the need, only 1 in 4 eligible households receive housing assistance, and recent federal proposals threaten to slash housing programs.

For additional information and to download Out of Reach, visit: http://www.nlihc.org/oor.