High Cost of Rental Housing in the U.S. is Out of Reach for Millions
Washington, D.C. –- (RealEstateRama) — A new report released today by the National Low Income Housing Coalition (NLIHC), Out of Reach: The High Cost of Housing, reveals that on average a full-time worker in the U.S. must earn $21.21 per hour to afford a modest two-bedroom apartment and $17.14 to afford a one-bedroom apartment. The report indicates that housing costs are “out of reach” for both for the average renter and for millions of low-wage workers, seniors and people with disabilities living on fixed incomes, and other low-income households.
Out of Reach reports on the Housing Wage – the hourly wage a full-time worker must earn to afford a modest rental home without spending more than 30% of his or her income on housing costs – for every state, county, and metropolitan area in the country. The average hourly wage of renters in the U.S. is $16.38, $4.83 lower than the two-bedroom Housing Wage and nearly $1 lower than for the one-bedroom Housing Wage.
In no state, even those where the minimum wage has been set above the federal level, can a minimum wage renter working a 40-hour work week afford a modest two-bedroom rental unit. A worker earning the federal minimum wage of $7.25 per hour would need to work 117 hours per week for 52 weeks of the year (or nearly 3 full-time jobs) to afford a modest two-bedroom rental home and 94.5 hours per week (2.4 full time jobs) to afford a modest one-bedroom apartment.
Six of the seven occupations projected to add the greatest number of new jobs by 2024 – customer service representatives, personal care aides, nursing assistants, retail salespersons, home health aides, and food prep and service workers – provide a median wage lower than the one- and two-bedroom Housing Wage. Personal care aides, for example, earn on average just $10.75 per hour and nursing assistants earn $13.04 per hour, both well below the national Housing Wage.
The five states with the highest Housing Wages are:
- Hawaii, with a two-bedroom Housing Wage of $35.20
- District of Columbia, with a two-bedroom Housing Wage of $33.58
- California, with a two -bedroom Housing Wage of $30.92
- Maryland, with a two-bedroom Housing Wage of $28.27
- New York, with a two-bedroom Housing Wage of $28.08
U.S. Representative Keith Ellison (D-MN) wrote the preface of this year’s Out of Reach. In his state, Minnesota—which ranks as the 21st most expensive state on the list—the two-bedroom Housing Wage is $18.60, $4.32 higher than the average renter’s wage in the state. “That difference means too many families must choose between paying for their shelter and buying diapers, fresh food, childcare, or medicine,” said Mr. Ellison. “These choices are only necessary because our most vulnerable communities are being held hostage by budget cuts to much-needed housing assistance and programs that are already underfunded and scarce, are being targeted by additional cuts in favor for tax breaks for the wealthy. This practice has got to stop.”
The disparity between the Housing Wage needed to afford a rental home and workers’ wages results in a shortage of 7.4 million rental homes nationwide that are affordable and available to extremely low income households. More than 11 million rental households in the U.S. are spending more than half of their incomes on their housing, and hundreds of thousands go homeless on any given night, underscoring the need for a greater investments in affordable housing solutions.
NLIHC advocates for solutions like the United for Homes campaign and Mr. Ellison’s “Common Sense Housing Investment Act” (H.R. 948), both of which call for modest reforms to the mortgage interest deduction – a tax expenditure that largely benefits wealthier homeowners who would be stably housed without the government’s support – to generate billions of dollars in savings to reinvest in affordable rental housing programs.
“Out of Reach 2017 shows why millions of low income renters are struggling to afford their homes,” said NLIHC President and CEO Diane Yentel. “We have the resources to solve the affordable housing crisis in America by rebalancing federal housing expenditures to serve our country’s most vulnerable households. We lack only the political will to do so.”
NLIHC received support from JPMorgan Chase to fund this year’s Out of Reach. “JPMorgan Chase is committed to creating lasting impact in our communities. We also believe in the incredible power of data to expand access to opportunity,” said Janis Bowdler, head of Community Development, JPMorgan Chase. “This is why we are proud to support the National Low Income Housing Coalition’s Out of Reach report – and the critical role it plays in helping all of us better understand, and tackle, the gap between wages and housing prices across the United States.”
For additional information, visit: http://www.nlihc.org/oor
Established in 1974 by Cushing N. Dolbeare, the National Low Income Housing Coalition is dedicated solely to achieving socially just public policy that assures people with the lowest incomes in the United States have affordable and decent homes.
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