Today’s Read: A Minimum-Wage Worker Can’t Afford a 2-Bedroom Apartment Anywhere in the U.S.
The persistent housing affordability crisis is the underlying driver of record homelessness. As rents continue to rise across the city, more and more New Yorkers are struggling to keep up. Many are one missed paycheck away from homelessness, and an estimated one-third of families with children in shelters include a working family member. Meanwhile, Mayor de Blasio has dedicated a paltry 5 percent of his 300,000-unit Housing New York 2.0 plan to housing homeless households, making it incredibly difficult for people to move out of shelters and into permanent, affordable housing.
The National Low Income Housing Coalition’s annual Out of Reach report shows that the lack of affordable housing is not limited to large cities like New York. NLIHC found that there is no county in the United States where a full-time worker earning the Federal minimum wage or prevailing state minimum wage could afford a two-bedroom rental home at fair market rent while working 40 hours per week.
The report details a particularly dire situation in the New York City region. The 2018 Fair Market Rent for a 1-bedroom apartment is $1,558 in the NYC area, and it is $1,789 for a 2-bedroom apartment. A person earning the minimum wage would need to work 115 hours per week to afford a 1-bedroom apartment or 132 hours per week to afford a 2-bedroom apartment. A “housing wage” for a 1-bedroom apartment – the hourly wage a full-time worker must earn to afford a modest rental home without spending more than 30 percent of income on housing costs – would be $29.96, and for a 2-bedroom apartment it would be $34.40. New York is phasing in a $15 hourly minimum wage following a successful campaign by anti-poverty advocates, but even this increase will not enable working families to comfortably afford rent. The worsening housing affordability crisis demands urgent solutions by all levels of government, or even more families and individuals will be forced out of their homes and into shelters or the streets.
Tracy Jan covered the NLIHC report for The Washington Post:
“The housing crisis is growing, especially for the lowest-income workers,” said Diane Yentel, president of the National Low Income Housing Coalition. “The rents are far out of reach from what the average renter is earning.”
Downsizing to a one-bedroom apartment will only help so much.
According to the report, a one-bedroom is affordable for minimum-wage workers in only 22 counties in five states: Arizona, California, Colorado, Oregon and Washington. Those states all set their minimum wages higher than the federal minimum of $7.25.
Nationally, one would have to earn $17.90 an hour to afford a modest one-bedroom apartment or $22.10 an hour for a two-bedroom rental. That’s based on the common budgeting standard of spending a maximum of 30 percent of income on housing.
The report estimates that renters nationally make an average of $16.88 an hour. That means even those making above minimum wage struggle to afford rent.
Housing costs have continued to rise with growing demand for rental housing in the decade since the Great Recession. At the same time, new rental construction has tilted toward the luxury market because of increasingly high development costs, the report said. The number of homes renting for $2,000 or more per month nearly doubled between 2005 and 2015.
“While the housing market may have recovered for many, we are nonetheless experiencing an affordable housing crisis, especially for very low-income families,” Sen. Bernie Sanders (I-Vt.) said in the report.