Today’s Read: The Hourly Wage Needed to Rent a 2-Bedroom Apartment Is Rising
The housing affordability crisis is one of the leading drivers of homelessness. Years of skyrocketing rents and stagnant wages have pushed thousands of New Yorkers to the brink of eviction, with near-record numbers left with no option but the crowded shelter system.
According to the National Low Income Housing Coalition’s annual “Out of Reach” report, the affordability crisis is worsening nationwide. The report found that there isn’t a single state in the country in which a full-time minimum-wage worker could comfortably afford a standard one-bedroom apartment.
The situation is particularly bleak in New York City: The Fair Market Rent for a two-bedroom apartment in the New York City area is $1,571. This means that in order to afford rent and utilities without spending more than 30 percent of income on housing, a person working 40 hours per week would need to make $30.21 per hour. Put another way, a New Yorker would need to work 3.4 full-time jobs – 134 hours per week – at the current $9/hour minimum wage to afford rent.
This report underscores the urgent need to increase the supply of affordable housing – which would save hardworking families from the trauma of homelessness.
CityLab summarized the report’s national findings:
The supply of rentals, especially at the lower end of the market, has been no match for the skyrocketing demand.
That means it’s getting harder and harder for average Americans to afford a modest rental in the U.S., a new report by the National Low Income Housing Coalition finds. “The lowest-income renters without housing assistance have always struggled to afford housing, but in recent years they have become even more squeezed as more households enter the rental market,” Andrew Aurand, the vice president of research at NLIHC, tells CityLab.
In 2016, a worker would need to make $20.30 per hour to rent a two-bedroom accommodation comfortably—without devoting more than 30 percent of income on housing costs. Last year, NLIHC pegged this “housing wage” at $19.35 an hour. (And we’re not talking about luxury apartments here. The report tallies this average hourly wage against the Department of Housing and Urban Development’s Fair Market Rent, an annual estimate of what a family might pay to live in a simple apartment.)
To really understand the weight of 2016’s housing wage, consider this: The average hourly wage for Americans is actually $15.42 per the report, which is not nearly enough to afford a two-bedroom. And the federal minimum wage, at $7.25, is around a third of what’s required. That means minimum-wage workers would have to work three jobs, or 112 hours a week, to be able to afford a decent two-bedroom accommodation.