Today’s Read: How Much Do You Need to Afford the Rent?
Stable housing is an essential foundation for improving health, accessing quality education, and securing steady employment, but people in communities across the country are struggling with unaffordable rents. The National Low Income Housing Coalition recently released its annual Out of Reach report, which highlights the mismatch between the wages and the price of decent rental housing in every state, metropolitan area, and county in the United States. The report underscores the severity of the national housing crisis: Nowhere in the U.S. do minimum wage full-time workers earn enough to afford a decent two-bedroom apartment. Workers in full-time minimum wage jobs could afford a one-bedroom apartment in a mere 12 counties across the country. In fact, a worker earning the Federal minimum wage of $7.25 per hour would need to work 2.9 full-time jobs, or an impossible 117 hours per week, in order to afford a two-bedroom apartment at the national average fair market rent without spending more than 30 percent of their income on housing (a standard measure of affordability).
The housing crisis is particularly severe in New York, which the report ranks as the fifth-most expensive state. For the New York City region specifically, someone earning minimum wage would have to work 113 hours per week to afford a modest one-bedroom apartment, or 130 hours per week to afford a two-bedroom apartment. Although the rising minimum wage in New York is a welcome first step, this action alone does not even come close to bridging the significant imbalance. According to the report, NYC-area workers would need to earn $27.29 per hour to afford a standard one-bedroom apartment or $31.48 for a two-bedroom apartment, but the minimum wages in the region won’t even reach $15 per hour for years. Given this reality, it’s little wonder that an estimated one-third of families with children in NYC homeless shelters have a working family member, but they remain unable to find an affordable apartment in the city.
The nationwide housing crisis clearly demands further Federal investment in deeply affordable housing – but, in blatant disregard for the urgent needs of millions of Americans, President Trump’s budget proposal would instead slash funds for the U.S. Department of Housing and Urban Development by 15 percent. At a time of unprecedented need and Federal uncertainty, it is more imperative than ever that City and State leaders make full use of scarce housing resources by targeting them to those with the greatest housing needs – specifically, the 61,277 homeless New Yorkers who have already been pushed out of the unforgiving housing market altogether.
Tracy Jan wrote about the Out of Reach report for The Washington Post:
“The gap between wages and rent is growing,” said Diane Yentel, president and CEO of the Washington-based National Low Income Housing Coalition, which has conducted similar analyses for 28 years. “There’s no doubt that the affordable housing crisis overall has increased since the foreclosure crisis in 2007.”
Those whose earnings put them below the federal poverty level cannot even afford the average cost of a one-bedroom apartment in any state. The national average rent is $892 a month for a modest one-bedroom apartment and $1,103 for a two-bedroom.
As a result, more than 11.2 million families end up spending more than half their paychecks on housing, the report said — a trade-off with other basic needs like food, transportation and medical care.
The picture is not expected to improve in the near future as the rental market remains strong and vacancy rates decline. A record 43.3 million households were renters in 2016, a 27 percent increase since 2006, the report said.
Household income, meanwhile, has not kept up with the pace of rent increases. Between the 2007 housing crisis and 2015, the average rent in the U.S. rose by 6 percent, after adjusting for inflation, while the average household income declined by 4 percent, according to the report, which analyzed Census Bureau data.