Minimum-Wage Earners Can't Afford 2-Bedroom Rentals in U.S.

Ivan Schwartz
June 15, 2018

There is no state, metropolitan area or county in the US where workers earning minimum wage can afford a two-bedroom rental home by working 40 hours a week, according to the study.

Statewide, Hawaii residents need to earn $36.13 per hour, or $75,150 annually to rent a two-bedroom residence - more than any other state.

The numbers are the latest distressing signal about the booming city's lack of affordability for people making below a certain amount, especially those trying to survive on minimum wage. And in the Boston-Cambridge-Quincy metropolitan area, almost five dollars an hour more is needed than the state figure, at $33.46 ($69,600 a year). Six-figure salaries considered low income in some Bay Area countiesThat's according to a study by the National Low Income Housing Coalition, an affordable housing advocacy group.

The report also looks at the effect of occupation and government programs and policies on housing costs and worker wages. It's all detailed in Out of Reach 2018, a new report from the National Low Income Housing Coalition.

The report found that someone working full-time at the federal minimum wage of $7.25 an hour would need to work approximately 122 hours per week for all 52 weeks of the year (the equivalent of three full-time jobs) in order to afford a two-bedroom apartment at the national average. In Honolulu, residents earning minimum wage need to work 3.9 full-time jobs to afford a two-bedroom at fair market rent.

The disparity is starkest in major metropolitan areas. "The rents are far out of reach from what the average renter is earning".

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One-bedroom apartments are affordable in just 22 counties in five states: Arizona, California, Colorado, Oregon, and Washington. The city is one of many now buckling under rising housing costs, Seattle's having been propelled in part by the same corporations that fought against the tax. That's based on the common budgeting standard of spending a maximum of 30 percent of income on housing. At the same time, new rental construction has tilted toward the luxury market because of increasingly high development costs, the report said.

According to the Joint Center for Housing Studies (2017), the number of homes renting for $2,000 or more per month increased by 97% between 2005 and 2015 with the new development of high-end apartments and rising rents of existing apartments. Bernie Sanders wrote in the report's preface.

The low-wage workforce is projected to grow over the next decade, particularly in service-sector jobs such as personal-care aides and food-preparation workers.

City officials have been considering the so-called Smart Housing Mix - a policy that would require developers to reserve some apartments in large complexes for low-income residents - for almost two years but have not finalized those plans.

Carson said the proposal would help address rising costs of providing housing assistance, which he said now helps only one in four families who qualify.

Other reports by GizPress

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