WASHINGTON - American renters on average must earn at least $18.46 an hour to afford a modest apartment, yet the average renter makes just $13.52 an hour. This is the finding of Out of Reach 2011, a report released annually by the National Low Income Housing Coalition (NLIHC) that shows the mismatch between the rents available across the country and what low income renters can really afford.
The NLIHC finds that high unemployment, falling wages, and low rental vacancy rates driven by a post-recession return to renting have combined to put housing stability beyond the grasp of low income households across the country.
The national Housing Wage- the amount a person working full-time must earn to afford the Fair Market Rent on a modest two-bedroom unit- is just one measure calculated in the report. Out of Reach also calculates the number of hours one must work at the minimum wage and the average renter wage in order to afford typical rents. The report also provides local wage and income data for comparison purposes.
According to Out of Reach 2011, the national two-bedroom Fair Market Rent (FMR) is $960 per month. A household must earn $38,400 annually in order to afford that FMR. Other key findings include:
· The two-bedroom Housing Wage tops $30.00 in Hawaii, and is over $20.00 in 7 states: CA, MD, NJ, NY, CT, MA and AK.
· In 2011, the estimated average wage for renters in the United States is just $13.52, a significant decline from $14.44 in 2010.
· At the federal minimum wage of $7.25, a household would have to work 102 hours each week to afford the national average FMR for a two-bedroom home.
Much attention has been paid to the effect of unemployment on foreclosure rates. But the central finding of this report is that the housing crisis is the most severe for low income people. “Out of Reach 2011 shows that simply having a job doesn’t guarantee you will be able to afford even to rent,” said Sheila Crowley, President and CEO of the National Low Income Housing Coalition.
Just days before the release of Out of Reach 2011, Federal Reserve Chairman Ben Bernanke noted in an address that for many low income Americans, the hardships experienced during and after the recession are not new. “While the scale of the problems has been exceptional, many of the problems themselves are not new for lower income families and communities that were already struggling. People who were vulnerable to begin with… have had a more difficult time weathering the financial storm or recovering from setbacks,” Chairman Bernanke said in his remarks at the Federal Reserve Community Affairs Research Conference on Friday.
NLIHC has called on Congress to fund the National Housing Trust Fund, which would provide communities with funds to build, rehabilitate, and preserve rental homes to end the housing struggle of low income people. This program is not yet funded.
Extensive data for every state, metropolitan area and county in the country are available HERE. Ranking tables and maps are also available, as is further analysis and explanation of the data. The five most expensive metro areas in the U.S. are:
Metro Area Housing Wage
San Francisco, CA $35.23
Stamford-Norwalk, CT $34.83
Santa Cruz-Watsonville, CA $33.27
Honolulu, HI $32.73
Santa Clara, CA $32.73
“This year’s Out of Reach report is a reminder that millions of Americans are still waiting for economic recovery,” said Senator Tim Johnson (D-SD) in the preface of the report. “People burdened by unaffordable housing have less money for other essential needs like transportation, food, and medicine – leaving too many families facing impossible choices at the end of every month.”
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.