The National Low Income Housing Coalition put out its annual Out of Reach report this week. The results are pretty ugly. Rent is no longer affordable in any state. This has everything to do with wages that are too low to afford basic housing needs nationwide.
It is no wonder, then, that homelessness recently jumped 12% in the Los Angeles area, or that LA just adopted a $15 per hour minimum wage as a response. An extra 50,000 homeless on the street, with no affordable housing to relieve the pressure is a situation that can no longer be ignored. This is a national emergency.
Two excellent articles describing its highlights are curated below. My comments regarding my neck of the California woods follow.
A New Study Maps How Much Income You Need to Rent a 2-Bedroom Apartment – CityLab
Yes, the American economy is improving, and yes, we’re creating more jobs. But the hourly wages for a lot of these jobs are stagnant at best. According to the Pew Research Center, 30 percent of America’s workforce earns a near-minimum-wage salary—that’s almost 21 million people. As a cruel paradox, rents across the country keep rising.
A new report by the National Low Income Housing Coalition examines how these opposite trends play out regionally. The work maps how much an American worker needs to earn per hour in each state to rent a two-bedroom apartment. It finds that in no state can a person earning minimum wage afford such an apartment at market rent.
Rents keep rising because the demand for rentals keeps growing, and that’s partly because fewer people can afford to buy their homes today than they could before the recession. The low supply of rentals has created a situation where people who definitely can’t afford to buy are also priced out of renting.
Here’s how the report explains the impact of scarce affordable housing on low-income renters:
The tightening rental market has the most significant impact on low income renters. Many higher and middle income renters occupy units that are affordable to lower income groups, reducing the supply of affordable and available decent apartments for the lowest income renters. As a result, in 2013, for every 100 extremely low income (ELI) renter households, there were just 31 affordable and available units.
The report’s calculations back up its claim. Currently, an average American needs to earn $19.35 to afford rent on a two-bedroom unit. That’s a few dollars more than the $15.16 average hourly wage earned by the average American renters, and 2.5 times the federal minimum wage. It’s also more than the median hourly wage of the the average American worker, which is $17.09. For 13 states home to cities with skyrocketing rents—including California, Washington, New York, and Virginia—a person would have to earn well above $20 per hour to afford a two-bedroom place.
Click here to read the rest of this essential article on CityLab
In an article entitled “A full-time minimum-wage job won’t get you a 1-bedroom apartment anywhere in America,” based on the same housing report used by CityLab, Ezra Klein writes:
There is no state in the union where a full-time, minimum-wage worker can afford to rent a one-bedroom apartment for less than 30 percent of his paycheck (which is a standard measure of housing affordability).
That’s the depressing takeaway from a new report by the National Low-Income Housing Coalition. The paper includes this map tallying the hours a worker would have to put in at her job each week to rent a one-bedroom apartment without it eating more than 30 percent of her wages:
In Texas, a minimum wage worker needs to put in 73 hours a week to afford a one-bedroom unit. In California, it’s 92 hours. In the District of Columbia, it’s a solid 100 hours.
Click here to read the rest of Klein’s article
When I went to look at an in-state comparison of rental costs on the National Low Housing Coalition website that provided the report both articles are based on, I noticed that, at least for the county I live in, Orange County, California, the lowest cost for a 2-bedroom apartment is at least $400 higher than what is quoted. While my county has some pretty high-rent cities in it, there are less expensive areas and, even there, it is almost impossible to find anything to rent at or below $1700 per month, with most utilities not included. So, at least in Orange County, in order to afford a 2-bedroom apartment, one would have to earn at least $35 an hour not only to afford the rent, but also the utilities.