For millions of low wage working Americans, even working two full-time jobs won’t pay the rent, because wages are falling farther behind as housing prices skyrocket.
The National Low Income Housing Coalition’s annual report on income and rental housing costs, Out of Reach, reveals that in no single jurisdiction in the United States can a minimum wage worker afford the Fair Market Rent for homes in their communities.
To afford the U.S. Median Fair Market Rent for a two-bedroom rental house or apartment, a worker would have to earn a Wage of $13.87 per hour, 269 percent of the federal minimum wage, according to the 2001 edition of the report released today.
In 33 states including Ohio and 1,237 cities and counties including Cuyahoga County, the Fair Market Rent is more than twice the prevailing minimum wage, the Coalition reported. The federal minimum wage has remained at $5.15 since 1997. During the same four years, rents have increased significantly nationwide. Today, a Median Fair Market Rent for a two-bedroom rental unit, or a household must have the equivalent of two and a half minimum wage workers.
In more expensive areas of the country, housing is even less affordable to low-wage workers. The Housing Wage needed to afford a two-bedroom unit in San Francisco is $33.60 for a San Francisco family with two minimum wage workers; they would be unable to afford a two-bedroom apartment even if each worked two full-time jobs.
In Boston, the Housing Wage is $20.21 a minimum wage worker would have to work 157 hours a week to afford a two-bedroom apartment. Although Massachusetts and California have enacted high minimum wage laws that the Federal standard, minimum wages still fall far short of making housing affordable for low wage workers.
And in most areas of the country the gap is growing. Of the 3,779 local jurisdictions examined – every county in the 50 states (in New England states, data analyzed at the town level), plus the District of Columbia and Puerto Rico – the Housing Wage increased in all but one of them, by an average of about 4.6 percent from 2000 to 2001. Five hundred local jurisdictions experienced increases of $1 per or more, and 99 of those saw increases of $2 or more.
The one jurisdiction where the Housing Wage declined was Madison County, Missouri, where dropped from $7.37 last year to $7.13 this year. Those amounts are substantially greater than the $5.15 minimum wage.
Far worse in the gap between income and housing cost for elderly and disabled people who depend on Supplement Security (SSI) as their main source of income. In Florida, for example, an SSI recipient, receiving $512 monthly, can afford monthly rent of no more than $154, while the Fair Market Rent for a one-bedroom home in Florida is $566.
Sen. Jack Reed, D-R.I., chair of the Housing and transportation Subcommittee of the Senate Banking Committee, said of the report: “Today’s affordable housing crisis is the result of both market failure and government disinvestment in housing assistance for low income families. I commend the national Low Income Housing Coalition for publishing Out of Reach and working to keep our nation’s shortage of affordable housing problem in the public eye. I intend to continue working to develop sound solutions to our affordable housing crisis and to address the serious shortcomings in current federal housing policy.”
“Our annual Out of Reach reports have drawn a stark picture of housing affordability in America today,” said Sheila Crowley, president of the National Low Income Housing Coalition. “Sound and affordable housing is the key to improving the lives of millions of people.”
The study estimates the affordability of the “fair market rents” (FMRs) established annually by the U.S. Department of Housing and Urban Development (HUD) for HUD’s Section 8 rental housing programs. They are HUD’s best estimates, based on telephone surveys and other data, of gross rents (including utilities) of “privately owned, decent, safe, and sanitary rental housing of a modest (non-luxury) nature with suitable amenities” of units for rent in American communities. FRMs are only the estimate of housing costs that are consistent across the nation
The calculations also assure the generally accepted standard of spending not more than 30% of income on housing costs.
The entire report, Out of Reach: America’s Growing Wage-Rent Disparity, is available from NLHC at 202-662-1530 and on the organization’s website at http://www.nlihc.org.
Copyright NEOCH published 2001 Issue 50