America’s mismatch between wages and rental prices is more perverse than ever.

How many hourly wages workers make enough to afford modest rents? (NLIHC)

For millions of Americans, housing costs are perversely mismatched to hourly wages. In 2017, the average U.S. worker would need to bring in a whopping $21.21 per hour to reasonably afford a modest two-bedroom apartment. That’s nearly three times the federal minimum wage of $7.25, and roughly 30 percent more than the $16.38 hourly wage that the average U.S. renter brings home.

These stark numbers come from the National Low Income Housing Coalition’s latest Out of Reach report, which maps the minimum hourly wage required to afford a modest rental based on federal Fair Market Rent (FMR) estimates. The report defines “affordable” as housing and utilities that cost no more than 30 percent of a person’s annual income—also the basic standard used by the feds. NLIHC has run these reports since 2005, and this minimum “housing wage” is rising year over year.

Remote Hawaii is an outlier for its extreme housing unaffordability, but some of the nation’s most populous states have huge shortfalls between average renter wages and “housing” wages. (NLIHC)

Even with a handful of states and cities celebrating recent “livable wage” victories (or defeats, if you ask a certain Georgia congressional candidate), there’s not a single state, county, or metro area in which a simple two-bedroom rental is affordable to a person working 40 hours per week, 52 weeks per year, at the local statutory minimum wage. And in states with particularly in-demand urban housing markets, the shortfall between rent and housing costs is particularly staggering.

For example, a FMR two-bedroom apartment in Hawaii, with the highest statewide housing costs in the nation, is $1,830. That would require earning $35.20 per hour, close to four times the state minimum wage of $9.25, and $19.56 per hour less than what the average renter there earns. In Maryland, a simple two-bedroom costs considerably less on average—$1,470 per month—but renters would still need to draw in $28.27 per hour to afford it.

The twelves counties in Oregon, Arizona, and Washington where a one-bedroom apartment is affordable to minimum wage workers (shown in yellow) are largely rural, far from job centers. (NLIHC)

In only 12 counties in Washington, Arizona, and Oregon (all states with minimum wages above the federal standard) can that worker afford a modest one-bedroom unit. Almost all of these are in sparsely populated rural areas, far from job centers. More than 76 percent of renter households reside in a county or metro area where it takes more than 60 hours per week of full-time, minimum-wage work to reasonably afford even a one-bedroom unit. In California, the nation’s most populous state, it would take 92 hours. In Virginia, it would take 109.

More than 2 million U.S. workers are paid wages at or below the federal minimum, according to the Bureau of Labor Statistics. That represents nearly 3 percent of all workers paid hourly. For these workers, the affordable housing pinch is most acute. The struggle is real for the rest, too. Americans earning median wages in many of the country’s fastest-growing occupations—customer service agents, nursing assistants, health aides, retail workers—aren’t making enough to manage even a one-bedroom without dumping more than 30 percent of their income.     

Of the seven fastest-growing jobs, only nurses make enough to reasonably afford rent. (NLIHC)

What gives? Rents are declining in some of the priciest American cities; it seems the luxury rental bubble has finally sprung a leak. But a persistent shortage of affordable units is still pinching renters in lower income brackets. Fewer families are buying homes, often due to a lack of access to mortgage credit or insufficient savings for a downpayment. Demand for rentals continues to surge, and households across the income spectrum are competing for the same scarce units. Low-wage workers have seen pay increases over the past two years, but those haven’t kept up with the cost of living through an affordable housing crisis with no end in sight.

About the Author

Most Popular

  1. Stella Bowles stands on a riverbank.
    Environment

    How One Kid Stopped the Contamination of a River

    To halt the illegal flow of raw sewage into Nova Scotia’s LaHave River, it took a determined 11-year-old with water samples and a Facebook page.

  2. The Amazon spheres in Seattle
    Equity

    Righting the Wrongs of Amazon HQ2

    What should or could cities do differently next time a behemoth company solicits bids for for its headquarters?

  3. Illustration of a house with separate activities taking place in different rooms.
    POV

    The Case for Rooms

    It’s time to end the tyranny of open-concept interior design.

  4. An LAPD officer looks in a tent on Skid Row in Los Angeles, California.
    Equity

    The Homelessness Problem We Don’t Talk About

    The barriers formerly incarcerated people face are creating a housing crisis—and no one is paying attention.

  5. Equity

    Ben Carson Is a YIMBY Now and Everything's Confusing

    The HUD secretary's new attempt to roll back an Obama-era fair-housing rule has him wading into battle against exclusionary zoning.