NLIHC Releases “Out of Reach 2016” Housing Report
The National Low Income Housing Coalition recently released its “Out of Reach 2016” housing report. The annual report documents the gap between wages and housing prices across the country. The report finds that in no state, metro area, or county can a full-time worker afford a modest two-bedroom apartment with a job paying the prevailing minimum wage.
The national two-bedroom Housing Wage, the hourly wage a full-time worker must earn to afford a modest two-bedroom apartment while spending no more than 30 percent of household income on rent and utilities, is $20.30 per hour. A household must have income of at least $42,240 per year in order to afford a two-bedroom unit at a HUD Fair Market Rent (FMR) of $1,056 per month. And in six states and the District of Columbia, the Housing Wage exceeds $25 per hour.
The average renter in the U.S. earns $15.42 per hour, $4.88 per hour less than the national two-bedroom Housing Wage and nearly $1 per hour less than the one-bedroom Housing Wage of $16.35 per hour. Someone earning the federal minimum wage of $7.25 would need to work 112 hours per week, or 2.8 full-time jobs, to afford a two-bedroom rental unit and 90 hours per week, or 2.3 full-time jobs to afford a one-bedroom unit. Even in states and localities with a minimum wage higher than the federal level, the minimum wage was less than the average one-bedroom housing wage.
Extremely low income (ELI) households, those with incomes at or below 30 percent of the area median income (AMI), comprise one out of every four renters and face daunting challenges finding affordable housing. Nationally, ELI renter households are able to afford rents of only $507 per month, far less than the monthly FMR for a two-bedroom unit of $1,056 or a one-bedroom unit of $850. As a result, 75 percent of ELI renter households—7.8 million households—are severely cost burdened, spending more than half of their earnings on housing and utilities.