Minimum wage workers can’t afford rent anywhere in America

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A report from the National Coalition on Low-Income Housing shows that there is no state, county or city in the country where a full-time, minimum wage worker working 40 hours a week can afford two-bedroom rent.

A full-time minimum wage worker can afford one-bedroom rent in only 7% of all US counties — 218 of more than 3,000 nationwide.

The federal minimum wage is $7.25.

But the report showed that a worker would need to earn $24.90 an hour in order to purchase a two-bedroom home at Fair Market Rent. A $20.40 “housing fee” will be required for one bedroom. Fair market rents are government estimates of what a person should expect for a modest home in their area.

Housing wages is the amount a worker would need to earn to purchase a home without spending more than 30% of their income on rent and utilities.

Marcia L. Fudge, the United States Secretary of Housing and Urban Development, wrote in the preface that “these amounts are far above what many Americans—including senior citizens, people with disabilities, and working families—can spend on housing.” the report.

Rentals are out of reach

Nationally, the average fair market rent is $1,061 per month for a one-bedroom and $1,295 per month for a one-bedroom, according to the report.

Meanwhile, a renter’s average hourly wage is $18.78, an income that can only absorb $977 a month in rent without the cost of housing being overburdened. The report showed that a family living on one minimum income could afford as little as $377 a month.

The average renter in 17 states—including California, Florida, and New York—earns at least $5.00 less than the state’s average two-bedroom rental price.

The biggest gap is in Hawaii, where the difference between what the average renter earns and the state’s two-bedroom rent is $20.13.

And even states, the District of Columbia, and dozens of counties and municipalities with minimum wages higher than the federal minimum wage are not removing the barrier.

In California, where the minimum wage is $14 an hour, the cost of housing is so high that it still has the highest housing wage: a person in California needs to earn $39.03 an hour to buy a two-bedroom apartment and $31.06 for a one-bedroom apartment.

A minimum wage worker would have to work 89 hours each week just to have one bedroom and 112 hours to afford two bedrooms.

West Virginia has among the lowest housing wages. But with a minimum wage of $8.75 an hour, workers would still need to earn $14.83 an hour to purchase a two-bedroom apartment, and $12.12 for a one-bedroom.

The report includes an interactive map showing how much you need to earn in your area to pay rent.

The impact of the epidemic

The pandemic has exacerbated the precarious housing situation for many people, and local, state and federal governments have put in place safeguards to prevent a tidal wave of evictions. An unprecedented amount of federal emergency rental relief — $46 billion — has been earmarked to provide relief to distressed tenants and frustrated landlords.

But many will still struggle to pay rent in the future without addressing long-term housing affordability, according to the report.

7.5 million low-income renters suffer from “extreme” cost burdens — meaning they spend more than half of their income on housing, according to the report. This can put tenants at risk of homelessness. More than 580,000 people were homeless during the height of the coronavirus crisis last year, according to HUD.

The report found that housing affordability is a greater challenge for black and Latino families, as those groups are more likely to be burdened with housing costs.

During the pandemic, black and Latino workers have seen higher unemployment rates, leading to the potential for these groups to fall behind on rent, according to analysis of data released by the Census Bureau by the Center for Budget and Policy Priorities.

The NLIHC, a not-for-profit policy for the development and improvement of affordable housing, recommends expanding rental assistance to all eligible and struggling tenants and making investments in the National Housing Trust and Public Housing to create, maintain, and rehabilitate affordable homes.

It also asks Congress to establish a National Permanent Housing Stabilization Fund to provide temporary assistance to families at risk of eviction and to strengthen and enforce tenant protections, in order to maintain tenant housing.

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