July 2002 Owners Update

Housing Remains Unaffordable For Many

by Lew Sichelman

Most people realize there are millions of households in this country who cannot afford to pay for decent housing. But how of many of us actually know the extent of the affordability problem in our own communities?

Well, you can find out, thanks to the National Low Income Housing Coalition. Every year for the last decade, the 27-year-old advocacy group has produced "Out of Reach," a report that contains income and rental housing data for the 50 states and the District of Columbia by state, county, metro area and, in some cases, even town.

The study calculates the income that renter households need to afford rental housing and estimates how many of these households can or cannot afford to pay the fair market rent (FMR). It also computes what renters would need to earn to pay the rent and keep their housing costs at 30 percent of their income, the generally accepted standard for affordability established by Congress and the Department of Housing and Urban Development.

If you have a hankering to learn about the situation in your neck of the woods, you might not like what you find.

"Nowhere in the country, not in any single jurisdiction, can a full time minimum wage worker afford to pay the fair market rent for a two bedroom unit," says NLIHC President Sheila Crowley.

According to the latest report, the housing wage, which is defined as the amount per hour a full-time worker must earn to be able to afford the fair market rent for a two-bedroom apartment, averages $12.47 nationally. That's more than twice the current federally-mandated minimum wage of $5.15 an hour.

Another way to look at the issue is to consider the number of hours of minimum wage work a household must earn to afford the fair market rent. By this yardstick, it takes an average of 2.5 minimum wage workers per household to afford the two-bedroom rent.

Recognizing that the federal minimum is insufficient, 10 states and the District require a higher minimum wage The state of Washington is the highest at $6.50 hourly. But, according to the report, in no state, metropolitan area or county is the minimum wage adequate to afford the fair market rent for a two-bedroom unit.

In fact, the study found, in only three of the 3,646 counties and New England towns analyzed can a household with an income of 30 percent of the median for its area afford a two- bedroom apartment.

The least affordable metro markets are not surprising. They are led by San Francisco, where you have to earn $28.06 an hour for a two-bedroom apartment to be considered affordable. That's more than five times California's minimum wage of $5.75.

In San Jose, it takes $25.15 an hour to rent a two-bedroom unit. And in Stamford, Conn., it's $22.62. As staggering as the figures are, though, Crowley warns not to get caught up in the numbers and miss their meaning.

"We are talking about a problem of national scope, not isolated communities," she says. "The affordable housing crisis has real consequences for real people who cannot do everything they are expected to do to care for themselves and their families, let alone things they would like to do. Housing is foundational to successful family life and it is unfair to expect families to succeed in the absence of a secure place to live."

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