Here’s the hourly rate you need to afford a two-bedroom apartment in every state (Hint: it’s a lot more than $7.25/hr…or $15/hr)

Nlich.org. Click for full graphic
Hourly wage required to afford a typical two-bedroom apartment in each state. Nlich.org-click for full graphic.

You probably won’t be surprised to hear that there isn’t a single state in the U.S. where a worker earning minimum wage can afford the rent for a two-bedroom apartment — or, for that matter, a one-bedroom apartment. You might be surprised to learn that there isn’t a state where renters earning average pay can afford a two-bedroom apartment, either.

(This story is part of my Restless Project: Why Americans Can’t Sleep at Night.)

The National Low Income Housing Coalition crunched the numbers recently and found that a toxic mix of stagnant wages and rising rents has made things really difficult on a wide swath of U.S. wage-earners. It calculated a “housing wage” by determining how much workers would have to earn hourly to afford a “fair market rent” apartment for 30% of their income. By that measure, the national housing wage is $20.30 for a two-bedroom unit and $16.35 for a one bedroom — both far above even recently increased minimum wages.

But in many parts of the country, the numbers are even bleaker. Near Washington, D.C., the two-bedroom rental wage is about $31 an hour. In New York, it’s $27. In Maryland, it’s $26. In fact, in six staes and D.C., the housing wage is north of $25 an hour, the report says.

(This story first appeared on Credit.com. Read it there.)

Another way of expressing the same problem: Using the national rates, a worker earning the federal minimum wage of $7.25 per hour would need to work 2.8 full time jobs, or approximately 112 hours per week, to afford a two-bedroom apartment. That renter would need to work 90 hours to afford a one-bedroom, according to the report.

“In only twelve counties and one metropolitan area is the prevailing minimum wage sufficient to afford a modest one-bedroom apartment,” the report says. Those regions are all in West Virginia and Washington state.

Meanwhile, the average hourly wage of renters in the U.S. is $15.42, which is $4.88 less than the two-bedroom housing wage.

“In no state is the mean renter wage sufficient to afford a two-bedroom apartment at the fair market rate,” the report points out.

Here’s one example of the troubling numbers at work:

In Washington state, fair market rent on a two-bedroom apartment is $1,203. That means a worker needs annual earnings of about $48,000 to afford that unit, or $23.13 per hour. Based on the state minimum wage, a worker would need 2.4 jobs full-time jobs to afford that. The real average renter wage in Washington is just $16.69, meaning a worker with an average-pay job needs 1.4 jobs to afford a two-bedroom place. In King and Snohomish counties, the region’s most expensive areas, the housing wage is much higher: $29.29.

Part of the problem is skyrocketing rents due to high demand and low supply. Vacancy rates are at their lowest levels since 1985, and rents have risen at an annual rate of 3.5%, the fastest pace in three decades, according to the housing group.

Another part of the problem I’ve written about before: Builders are less interested in constructing medium-prices housing at the moment for numerous economic reasons, preferring mostly high-end construction. This impacts availability of starter homes and rental units.

The National Low Income Housing Coalition says it is using a trust fund to help communities build and rehabilitate affordable rental homes.

“It is also critical to preserve and improve the nation’s public housing stock, expand the number of housing vouchers, and increase funding for other programs providing affordable housing to truly end this crisis,” the report says.

What is the housing wage for your state? You can find out on the map on this page. Remember that your earnings are only one of many things that determine your ability to find housing. Your potential landlord will probably look at a version of your credit report as part of your rental application, and badcredit rating or a history of payment problems could make it harder to find a place to live. A pasteviction could be really problematic, as well, though it may not be a deal breaker.

It’s a good idea to review your credit before looking for housing, so you can check it for errors as well as be upfront about anything a landlord may find during a credit review. To keep track of where you stand, you can get a free credit report summary, updated monthly, on Credit.com.

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About Bob Sullivan 1371 Articles
BOB SULLIVAN is a veteran journalist and the author of four books, including the 2008 New York Times Best-Seller, Gotcha Capitalism, and the 2010 New York Times Best Seller, Stop Getting Ripped Off! His latest, The Plateau Effect, was published in 2013, and as a paperback, called Getting Unstuck in 2014. He has won the Society of Professional Journalists prestigious Public Service award, a Peabody award, and The Consumer Federation of America Betty Furness award, and been given Consumer Action’s Consumer Excellence Award.

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