Study confirms 2 bdrm rentals “out of reach” for many
In March, the National Low Income Housing Coalition (NLIHC) released Out of Reach 2012, its annual side-by-side comparison of wages and rents in the United States. As we found in last year’s report, Out of Reach 2012 indicates the wide and growing gap between American families’ cost of housing and their ability to pay for it.
More specifically, the report states that in order to afford a modest, two-bedroom rental home, a family in this country needs to earn $18.25 per hour. In other words, an American family must earn a yearly wage of $37,960 – $14,910 more than the federal poverty level for a family of four – in order to afford a two-bedroom rental.
There are two terms used in the report that are important to understand: Fair Market Rent (FMR) is the 40th percentile of gross rents for typical, non-substandard rental units; Housing Wage is the estimated full-time hourly wage a household must earn to afford a decent rental unit at FMR, while spending no more than 30% of their income on housing costs.
With those definitions in mind, we found a few national findings especially interesting:
- In no state can a minimum wage worker, working a standard 40-hour work week, afford a two-bedroom unit at FMR.
- A renter earning the federal minimum wage must work 101 hours per week to afford a two-bedroom rental unit at FMR.
- The Housing Wage this year, $18.25, exceeds the average renter wage, which is $14.15 per hour, by over four dollars.
- Despite the need, the supply of low-cost rental units is shrinking!
So, what does the report tell us about Florida?
As usual, we scouted the report to see what it says about Florida and, more specifically, Central Florida. In our state, the FMR for a two-bedroom apartment is $965. In order to afford this level of rent and utilities, without paying more than 30% of their income on housing, a Florida household must earn $3,217 monthly, or $38,607 annually. Assuming a 40-hour work week, 52 weeks per year, this level of income translates into a Housing Wage of $18.56. Florida has the 15th highest Housing Wage in the country.
A minimum wage worker in Florida, earning $7.67 per hour, must work 97 hours per week, 52 weeks per year to afford the FMR for a two-bedroom apartment.
How about Central Florida?
The report states that the FMR for a two-bedroom apartment in Central Florida is $936. At $18.00, the Housing Wage in our area necessitates 2.3 minimum wage earners working 40 hours per week, year-round to afford the unit.
The NLIHC reports that the rental market is expected to continue to heat up, with more moderate income households choosing to rent. This makes even fewer housing options available to low income renters. In their words, “Affordable housing is a basic human need. Meeting the needs of low income Americans for more available and affordable housing should therefore be a top public policy priority.”
That’s why Coalition for the Homeless, with the support of our community, works to help homeless adults and families obtain the education, job skills, life skills, and other services they need to make a living wage and get back to independence!