In order to afford the fair market rent on a two-bedroom apartment, a family needs to earn an average "housing wage" of $18.44 per hour, up from $17.84 in 2009, according to the NLIHC. Conversely, the estimated average hourly wage for renters in the US has declined from $14.69 last year to $14.44.
"There's now a larger gap between what people earn and what they need to afford decent rental housing," NLIHC research analyst Megan DeCrappeo said in Wednesday's conference call. This situation prevails despite last year's increase in the federal minimum wage, DeCrappeo said. At that minimum of $7.25 per hour, a household would need to work 102 hours per week in order to afford the average FMR of $959 per month on a two-bedroom unit, the NLIHC says.
In nine states and the District of Columbia, the average housing wage exceeds $20. Alaska and Florida are new this year to the list, which also includes Hawaii, California, Maryland, New Jersey, New York, Massachusetts and Connecticut. The most expensive metro area in the US in terms of housing wage is Stamford-Norwalk, CT, at $34.62. It's followed by San Francisco, Honolulu, Santa Cruz-Watsonville, CA and Westchester County, NY.
Adding to the gap, said co-director Dean Baker of the Center for Economic Policy and Research, is a vast supply of vacant stock that's not affordable to low-income families. "It's a case of water, water everywhere, but not a drop to drink," Baker said during Wednesday's call.
To help narrow the gap, the NLIHC has endorsed providing monies for the National Housing Trust Fund, which Congress enacted two years ago but remains unfunded. Providing $1 billion for the NHTF "will help address the growing shortage of affordable housing, which is one of the most serious economic problems facing the country," Crowley says in a release. "In addition, the NHTF would create new jobs. Every $1 billion provided to the Trust Fund will support the immediate construction of 10,000 rental homes, creating 15,100 new construction jobs and 3,800 new jobs in ongoing operations."
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Paul Bubny
Paul Bubny is managing editor of Real Estate Forum and GlobeSt.com. He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.
