Affordable Housing: For many Americans, it's Out of Reach

written by naehblog
April 21, 2010

Today, the National Low-Income Housing Coalition (NLIHC) released Out of Reach, an annual analysis of the cost of rental housing in the United States.

In order to understand the report, it’s important to establish two things:

  • “Fair Market Rent” refers to the national average cost of a rental unit; it usually refers to a two-bedroom unit.
  • ”Housing Wage” refers to the hourly wage a person must earn – working full-time – in order to afford Fair Market Rent.

The report found that a family needs to earn $18.44 per hour in order to afford a modest rental, two-bedroom home in the United States. This amounts to $38,360 per year - $16,310 more than the federal poverty level for a family of four.

Key findings of the report include:

  • In 2010, the estimated average wage for renters in the United States is $14.44 – a decline from $14.69 in 2009;
  • At the federal minimum wage of $7.25, a household would have top work 102 hours a week to afford the national average FMR;
  • There is no county in the United States in which a full-time minimum wage worker can afford even a one-bedroom apartment at FMR.

The report also found that the two-bedroom Housing Wage topped $20 in 10 states, including the District of Columbia, California, New York, Florida, and Hawaii. The five most expensive metro areas included San Francisco (CA), Honolulu (HI), Stamford-Norwalk (CT), San Cruz-Watsonville (CA), and Westchester County (NY) – the housing wage for each of those areas topped $30 per hour.

In their report, the NLIHC calls upon Congress to allocate $1 billion to the National Housing Trust Fund, a federal program that, once capitalized, could provide funds to build, preserve, and rehabilitate rental homes accessible for very low-income households.

From our perspective, this report shows that the most vulnerable residents of the United States are struggling to maintain housing. The risk of homelessness becomes more and more salient as rental rates rise and wages fall, especially for those already on the precarious brink of economic stability.

What this report demonstrates is the necessity of approaching the problem: we are now living in a country where the FMR of a two-bedroom apartment is just under $40,000 a year. We are now living in a country where a person earning the federal minimum wage requires a person to work 102 hours/week to sustain housing. We are now living in a country where, in some places, the Housing Wage for a two-bedroom apartment is over $60,000 per year.

In such a reality, it’s little wonder that the lowest-income individuals and families are at real risk of experiencing homelessness.

Luckily, the solution is clear. The Alliance stands firmly besides NLIHC in their call for a greater investment in affordable housing. Homelessness – at it’s very root – stems from the inability to afford housing and therein lies the solution. With a sufficient supply of affordable housing, we can provide everyone a place to call home.

Many thanks to the NLIHC for this important report. For more information about the findings - and to see data on the Housing Wage and FMR in your community – check out their website.