This article was originally published at 5:10 p.m. EST on July 12, 2017. It has been updated with comments from Andrew Aurand, the National Low Income Housing Coalition VP for Research.
Despite the Federal Reserve's recent decision to raise interest rates, wages across the country have mostly stagnated. So, although several states have voted to increase their minimum wages over the last year (unlike Missouri, where Governor Eric Greitens will allow the standard to roll back to $7.70/hour from $10), American workers are still struggling to find reliable housing that meet their budgets. The 2017 Out of Reach report from the National Low Income Housing Coalition (NLIHC) shows that the discrepancy between wages and affordable housing is reaching critical levels.
"This year’s report shows that housing affordability continues to be a significant challenge for low wage workers. It makes a compelling case that the problem is national in scope and is not limited just to urban areas or places with high housing costs," Andrew Aurand, the NLIHC VP for Research wrote in an email to Refinery29. "Even jurisdictions with lower-than-average housing costs are not immune to a shortage of affordable rental homes, because these jurisdictions tend to have less vibrant economies and lower-than-average household incomes, meaning housing is still out of reach for too many renters."
As reported in CityLab, NLHIC's reports have shown that the "minimum 'housing wage' is rising year over year." The organization defines a "housing wage" as the full-time earnings per hour needed to rent an affordable home. (They define "affordable" as rent and utilities that cost no more than 30% of a household's gross income.) This year, the NLHIC found that the national housing wage is $21.21 per hour for a two-bedroom rental home — nearly three times higher than the federal minimum wage, which is $7.25 per hour.
Additionally, "the 2017 Housing Wage for a one-bedroom rental home is $17.14, or 2.4 times higher than the federal minimum wage," the report says. "A full-time worker earning the minimum wage needs to work 117 hours per week for all 52 weeks of the year to afford a two-bedroom rental home or 94.5 hours per week for a one-bedroom rental home."
The organization paints a pretty dismal picture of workers' ability to support themselves, take care of their needs, and have affordable shelter. Here are some of the key findings:
People who need affordable housing the most have the fewest options.
The NLIHC report explains that more than 11.2 million "severely cost-burdened" renter households spend over half of their income on housing, often resulting in unfortunate tradeoffs to make ends meet. (Think: rent or food? Rent or transportation? Rent or medical care? Not to mention payday loans.)
Additionally, "extremely low income (ELI) households account for nearly 73% of all severely cost-burdened renters." So, the idea of simply moving to locations where the cost of living is lower is out of touch, as those workers are unable to afford the average cost of a modest one-bedroom rental home in any state. That fact isn't a stretch by any means.
The popularity of the New York City housing lottery, in which one opening can receive upwards of 100,000 online applications, is one example of the dire need for truly affordable housing in one urban area. NLIHC's findings illustrate parallels of the same problem that across the country. In Hawaii, for example, the average renter would need to earn nearly $20 more per hour to be able to afford a two-bedroom apartment.
Sadly, the situation across the country isn't much better.
"Affordable housing is not just an urban issue. It’s an urban, suburban, and rural issue," Aurand says. "These 12 counties, where a full-time minimum-wage worker could afford a modest one-bedroom apartment, are located in states with a minimum wage higher than the federal level. A higher minimum wage is important, but won’t solve the housing crisis. In no county can a full-time minimum-wage worker afford a two-bedroom apartment, which is important for someone supporting a family. In many communities, even the average renter’s wage is insufficient to afford a two-bedroom apartment."
Only three states provide truly affordable housing.
According to the NLIHC, a full-time worker earning minimum wage can afford a one-bedroom rental home in only 12 counties. All 12 are located in Arizona, Oregon, and Washington state. As the organization points out, all three states have set their minimum wage higher than the federal level. ($10 per hour in Arizona; $10 - $11.25 with additional increases pending in Oregon; and $11 per hour in Washington, with some variations by locality — and ongoing debates.)
However, what most workers are actually able to afford based on what they make looks vastly different.
The fastest-growing jobs don't offer livable wages.
By all measures, jobs in healthcare are projected to grow the fastest in the coming years. The Bureau of Labor Statistics (BLS) indicates that between 2014-2024, home health aides, physical therapist aides, and registered nurses can expect the job market to boom. Personal care aides in particular will see their field grow, to the tune of 26%, "much faster than the average for all occupations," according to the BLS.
However, the BLS notes that median pay in 2016 for personal care aides was $21,920 per year, and $10.54 per hour. (Or as high as $10.75 per hour, according to NLIHC's reporting of 2017 figures from the Bureau.) Those figures are far below the estimated one-bedroom housing wage.
To make headway on these challenges, the NLIHC proposes tax reform legislation that benefits lower-income workers. They also endorse the Ending Homelessness Act of 2017 reintroduced by Rep. Maxine Waters — who recently slammed Housing and Urban Development Secretary Ben Carson, making it clear that change on behalf of workers who need it most will likely be an uphill battle.
"We believe federal housing expenditures can be rebalanced to meet the housing needs of low wage workers and their families through modest reforms to the mortgage interest deduction, which in its current state mostly benefits higher-income homeowners," Aurand says. "More than 31 local events are planned across the country between July 22 and 29 to push lawmakers to not only oppose cuts to affordable housing programs, but to increase resources that are so desperately needed. We know how to solve the housing shortage for low income families, but we must find the political will to do it."