On March 24, the National Low Income Housing Coalition released Out of Reach 2014. This is the 25th anniversary of Out of Reach. The first Out of Reach was published in 1989.
This year, the national two-bedroom Housing Wage of $18.92. The Housing Wage represents the hourly wage a full-time worker must earn in order to afford a modest rental home while spending no more than 30% of their income toward housing costs. This means that nationally a household must have income of least $39,360 a year in order to afford a two-bedroom unit at the Fair Market Rent (FMR) of $984 per month.
Wages of renters continue to fall short of housing costs. The average renter in the U.S. earns $14.64, $4.28 less than the national two-bedroom Housing Wage and fifty-one cents less than the one-bedroom Housing Wage of $15.15.
Extremely low income (ELI) households, those with incomes of 30% or less of the area median (AMI), comprise one out of every four renters, and fare even worse when seeking affordable housing. ELI renter households are only able to afford rents of $493 a month, far less than the two-bedroom FMR of $984 and the one-bedroom FMR of $788.
A full time worker earning the federal minimum wage of $7.25 an hour can afford just $377 per month in rent. A minimum wage earner would need to work 104 hours per week, or have 2.6 jobs earning the minimum wage, to afford a two-bedroom rental unit. While Congress and some states are considering raising the minimum wage from $7.25 to $10.10 over the next three-and-a-half years, this wage would still fall short of the Housing Wage of $18.92. Housing will still be out of reach for low wage workers in every state in the nation.
While the national data illustrate the gap between what people earn and what housing costs, the data that are the most useful for housing advocates are those that tell the state and local story. The five states with the highest two-bedroom Housing Wage are: Hawaii ($31.54); District of Columbia ($28.25); California ($26.04); Maryland ($24.94); and New Jersey ($24.92).
The report was released in a press conference with NLIHC President and CEO Sheila Crowley, NLIHC Research Analyst Althea Arnold, and Director of Housing Policy at Consumer Federation of America and former president of NLIHC, Barry Zigas. Mr. Zigas headed NLIHC in 1989 when the first Out of Reach was issued. He discussed the origins of the report. Ms. Crowley emphasized the importance of increasing the affordable housing stock for low income renters through an adequately funded National Housing Trust Fund.
As has been the case each year, Out of Reach attracts considerable media coverage. In the week of its release this year, the report was covered by the Washington Post, USA Today, Huffington Post, CNN, and dozens of state and local print, television, and radio outlets.