About the Report
Out of Reach documents the gap between renters’ wages and the cost of rental housing. The report’s Housing Wage is the hourly wage a full-time worker must earn to afford a modest rental home without spending more than 30% of his or her income on housing costs. It is based on HUD’s Fair Market Rent (FMR), which is an estimate of what a family moving today can expect to pay for a modest rental home in the area.
Housing is Out of Reach
Millions of Americans struggle to find affordable rents.
In order to afford a modest, two-bedroom rental home in the U.S., renters need to earn a wage of $21.21 per hour. This Housing Wage for a two-bedroom home is $13.96 higher than the federal minimum wage of $7.25, and $4.83 higher than the estimated average hourly wage of $16.38 earned by renters nationwide. In six states and the District of Columbia, the two-bedroom Housing Wage is more than $25.00 per hour.
Renters with the lowest income face the greatest challenge in finding affordable housing. A renter earning the federal minimum wage would need to work 117 hours per week to afford a two-bedroom rental home at the Fair Market Rent and 94.5 hours per week to afford a one-bedroom. In no state can a person working full-time at the federal minimum wage afford a two-bedroom apartment at the Fair Market Rent. In only 12 counties can a full-time worker earning the prevailing federal or state minimum wage afford a one-bedroom rental home.
Extremely low income (ELI) renter households are only able to afford rents of $523 per month, far less than the monthly FMR of $1,103 for a two-bedroom home or $892 for a one-bedroom home. As a result, ELI renter households account for 73% of all severely cost-burdened renter households in the U.S. who spend more than half of their income on housing.
How We Can Solve the Crisis
Rebalance federal housing expenditures to assist renters with the greatest need.
Tax reform provides us the opportunity to rebalance federal housing expenditures to assist renters. The NLIHC-led United for Homes campaign urges reform of the mortgage interest deduction (MID) – a $65 billion a year tax expenditure that largely benefits America’s highest income homeowners – and investing the savings into real housing Tax reform provides us the opportunity to rebalance federal housing expenditures to assist renters. The NLIHC-led United for Homes campaign urges reform of the mortgage interest deduction (MID) – a $65 billion a year tax expenditure that largely benefits America’s highest income homeowners – and investing the savings into real housing solutions, such as the national Housing Trust Fund (HTF) and rental assistance programs, that serve families with the most pressing needs. Learn more at unitedforhomes.org.