DATA EMBARGOED UNTIL: March 11, 2013, 2:00 PM EDTCONTACT: Amy Clark, firstname.lastname@example.org, 202.662.1530 x227
New Data Shows Rental Housing Out of Reach for Low-Wage WorkersAffordable Rental Housing Shortage is Main Driver of Homelessness in America Renting is an increasingly popular choice for Americans seeking a housing option they can afford. But for low-wage workers, even a modest rental home is unaffordable in every jurisdiction in the nation. According to Out of Reach 2013, a report released today by the National Low Income Housing Coalition, a nonprofit research and policy organization, a full-time worker nationally must earn $18.79 per hour in order to afford rent and utilities on a modest two-bedroom apartment while spending no more than 30% of income on these housing costs. The average wage of renters, on the other hand, is just $14.32. Out of Reach 2013 is a side-by-side comparison of wages and rents in every county, metropolitan area, combined nonmetropolitan area and state in the United States. For each jurisdiction, the report calculates the amount of money a household must earn in order to afford a rental unit in a range of sizes at the area’s Fair Market Rent (FMR), based on the generally accepted affordability standard of paying no more than 30% of income for housing costs. From these calculations the hourly wage a worker must earn to afford the FMR for a two-bedroom home is derived. This figure is the Housing Wage. There are seven metropolitan areas in the United States in which a renter must earn more than $30 per hour in order to afford a modest apartment. These areas are:
- Honolulu, HI, with a Housing Wage of $35.25.
- San Francisco, CA, with a Housing Wage of $34.52.
- Stamford-Norwalk, CT, with a Housing Wage of $31.69.
- Orange County, CA, with a Housing Wage of $31.17.
- San Jose-Sunnyvale-Santa Clara, CA, with a Housing Wage of $30.96.
- Santa Cruz-Watsonville, CA, with a Housing Wage of $30.52.
- Nassau-Suffolk, NY, with a Housing Wage of $30.44.
Advocates say that while efforts to increase the wages of working families are important, the high cost of housing is itself the main driver of the housing shortage, and with it, homelessness. Barbara Poppe, Executive Director of the U.S. Interagency Council on Homelessness, writes in the preface to Out of Reach 2013 that “an increasingly tight rental market and the drop in the number of affordable rental units available to extremely low income households is the greatest barrier to achieving” an end to homelessness. According to the National Low Income Housing Coalition, there are 10.1 million extremely low income renters and only 5.5 million homes renting at prices they can afford. The Coalition believes it should be a public policy priority to ensure the lowest income Americans are decently and affordably housed. “The federal government has the resources available to end the shortage of housing affordable to the lowest income renters,” said Sheila Crowley, President and CEO of the National Low Income Housing Coalition, “it is just a matter of how those resources are spent. Instead of subsidizing the mortgages of higher income people, we should be investing in making rental housing more affordable and available to those who could truly benefit from the assistance.” NLIHC advocates a modest reform to the mortgage interest deduction that would cap mortgages eligible for a tax break at $500,000 and convert the deduction into a 15% credit. This proposal would save the federal government almost $20 billion each year; NLIHC proposes investing these savings into the National Housing Trust Fund to build, preserve, rehabilitate, and maintain rental housing affordable to the lowest income renters. Extensive data for every state, metropolitan area and county in the country are available online at www.nlihc.org/oor/2013. Ranking tables and maps are also available at the website, as is further analysis and explanation of the data.