NLIHC released its annual report, “Out of Reach 2022: The High Cost of Housing,” on July 28. The report highlights the mismatch between the wages people earn and the price of decent rental housing in every state, metropolitan area, and county in the U.S. The report calculates the “Housing Wage” a full-time worker must earn to afford a rental home without spending more than 30% of their income on housing costs. This year’s national Housing Wage is $25.82 per hour for a modest two-bedroom home at fair market rent and $21.25 per hour for a modest one-bedroom home.
Out of Reach 2022 finds that in no state, metropolitan area, or county can a full-time minimum-wage worker afford a modest two-bedroom rental home at the fair market rent (FMR). The FMR is an estimate of what a family moving today can expect to pay for a modestly priced rental home in a given area. Minimum wage workers cannot afford a modest one-bedroom apartment in 91% of U.S. counties. Even after accounting for state and county minimum wages that are higher than the federal minimum, the average minimum wage worker would need to work 96 hours per week to afford a two-bedroom apartment at the fair market rent, and 79 hours to afford a one-bedroom apartment at the fair market rent. Housing is also out of reach for millions of workers who earn more than the minimum wage but whose wages have not kept pace with housing costs. Eleven of the largest 25 occupations in the country pay a median wage that is less than the one-bedroom housing wage.
The affordability of rental housing is not just a challenge for low-wage workers. While the national average fair market rent for a one-bedroom apartment is $1,105, an individual receiving the average unemployment insurance benefit can afford a rent of no more than $529 per month. An individual receiving the federal Supplemental Security Income (SSI) benefit can afford no more than $252 per month.
Nationwide, recent rent increases have made affording and maintaining housing even more difficult for the lowest-income renters. Rents rose 18% between the first quarter of 2021 and the first quarter of 2022. These rent increases have been widespread: out of 345 metropolitan counties, all but two have seen a rise in rental prices since 2021. With rents skyrocketing and prices for goods increasing, workers may have to sacrifice necessities like food, medical services, transportation, and childcare simply to remain housed.
Out of Reach 2022 shows that the gap between wages and housing costs is largest for people of color, and particularly women of color. The median Black and Latino worker earn nearly $6.00 less per hour than the median white worker. Among renters, 55% of Black households are cost-burdened and 53% of Latino households are cost-burdened, compared to 43% of white households. The disparities grow even starker for women of color: more than 70% of Black and Latina women earn wages that fall short of the one-bedroom Housing Wage.
As rental prices rise, evictions resume, and COVID-19 policy measures expire, low-income renters will face insurmountable hardships finding and maintaining affordable housing without significant congressional action. Out of Reach highlights key policy measures needed to solve the housing affordability crisis, including expanding rental assistance to all eligible renters, preserving and expanding the supply of affordable housing, creating a permanent emergency rental assistance program for households that face an unexpected financial shock, and strengthening renter protections.
The Out of Reach 2022 interactive website includes data for each state, county, and metropolitan area and an easy-to-use search function for identifying data by metropolitan-area ZIP code. The website can be accessed at: https://reports.nlihc.org/oor