The problem: Minimum-wage workers can’t afford rent for a modest, two-bedroom apartment in 90% of U.S. counties, according to the National Low Income Housing Coalition (NLIHC) 2019 Out of Reach Report.
The math: How much does housing cost? To afford “a modest two-bedroom rental home,” workers need to make $22.96 and for a one-bedroom, $18.65, according to the report. This means that someone earning the federal minimum wage, $7.25, would need to work approximately 103 hours per week to afford a one-bedroom or 127 hours per week for a two-bedroom.
Wages vs housing costs: So, is the solution raising minimum wage or rent affordability reforms? “It’s really both,” according to Susan Saegert, a professor of environmental psychology and geography at the CUNY Graduate Center. While raising wages might seem like an obvious answer, higher wages can actually lead to higher rent, she says. Moreover, where rent is more affordable, wages tend to be lower.
A systemic problem: The average renter must clock in 52 hours per week to pay rent for a modest two-bedroom apartment. This is a challenge if not an obstacle to housing security for many when you consider that low wage earning renters might also be a single parent of a young child or a person with a disability, for example.
From a systematic perspective, inequality is linked to race and income, according to Saegert. Only 6% of white households are extremely low-income renters compared to 20% of black households and 16% of Hispanic households.
That’s not to mention that according to an article in the Wall Street Journal, black homeownership has dropped to its lowest level on record, says Saegert. “And at the same time, Hispanic homeownership has been increasing.” According to Saegert, this indicates an uneven phenomenon, with African Americans facing “significantly more discrimination in obtaining housing and more racial segregation.” No easy answer: The NLIHC’s recommendations to ease housing unaffordability include a ban on discriminating against low-income families, tax code changes, and “significant capital investment” that preserves affordable housing for low-wage earning renters. According to Andrew Aurand, vice president for research at the NLIHC and co-author of the report, a mix of rental assistance at the federal level, subsidized housing production, and zoning reconsiderations in areas where affordable housing inventory is low would also help.
