Rising rents, due in part to a hot real estate market, are driving up the average amount full-time workers must earn to rent modest apartments to about $25 per hour nationally, according to a new report by the National Low Income Housing Coalition.
According to the report, for a family to rent a two-bedroom apartment in most places in the United States, a full-time worker would need to earn at least $24.90 per hour to spend 30% of their gross income on housing.
''These amounts are far higher than many Americans — including seniors, people with disabilities, and working families — can spend on housing,'' the report said.
A person who needs to rent a one-bedroom apartment is not much better off, requiring an hourly wage of $20.40 per hour, well above the federal minimum wage of $7.25 an hour, or even the $15 hourly minimum wage many on the left are fighting for.
According to the coalition’s annual ''Out of Reach'' report for 2021, the nation had a shortage of 7 million affordable homes, forcing 70% of low-wage earners to spend more than half of their income on rent.
''They have little ability to save — and one emergency or unexpected expense could send them into homelessness,'' the report said. ''To make matters worse, three out of four very low-income renters who are eligible for federal rental assistance do not receive it.''
How much people must spend on housing varies greatly among regions of the country as well as differences between rural and urban areas.
For example, a modest two-bedroom apartment in the San Francisco metropolitan area requires a full-time worker to earn $68.33 per hour, while a similar dwelling would cost a worker just $12.19 an hour in more rural areas of Alabama, the report found.
The report is based on how much a worker needs to earn per hour of work in a 40-hour week to pay a maximum of 30% of gross income on housing, but the methodology does not consider payroll deductions for taxes, Social Security, workers' compensation, unemployment or health benefits.
According to the report, households spending more than half of their gross income on housing are considered ''severely cost-burdened,'' and have little left over for other expenses such as utilities, food and transportation.
While the report calculates full-time work as 40 hours per week for 52 weeks a year, most full-time workers clock in for 35 hours per week, resulting in a deficit of 260 hours, or 6.5 weeks of income yearly.
At the average cost of $24.90, that means the average full-time worker with 35 hours a week starts out almost $6,500 a year behind.
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