Market Rate Rentals Not Affordable to Minimum Wage Workers, Economy Makes Situation Worse

By Anuradha Kher, Online News Editor Washington, D.C.–A person with a full-time job needs to earn an hourly housing wage of $17.84 to afford a two-bedroom rental home at the nation’s average Fair Market Rent (FMR), according to the National Low Income Housing Coalition’s (NLIHC) recently released annual Out of Reach report. The report provides data for every state, metropolitan area and county in the country showing how much a household must earn to afford a modest market-rate rental.According to the report, in 2009, the estimated median wage for workers in America is only $16.03. At the federal minimum wage of $6.55, a household would have to work 109 hours each week to afford the nation’s average FMR for a two-bedroom home. The report finds that in no county in the U.S. can a full-time minimum wage worker afford even a one-bedroom apartment at the FMR. “The condition is likely to get worse in the next two years,” says Dean Baker, co-director, Center for Economic and Policy Research. “Unemployment is only expected to get worse and improve no sooner than 2011. At the same time, none of the national indexes are showing a decrease in rent.” The statistics in Out of Reach show the disconnect between what it costs to afford decent rental housing in the U.S. and what low-wage employment actually pays. “The longstanding structural deficit of rental homes that the lowest income people can afford, exacerbated by the economic recession, will surely lead to more people becoming homeless,” says Sheila Crowley, president of the National Low Income Housing Coalition. “This is a good opportunity for policy innovation but it is not yet happening. It is not enough to merely create jobs. The homes need to be made more affordable too.” According to Crowley, even before the current foreclosure and economic crises, renters with the lowest incomes faced a shortage of homes they could afford. With more families turning to the rental market and job losses numbering in the millions, the struggle to find affordable housing has become even more acute. Baker adds, “I don’t expect rents to plunge, but I won’t be surprised if rents fell a little in cities like Detroit. However, this won’t make rents any more affordable to low income people. These rent changes will only make it more affordable to high-income renters.”“It’s important to note that these rent decreases will make no difference if the wages are falling in lockstep with the rents,” concludes Baker.