About the Report
Out of Reach documents the gap between renters’ wages and the cost of rental housing. The report’s Housing Wage is the hourly wage a full-time worker must earn to afford a modest rental home without spending more than 30% of his or her income on housing costs. It is based on HUD’s Fair Market Rent (FMR), which is an estimate of what a family moving today can expect to pay for a modest rental home in the area.
Housing is Out of Reach
Millions of Americans struggle to find affordable rent.
In order to afford a modest, two-bedroom rental home in the U.S., renters need to earn a wage of $22.10 per hour. This Housing Wage for a two-bedroom home is $14.85 higher than the federal minimum wage of $7.25, and $5.22 higher than the estimated average hourly wage of $16.88 earned by renters nationwide. In seven states and the District of Columbia, the two-bedroom Housing Wage is more than $25.00 per hour.
Renters with the lowest incomes face the greatest challenge in finding affordable housing. A renter earning the federal minimum wage would need to work 122 hours per week to afford a two-bedroom rental home at the Fair Market Rent and 99 hours per week to afford a one-bedroom. In no state can a person working full-time at the federal minimum wage afford a two-bedroom apartment at the Fair Market Rent. In only 22 counties can a full-time worker earning the prevailing federal or state minimum wage afford a one-bedroom rental home at the Fair Market Rent.
On average, extremely low income households of four people earn no more than $26,420 annually and can afford at most $660 per month for housing. The national average fair market rent for a one-bedroom home is $931 per month and $1,149 for a two-bedroom home, far from affordable for an extremely low income family.
How We Can Solve the Crisis
Millions of the lowest income households, including low-wage workers, need housing assistance. Yet, only one in four households who qualify for housing assistance receive it. Congress must address this gap by fully funding key federal housing assistance programs. These programs include Housing Choice Vouchers, the national Housing Trust Fund, public housing, project-based rental assistance, and other federal rental housing programs serving the lowest income households.