The economic downturn caused by the COVID-19 pandemic will further increase the risk of housing instability for millions of low-wage renters, reports the National Low Income Housing Coalition (NLIHC).
Against the backdrop of the health crisis and increased attention on racial and ethnic housing disparities, the organization released its annual “Out of Reach” report that examines the divide between actual wages and what people need to earn to afford rents.
“We know that we had a housing crisis long before the COVID virus. We know that the coronavirus, the pandemic, has really been the great revealer,” said Sen. Sherrod Brown (D-Ohio) in a call with reporters, noting that the health crisis has shown racial disparities and inequities.
He recalled a recent meeting with a grocery store worker in southwest Ohio. “She said, ‘They tell me I’m essential, but really I’m expendable because they don’t pay me much, and they don’t protect me on the job,’” Brown said.
"Out of Reach" demonstrates that many of the professions that are considered essential don’t earn enough to afford housing, according to Brown.
The new report finds that the 2020 national housing wage is $23.96 per hour for a modest two-bedroom rental, up from $22.96 last year. That’s how much an hourly wage, full-time worker must earn to afford a rental home at the fair market rent without spending more than 30% of their income. On average nationally, a household must have an annual income of at least $49,830 to afford a modest two-bedroom rental home at the fair market rent of $1,246.
It’s an amount that’s far beyond the grasp of workers earning the federal minimum wage of $7.25 per hour. An average minimum-wage worker would have to work nearly 97 hours per week (more than two full-time jobs) to afford a two-bedroom rental home or 79 hours per week (almost exactly two full-time jobs) to afford a one-bedroom rental home at the fair market rent, reports the NLIHC.
The amount needed is also above the $18.22 average hourly wage of renters in the U.S.
In no state, metropolitan area, or county can a worker earning the federal or prevailing state or local minimum wage afford a modest two-bedroom rental home at fair market rent by working a standard 40-hour week, according to the NLIHC. “In only 5% of all U.S. counties (144 counties out of more than 3,000 nationwide, not including Puerto Rico) can a full-time minimum-wage worker afford a one-bedroom rental home at fair market rent.”
“COVID-19 has had an especially devastating impact on many of the workers in the lowest-paid fields,” says the report. “In the first five weeks of widespread closures, between March 15 and April 18, 24.4 million people applied for unemployment insurance, and households with lower incomes were likelier to report employment or income loss related to the outbreak.”
Black and Latino workers were especially hard hit as the unemployment rates were already higher than the rates for white workers before the pandemic, and the racial disparity increased further in April and May, according to the report.
In addition, the country continues to feel the effects of redlining and other discriminatory practices, Brown said.
“After generations of housing policy causing segregation and inequality, we have an opportunity to make it part of the solution,” he said. “First, we must make sure that we don’t emerge from the current crisis with greater racial and wealth inequality than we began with.”
Brown added that the nation is facing two major cliffs at the end of the month when many of the federal benefits put in place for people who have lost their jobs and eviction moratoriums expire.
Mitch McConnell (R-Ky.), the Senate majority leader, has refused to expand the measures as well as a $100 billion emergency rental assistance bill, said Brown, adding that the clock keeps ticking for families.