A simple, safe place to live is far beyond the means of America’s low-wage workers no matter how hard they toil.

Diane Yentel
Diane Yentel

A worker earning the federal minimum wage of $7.25 per hour would need to work nearly three full-time jobs or approximately 112 hours per week every week of the year to afford a basic two-bedroom apartment, according to the National Low Income Housing Coalition’s (NLIHC’s) latest Out of Reach report.

“We find there is no place in America, no state, no county, no jurisdiction where minimum-wage workers earn enough for that decent, affordable two-bedroom apartment,” said Diane Yentel, NLIHC president and CEO.

Only a small number of counties exist where a minimum-wage worker can afford a one-bedroom apartment.

In its 27th year, Out of Reach looks to answer how much does one have to earn to afford rent and utilities for a modest two-bedroom apartment at fair market rent while spending no more than 30% of their income on housing costs. NLIHC calls this amount the “housing wage.”

In 2016, the national housing wage is a whopping $20.30 for a two-bedroom apartment and $16.35 for a one-bedroom unit. That’s an increase from 2015 levels when a household needed to earn $19.35 an hour to afford a two-bedroom apartment or without spending more than 30% of their income on rent.

The issue isn’t limited to minimum-wage workers. The average hourly wage of U.S. renters is $15.42, still $4.88 less than the two-bedroom housing wage, reports NLIHC.

“The thing is this is everyone’s issue,” said Julian Castro, secretary of the Department of Housing and Urban Development (HUD), during a call with reporters to announce the release of the new report. “It’s everyone’s issue because the affordability crisis is putting a strain on so many families throughout our nation.”

Castro noted that the issue affects seniors. “HUD is only able to serve one out of every three seniors who need our help,” he said. “Studies show that as the nation ages our department would need to provide support for an additional 900,000 seniors just to keep pace between now and 2030.”

The Out of Reach findings come at a time when several communities have recently raised or are proposing to raise their local minimum-wage rate. NLIHC examined what difference the higher rates would make, and the findings were sobering.

“While it certainly helps, we still find that even those communities that have a higher minimum wage than the federal minimum wage it still doesn’t match the housing wage and what’s needed to afford that average two-bedroom apartment,” Yentel said.

For example, San Francisco has a local minimum wage of $12.25, notably higher than the federal rate. However, the housing wage for a basic two-bedroom apartment in the city is a gravity-defying $44.02, the most expensive metro area, according to Out of Reach.

“Raising the minimum wage is an important strategy for addressing the gap, but it won’t solve the problem on its own,” Yentel told Affordable Housing Finance. “We have to also be building homes for the lowest-income people. Addressing that shortage as well as the wage issue is essential.”

One promising tool is the National Housing Trust Fund, the first federal housing program in a generation to focus on extremely low-income households, says NLIHC. HUD recently announced the first trust fund awards of $174 million to states and U.S. territories this year.

NLIHC leaders have urged changes to the mortgage interest deduction to generate $213 billion in revenue over 10 years for the fund. The proposal calls for reducing the mortgage amount eligible for the interest deduction from $1 million to $500,000 and converting the deduction to a 15% nonrefundable tax credit. Savings would then help finance the trust fund.

Castro said there have been different proposals related to the mortgage interest deduction but declined to voice support for any particular approach. In general, he said it’s a topic that “we think there ought to be a conversation about.”

The states with the highest housing wage for a two-bedroom apartment are Hawaii at $34.22; California, $28.59; New York, $26.69; Maryland, $26.53; and New Jersey, $26.52. The District of Columbia is also among the highest regions, with a housing wage of $31.21.

Northern California cities make up the top three metropolitan areas with the highest housing wage. San Francisco leads the list with a $44.02 housing wage for a two-bedroom apartment followed by the Oakland metro area, $40.44; the San Jose metro area, $38.35; Honolulu, $38.17; and the Stamford-Norwalk, Conn., metro, $37.15