Despite slowing rent growth, affordable housing still remains out of reach for millions of American renters.
They are facing the effects of a long-standing trend in which rents have risen faster than wages, according to “Out of Reach 2023: The High Cost of Housing,” an annual report released by the National Low Income Housing Coalition (NLIHC).
As in the past, this year’s report also provides a “housing wage”—an estimate of the hourly wage full-time workers must earn to afford a rental home at fair market rent without spending more than 30% of their incomes. Nationally, the 2023 housing wage is $28.58 per hour for a modest two-bedroom rental home and $23.67 for a modest one-bedroom rental home.
To put this in context, this is more than three times the federal minimum wage and more than what most of our country’s low-income seniors, people with disabilities, families with children, and low-wage workers can comfortably afford.
“Out of Reach” provides housing wages for each state, metropolitan area, county, and combined non-metropolitan area within a state. For a modest two-bedroom apartment, the average housing wage ranges from $16.27 in Arkansas to $42.25 in California. States with lower housing costs also tend to have lower wages, so the lowest-wage workers in every state struggle to pay their rent.
In no state, metropolitan area, or county can a full-time minimum-wage worker afford a modest two-bedroom rental home. A full-time minimum-wage worker cannot afford a modest one-bedroom rental home in over 92% of U.S. counties.
The study also reveals that:
· Over 25 million people work in the five lowest-paying occupations—retail sales, food and beverage services, food preparation, home health and personal care services, and building cleaning—whose median hourly wages are at least $7.80 less than the one-bedroom housing wage;
· In no state, metropolitan area, or county can a full-time minimum-wage worker afford a modest two-bedroom rental home. A full-time minimum-wage worker cannot afford a modest one-bedroom rental home in over 92% of U.S. counties;
· The gap between wages and housing costs is largest for people of color, and particularly women of color. “The disparities are the result of historic and continuing racist housing policies that have led to people of color facing disproportionate challenges accessing decent and affordable homes,” reports the NLIHC. Black, Latino, and Native American workers are also more likely than white workers to be employed in sectors with lower median wages, like service, consumer-goods production, and transportation; and
· NLIHC leaders stress the importance of federal resources to ensure that people can remain stably housed, including increasing funding for rental assistance through the Housing Choice Voucher program, boosting federal investments in the preservation of the existing affordable housing stock and in programs that expand the supply of deeply affordable units, and providing funding for a national housing stabilization fund for renters at risk of housing instability due to unexpected financial crises.
The full “Out of Reach 2023” report as well as interactive data for each state, county, and metro area are available at: https://nlihc.org/oor.
