The Housing Wage in Out of Reach captures the gap between wages and rents across the country, and is the estimate of the full-time hourly wage that a household must earn to afford a decent apartment at the HUD estimated Fair Market Rent (FMR), while spending no more than 30% of income on housing costs. The 2013 Housing Wage is $18.79, exceeding the $14.32 hourly wage earned by the average renter by almost $4.50 an hour, and greatly exceeding wages earned by low income renter households.
Each year, Out of Reach demonstrates that large numbers of low income renters cannot afford the cost of living in the cities and towns where they work. This edition underscores the challenges facing the lowest income renters: increasing rents, stagnating wages, and a shortage of affordable housing. The urgent solution to these issues is clear: expanding the supply of affordable housing units, dedicated to the lowest income renters.
Housing costs vary across the nation, but the lack of affordable housing affects low-wage workers in all corners of the country. In order to close the gap between the demand for affordable housing and the supply, we would need to add 4.5 million units affordable to ELI households. This is not an unattainable goal. Once funded, the National Housing Trust Fund (NHTF) would provide states with the dollars they need to expand the stock of housing that is affordable to ELI households.
In Utah, the Fair Market Rent (FMR) for a two-bedroom apartment is $777. In order to afford this level of rent and utilities – without paying more than 30% of income on housing – a household must earn $2,590 monthly or $31,079 annually. Assuming a 40-hour work week, 52 weeks per year, and this level of income translates into a Housing Wage of $14.94.
In Utah, a minimum wage worker earns an hourly wage of $7.25. In order to afford the FMR for a two-bedroom apartment, a minimum wage earner must work 82 hours per week, 52 weeks per year. Or a household must include 2.1 minimum wage earners working 40 hours per week year-round in order to make the two-bedroom FMR affordable.
In Utah, the estimated mean (average) wage for a renter is $11.78. In order to afford the FMR for a two-bedroom apartment at this wage, a renter must work 51 hours per week, 52 weeks per year. Or, working 40 hours per week year-round, a household must include 1.3 workers earning the mean renter wage in order to make the two-bedroom FMR affordable. National Low Income Housing Coalition
