The United States’ federal minimum wage has been $7.25 per hour since 2009. Many states implement higher minimum wages, and several are scheduled to increase theirs to $15 per hour in the next five years.
Still, a renter in the U.S. would need to earn $20.40 per hour on average to afford a modest one-bedroom rental home in 2021, according to this year’s edition of the National Low Income Housing Coalition’s Out of Reach report, published Wednesday. That figure increases to $24.90 per hour for a standard two-bedroom rental unit, the report says.
And as the nation navigates a bumpy economic recovery in the fallout from the coronavirus pandemic, experts say the job losses brought about by the virus and public health emergency disproportionately impacted workers who could least afford a blow to their incomes.
“This pandemic was an economic catastrophe for low-wage workers and people of color,” Dan Threet, a research analyst at the National Low Income Housing Coalition, tells U.S. News.
Threet says many low-wage workers are housing cost-burdened, meaning they’re unable to spend less than 30% — or in some cases, 50% — of their earnings on rent. “When you’re housing cost-burdened, you’re not able to save for unexpected … emergencies,” he continues. “A shutdown or furlough can have reverberating effects” and can be indicative of “how those low-wage workers were much more likely to fall into a precarious situation.”
West Virginia and Arkansas rank lowest among U.S. states for housing costs — with average benchmark housing wages of $14.83 and $14.60 per hour, respectively. Still, with hourly minimum wages of $8.75 in West Virginia and $11.00 in Arkansas as of July 1, 2021, the NLIHC estimates that it would take 68 hours per week of minimum wage work in West Virginia and 53 hours of weekly minimum wage work in Arkansas to afford a standard two-bedroom rental home.
California, Hawaii and Massachusetts have the most prohibitive housing wages for a two-bedroom apartment — $39.03, $37.69 and $36.24 per hour, respectively, according to the report. Next are New York, the District of Columbia and New Jersey, followed by Washington, Maryland, Colorado and Connecticut to complete the top 10.
Those top 10 states require renters to earn at least $27.37 per hour to afford an average two-bedroom apartment. And with minimum hourly wages of $13 in California, $10.10 in Hawaii, and $13.50 in Massachusetts, as of July 1, these states tend to exhibit critical deficits between average housing costs and minimum wages.
While Threet highlights the economic toll the pandemic has exacted on renters, he also views the recovery as an opportunity for improvement.
“In the wake of the pandemic, we have the opportunity to rethink the investments we make,” he says. “Seeing the amount of devastation and struggle is sobering and calls for action. I hope it galvanizes legislators to take action.”
Threet says the NLIHC has urged Congress in the past year to move forward with funding programs including emergency rental assistance, a $45 billion annual investment in the National Housing Trust Fund, expansion of housing choice voucher programs, passage and implementation of a housing stabilization fund, and stronger tenant protections, including right to counsel programs.
And Sarah Saadian, NLIHC’s vice president for public policy, notes that the pandemic has in many cases prompted state and local governments to pass immediate relief measures for renters.
The health emergency and its aftermath, “has caused more cities (and) states to look at housing measures,” she says. “We’ve been really excited to see what’s going on with Project Roomkey in California. When the pandemic hit, (Gov. Gavin Newsom) responded very quickly to the needs of the homeless population.”
Saadian says that rather than move unhoused people into homeless shelters, where it can be hard to socially distance, California “used (its) own fund to move individuals experiencing homelessness into hotels and motels. But they also negotiated the purchase of the hotels and motels to keep people housed during the pandemic.”
Ultimately, she says that addressing both the substantial gaps between wages and housing costs as well as an already-limited housing supply will require “all levels of government working together to address the crisis.”
In Rhode Island — which the Out of Reach report ranks 17th for its hourly housing wage, at $22.54 per hour — the NLIHC estimates that renters would need to work about 78 hours of minimum wage work per week to afford a standard two-bedroom apartment.
Kristina Contreras Fox, a senior policy analyst at the Rhode Island Coalition to End Homelessness, describes her state’s housing affordability situation succinctly: “Very simply, things are awful, and they’re getting worse,” she tells U.S. News.
“We oversee the state’s coordinated entry system, which is the (Department of Housing and Urban Development) process for connecting people experiencing homelessness or on the brink of experiencing homelessness with immediate resources,” Contreras Fox says. “If someone calls and says they don’t have a place to sleep tonight, the phone rings here.”
She says that for every 100 extremely low-income Rhode Island families, there are only 51 affordable and available homes. Contreras Fox attributes this scarcity both to a housing supply that hasn’t kept pace with population growth, as well as the state’s pervasive income gap.
“The income gap is something that’s particularly poisonous, because it perpetuates homelessness, poverty and makes things generally unattainable. As the report says, it puts things further out of reach,” she says.
Citing a 2020 report originally published by HousingWorks Rhode Island at Roger Williams University, Contreras Fox says renters in the state need an annual income of $66,040 to afford an average two-bedroom apartment in the state, whereas the median household income for renters in Rhode Island is $34,255.
Housing conditions have been especially arduous for Black and brown Rhode Islanders, Contreras Fox says. They tend to experience homelessness and housing insecurity at far greater rates than white residents, she added. According to a 2020 report prepared by the state of Rhode Island, the homeownership rate for white families was 64.8% as of 2017, compared to 31.6% for Black families and 26.7% for Hispanic families.
“As recently as 2014, the city of Providence settled a redlining lawsuit against Santander Bank because they found that this bank was still engaging in redlining practices. It’s codified bigotry and discrimination,” she says. “We need to help people who have been suffering the longest. … Otherwise, you’re creating policy in a vacuum.”
“This whole idea of the American Dream of, ‘Oh, work hard, and if you work hard, your dreams will be met. You’ll have a place to live with you and your family.’ That’s not true anymore,” she says. “And the harder people work on that, the more it makes things worse.”
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Housing Isn’t Affordable for Minimum Wage Workers Anywhere in the U.S. originally appeared on usnews.com