According to the new edition of Out of Reach, an annual report produced by the National Low Income Housing Coalition (NLIHC), affordable housing is truly out of reach for millions of Americans — especially Extremely Low Income (ELI) renters earning less than 30 percent of the Area Median Income. In fact, out of all 50 states, including the states where minimum wage is higher than the current federal minimum wage, no full-time worker earning the minimum wage can afford a modest two-bedroom apartment.
When examining the gap between what a person is paid and what they can afford, low wages play a key role.  According to Out of Reach, the national Housing Wage, defined  as the amount a “worker must earn to afford a modest and safe rental home without spending more than 30% of his or her income on rent an utility costs” is $20.30 for a two bedroom rental unit and $16.35 for a one bedroom rental unit. With the federal minimum wage standing at $7.25, the gap between what low-income earners are getting paid compared to what they would need to make to afford housing at a fair market rate is extreme. In fact according to the report, a worker earning the federal minimum wage of $7.25 per hour would have to work 2.8 full time jobs, or 112 hours per week year round, in order to afford a two bedroom apartment at HUD’s Fair Market Rent. Increasing the federal minimum wage would help, but even households in the 29 states plus Washington D.C. that have a minimum wage above the federal level cannot even afford a one bedroom rental unit. To see the hourly wage required to afford a two bedroom rental in your state, check out NLIHC’s map below. To see how many hours a week a minimum-wage worker would have to work to afford a place in your state, view NLIHC’s interactive map.

Another part of this problematic puzzle is the shortfall of available rental units. Despite investments in affordable housing, the growth in renter units has not kept pace with demand. The current demand for rental housing is at its highest level since 1960 but with low vacancy rates and rapidly rising rents, only 31 affordable rental units are available for every 100 extremely low income households. High housing costs force families to shell out more than 50 percent of their pay toward rent, leaving them unable to afford other basic necessities such as food and healthcare, which can exacerbate financial and psychological stress within a family.

How can we fix this issue? To start, we can ensure that the minimum wage is a living wage. In addition to higher wages for all, we also must ensure there are continuous public investments in housing. One tool that will help accomplish this goal is the national Housing Trust Fund (HTF). Funded through a source outside of the appropriations process, the HTF will allocate money to all 50 states and the District of Columbia to help fund housing for very low and extremely low income families, which in turn will increase the availability of affordable housing. To learn more about the Housing Trust Fund and how it will contribute to the availability of housing, click here. To read the full report from the National Low Income Housing Coalition, click here.

As the report highlights, housing is a basic human right that we can and must take care of to ensure the success and security of families and individuals across our country.