Study finds one-bedroom rentals are affordable in a dozen mostly rural counties in the west, and two-bedrooms are entirely out of reach for low-income workers
A person working a full-time minimum-wage job will find it virtually impossible to rent an affordable home anywhere in the US, according to a study that sheds new light the country’s housing crisis.
The report reveals that there is not a single county or metropolitan area in which a minimum-wage worker can afford a modest two-bedroom home, which the federal government defines as paying less than 30% of a household’s income for rent and utilities. And in only 12 counties in the country is a modest one-bedroom home affordable, according to the report, published Thursday by the National Low Income Housing Coalition.
This applies even in places that have raised their minimum wage higher than the baseline federal level of $7.25, which equates to around $15,000 a year. In Los Angeles County the minimum wage is rising to $15 for all employers by 2021, but the current wage required for a one-bedroom there is $22.98. In New York City the minimum wage is rising to $15 for all employers by 2019, but the wage needed for a one-bedroom soars above this, at $27.29.
Less-overheated real estate markets present difficulties to low-income workers as well. Averaging rents across Alabama and Montana, someone earning minimum wage would have to work approximately one-and-a-half full-time jobs to be able to afford a one-bedroom home.
Americans earning minimum wage do not need a study to know how difficult things are.
Alicia Hamiel, 23, a mother of two children in Philadelphia, earns $7.75 an hour at McDonald’s and works 26-38 hours a week, based on what the scheduler allots her. She and her family are currently living in a single room that rents for $400 a month.
“I feel like I’m failing as a mom,” she said. “If I can’t make sure they have a roof over their heads, what am I doing? I feel like I’m doing the best that I can.”
She was once so desperate that looked into staying at a homeless shelter, but there was no room. “I apply for other jobs, I call, I go to interviews. And it’s just like, either I’m not qualified or they just tell me, you know, they don’t want to hire me.”
The study is “well-executed”, said David Bieri, an associate professor of public policy at Virginia Tech, who was not involved with the project. “We learn from it that housing in the coastal US is exceedingly expensive,” he said, and that in cities, wages are “not really moving in line with increased pressures”.
The most expensive counties and metropolitan areas in the US are indeed maritime, or thereabouts: in the San Francisco bay area and in the Honolulu, New York, Los Angeles and Washington DC areas. San Francisco renters must earn $58.04 an hour to afford a two-bed home. The 12 counties where a one-bedroom is affordable are in Arizona, Oregon and Washington – as the report notes, these are states with their own, higher minimum wages – and are mostly rural.
While numerous localities and states have boosted the minimum wage, they may need to be more ambitious. In Albuquerque, New Mexico, the minimum wage is about $8.50, but housing costs for a one-bedroom would require a wage of $13.77 an hour. In Saint Louis, Missouri, the minimum wage is $10 but $13.27 is needed; in Tacoma, Washington, the minimum wage is $11.15, lagging the one-bed cost of $17.02.
Raising the minimum wage “definitely is something that would increase quality of life for low-wage workers and is important”, said Andrew Aurand, the principal author of the study, but it “still does not raise the minimum wage to a level that would allow a minimum wage worker to afford a home”.
He suggested that the government could offer increased rental assistance and boost programs such as the National Housing Trust Fund, which invests in affordable homes. The Trump administration has signaled it is moving in the opposite direction, proposing cutting funding for the federal housing agency by almost 15% and indicating it would like to ax the trust fund.
Elsewhere in the report, the authors note that some of the occupations predicted by the US Bureau of Labor Statistics to add the most positions in coming years – such as nursing assistants, retail salespersons and home health aides – all currently earn too little to be able to pay for a one-bedroom apartment, as calculated on a national basis.
Those opposed to raising the minimum wage contend that it could cause job losses and does not help to reduce poverty levels, and their arguments seem to have won out in around two dozen states that have passed laws preempting cities from raising the minimum wage.
Yet this “is bad for workers and it’s bad for the economy because it’s stifling consumer spending”, said Tsedeye Gebreselassie, a senior staff attorney at the National Employment Law Project. Extensive research, she pointed out, finds a positive effect.
Marco Ascencio, 21, who lives with his mother and two sisters in a two-bedroom house in Inglewood, in Los Angeles County, has no doubt that it should be higher.
He works around 37 hours a week cleaning aircraft for American Airlines and 15 hours making pizza dough at Little Caesars, earning $10.55 an hour for both; his mother also has a full-time minimum wage job cleaning planes, and a sister has just started in a new position. “How is it that three people are working,” he said, “and we’re still struggling?”
Their home rents for around $2,000 a month, and in addition to paying for housing, Ascencio is saving for college tuition. He feels as though the family lives on a knife edge: if his mother became injured and lost her job, or if they were evicted and had to move into a more expensive place, he fears their financial net would break.
“I don’t want to be a 25-year-old still working, earning $10 an hour, and still living in my mom’s house, in the living room – it’s kind of scary.”
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