Out of Reach
EMBARGOED UNTIL WEDNESDAY, SEPTEMBER 20, 2000, 2:00 PMPRESS CONFERENCE TO BE HELD WEDNESDAY, SEPTEMBER 20, 2000 AT 2:00 PM IN ROOM 188 OF THE RUSSELL SENATE OFFICE BUILDING.
Tuesday, September 19, 2000
Contacts:
Sheila Crowley, President: 202-662-1530 x225
Jennifer G. Twombly, Research Director: 202-662-1530 x237
Jennifer Fogel-Bublick, Legislative Director: 202-662-1530 x242
Winton Pitcoff, Communications Director: 202-662-1530 x223Gap Between Minimum Wage and
Rental Housing Costs GrowsFor millions of low wage working Americans, paying the rent means sacrificing other basic needs, because their wages remain inadequate to afford soaring housing prices.
The National Low Income Housing Coalition’s annual report on income and rental housing costs, Out of Reach, reveals that in no single jurisdiction in the United States can a minimum wage worker afford the Fair Market Rent for homes in their communities. The 2000 edition of the report is released today.
In order to afford the Median Fair Market Rent of a two-bedroom rental unit in the U.S., a worker would have to earn a Housing Wage of $12.47 per hour, 242% of the current federal minimum wage of $5.15 per hour. A worker earning minimum wage would have to work 97 hours per week in order to afford the Median Fair Market Rent for a two-bedroom rental unit, or a household must have the equivalent of two and a half minimum wage workers to be able to pay for basic housing.
In more expensive areas of the country housing is even less affordable to low-wage workers. The Housing Wage necessary to afford a two-bedroom unit in San Francisco, CA is $28.06, and a minimum wage worker must work 195 hours per week to afford the median rent. In the Stamford-Norwalk, CT area those numbers are $22.62 and 147 hours. Despite the fact that these are two states that have passed higher minimum wage laws than the Federal standard, minimum wages still fall far short of making housing affordable for low wage workers.
And in most areas of the country the gap is growing. Of the 3,646 local jurisdictions examined – every county in the United States (in New England States data was analyzed at the town level – the Housing Wage increased in 3,570 of them, fully 98%, by an average of about 3% from 1999 to 2000. More than 100 local jurisdictions had an increase of more than 10%, far exceeding recent gains in wages.
Far worse is the gap between income and housing costs for elderly and disabled people who depend on Supplemental Security Income (SSI) as their main source of income. in Colorado, for example, an SSI recipient, receiving $333.22 monthly, can afford monthly rent of no more than $99.97, while the Fair Market Rent for a 1 bedroom home in Colorado is $492.
“The fact that Congress is considering an increase in the minimum wage is a positive step forward,” says NLIHC President Sheila Crowley. “But even with the proposed change, the minimum wage will still be far below the Housing Wage. Congress must also use the opportunity afforded by this era of unprecedented surpluses in the Federal Treasury to provide more housing assistance to the families who need it most. Proposals supporting programs preserving existing assisted and public housing, producing of new affordable units, and making more vouchers available to poor families should be at the top of the Congressional agenda.”
“In this time of economic prosperity, there is no better time than now to invest in those who have not yet experienced the rewards of our great national wealth. All of our experience shows that safe, decent, and affordable housing is the key to family well-being, educational success, and productive work,” writes Andrew Cuomo, Secretary of the U.S. Department of Housing and Urban Development, in Out of Reach’s Preface.
“Housing assistance helps parents provide better nutrition and health care for their children,” writes Cuomo. “It is the key to helping elderly people remain secure in their homes, to helping families remain in stable housing so that their children can learn in school, and to freeing up income so that workers can afford a car to travel to a better job. Housing assistance makes sense. It is good public policy.”
The study estimates the affordability of the “fair market rents” (FMRs) established annually by the Department of Housing and Urban Development (HUD). FMRs are used for the Section 8 rental housing certificate and voucher programs. They are HUD’s best estimates, based on telephone surveys and other data, of gross rents (including utilities) of “privately owned, decent, safe, and sanitary rental housing of a modest (non-luxury) nature with suitable amenities” of units offered for rent in fiscal year 1999. By using FMRs, Out of Reach is able to analyze the relationship between housing costs and incomes in every jurisdiction, as the FMRs are the only estimate of housing costs that are uniform across the nation. The calculations also assume the generally accepted standard of spending not more than 30% of income on housing costs.
The entire report, Out of Reach: The Growing Gap Between Housing Costs and Income of Poor People in the United States, is available from NLIHC at 202-662-1530, and on their website at http://www.nlihc.org/.
Established in 1974, the National Low Income Housing Coalition is a membership organization dedicated solely to ending America's affordable housing crisis. NLIHC educates, organizes, and advocates to ensure decent, affordable housing within healthy neighborhoods for everyone.
Local contacts are available in major cities around the nation for comments on the report and on affordable housing issues. Contact NLIHC for names and contact information.
Back to Out of Reach Table of Contents.
