Out of Reach 2003
EMBARGOED UNTIL 11 A.M. EASTERN TIME, SEPTEMBER 8, 2003
Contact: Kim Schaffer, National Low Income Housing Coalition, 202-662-1530 x230, kim@nlihc.orgHousing Remains “Out of Reach” for Millions of Americans
– Housing Wage Increases Faster than Inflation, Report Finds –
– Unaffordable Fair Market Rents –As housing costs increase faster than wages, decent, modest housing is increasingly out of reach for millions of Americans, a report released today by the National Low Income Housing Coalition (NLIHC) shows.
The national Housing Wage for 2003 is $15.21 an hour, or $31,637 a year — almost three times the federal minimum wage — according to Out of Reach: 2003. The Housing Wage is the amount a person working full-time has to earn to afford a two-bedroom rental unit at fair market rent while paying no more than 30% of income in rent.
The Out of Reach: 2003 report calculates the Housing Wage for every state, region and county in the U.S. Other findings include:
- For 2003, housing costs continue to rise faster than wages and the cost of other goods. The national Housing Wage increased by 3.7% between 2002 and 2003, while inflation was 2.1%. According to the Economic Policy Institute, real median earnings have fallen throughout much of 2002 and 2003.
- The Housing Wage has increased 37% since 1999, when a person had to earn $11.08 an hour to afford fair market rent on a national basis.
- Housing costs are especially acute for families earning wages in the services sector, which continues to represent a fast-growing portion of the national economy. The average income earned by families with extremely low incomes (those at 30% or below of their area’s median income) is $8.34 an hour, yet there is no state in which an extremely low income household can afford the fair market rent on a two-bedroom home.
“It is appalling that here in America, the richest country in the world, we have millions of people working full-time, plus seniors and people with disabilities, who cannot afford decent, modest rental housing,” said NLIHC President Sheila Crowley. “Out of Reach clearly establishes that there is a gap between what people earn and what housing costs. It is time to make the housing crisis a priority and solve this problem once and for all.”
- The report also highlights the inadequacy of the federal minimum wage, which has been $5.15 an hour since 1997. Renter households in 40 states — home to almost 90% of all renter households in the nation — face a Housing Wage of more than twice the prevailing minimum wage. Eleven states have Housing Wages more than three times the minimum wage.
(more)The report will be released at a 1 p.m. press event at the National Press Club on Monday, September 8. Speakers include Crowley of the National Low Income Housing Coalition; Economic Policy Institute President Larry Mishel; Alexandria, VA, Mayor William D. Euille; Father Gerry Creedon, Chair of the Virginia Interfaith Center for Public Policy; Washington, DC ACORN (the Association of Community Organizations for Reform Now) member George Ware; and Zelna Joseph, President of N Street Village in DC. Crowley will also be available for interviews at and after the event.
“Housing is the backbone of the American economy and the linchpin of stable family and community life,” write U.S. Representatives Robert Ney (R-OH) and Maxine Waters (D-CA), Chair and Ranking Member respectively of the Housing and Community Opportunity Subcommittee of the House Financial Services Committee, in the preface to the report. “But for growing numbers of families and individuals, this foundation of family well-being is out of reach... As Out of Reach reveals, not a single community is spared the challenge of housing problems for some of its members.”
According to Out of Reach: 2003, the least affordable states and their Housing Wages are:
1. Massachusetts $22.40
2. California $21.18
3. New Jersey $19.74
4. New York $18.87
5. Maryland $18.85
6. Connecticut $18.00
7. Hawaii $17.02
8. Alaska $16.75
9. New Hampshire $16.49
10. Colorado $16.29The least affordable metropolitan statistical areas and their Housing Wages are San Jose, CA ($35.02 an hour); San Francisco, CA ($34.13 an hour); and Stamford-Norwalk, CT ($28.71 an hour).
The states with the largest annual increases in their Housing Wages are:
1. Maryland 12.09%
2. Virginia 9.07%
3. California 7.59%
4. Massachusetts 5.92%
5. Connecticut 5.70%
6. New Jersey 4.73%
7. New Hampshire 4.57%
8. Arizona 3.52%
9. Minnesota 3.52%
10. New York 3.48%For each jurisdiction, the report also provides data on the number of renters, the estimated percentage of renters unable to afford fair market rent, and the number of hours per week a person earning the minimum wage would need to work to be able to afford modest housing, among other data.
Methodology:
For each jurisdiction, the report calculates the amount of money a household must earn to afford a rental unit of a range of sizes at the area’s Fair Market Rent (FMR), based on the generally accepted affordability standard of paying no more than 30% of income for housing costs. The FMR is the U.S. Department of Housing and Urban Development’s (HUD) best estimate of what a person seeking housing would have to pay for a modest rental unit in the local market. For most areas of the country, FMRs are set at the 40th percentile rent for the area; that is, the rent at which 40% of the standard quality rental homes rent below. Data used for calculations are from the U.S. Census Bureau and HUD (see Appendix B at www.nlihc.org/oor2003/ for more details on methodology and data used).
On the Web:
The complete report, including data for every jurisdiction in the country, is available at www.nlihc.org/oor2003/. Contact information for state and local groups releasing Out of Reach is available at www.nlihc.org/states/index.htm.
Back to Out of Reach Table of Contents.
