Out of Reach 2003
Out of Reach 2003:
America's Housing Wage Climbs
Where the Numbers Come From
Sample Data: Maricopa County, Arizona
| Location | Number of Households | ||
|---|---|---|---|
| Total Households | Renter Households | Renter Households as Percent
of Total Households |
|
| Maricopa County * | 1,132,886 | 368,339 | 33% |
| 2000 U.S. Census. | Number of renter households divided by total
number of households (368,339 / 1,132,886 = .33). Multiply by 100 (.33 x 100 = 33%). |
||
| 2003 Family Income | |||||||
|---|---|---|---|---|---|---|---|
| Location | 2003 Estimated Annual
Median Income (AMI)1 (HUD) |
Maximum Affordable2 Monthly Housing Cost by % of Family AMI | |||||
| Annual | Monthly | 30% of AMI | 30% | 50% | 80% | 100% | |
| Maricopa County * | $58,300 | $4,858 | $17,490 | $437 | $729 | $1,166 | $1,458 |
| Developed by HUD, based on 2000 Census family median income estimates. | Annual median income divided by 12 months ($58,300 / 12 = $4,858), | AMI multiplied by .3 ($58,300 x .3 = $17,490). | Multiply Family AMI by percent of AMI given (30% = .3) and then by by .3 to get maximum amount that can be spent on housing for it to be affordable ($58,300 x .30 = $17,490, $17,490 x .3 = $5,247). Divide by 12 to obtain monthly amount ($5,247 / 12 = $437). | ||||
| 2004 Fair Market Rents (FMR)3 by Number of Bedrooms | |||||
|---|---|---|---|---|---|
| Location | Zero | One | Two | Three | Four |
| Maricopa County * | $549 | $664 | $835 | $1,161 | $1,367 |
| Developed by HUD, updated yearly based on Consumer Price Index data or HUD regional rent change factors developed from Random Digit Dialing surveys. See Appendix A. | |||||
| 2003 Renter Households | ||||||
|---|---|---|---|---|---|---|
| Location | Renter Annual Income | Income needed to afford 2BR FMR
as Percent of renter median |
Percent of Renters Unable
to Afford 2BR FMR |
Monthly Rent Affordable
at Renter Annual Income |
||
| Maricopa County * | $34,101 | 98% | 49% | $853 | ||
| In Maricopa County, Arizona, in 1999, renters earned $30,063. The AMI figure used by HUD for 2003 is 113% of the 1999 AMI. This percentage is applied to the current AMI data as the best available method to estimate renter income in non-census years (1.13 x $30,063 = $34,101). | Multiply the FMR for the number of bedrooms indicated by 12 to get yearly rental cost (2BR: $835 x 12 = $10,020). Then divide by .30 to determine the total income needed to afford $10,020 per year in rent ($10,020 / .30 = $33,400). Divide this number by the Renter Annual Income ($33,400 / $34,101 = .98). Multiply by 100 (.98 x 100 = 98%). | Based on 2001 American Housing Survey income distribution data. | Multiply Renter Annual Income by .3 to get maximum amount that can be spent on housing for it to be affordable ($34,101 x .30 = $10,230). Divide by 12 to obtain monthly amount ($10,230 / 12 = $853). | |||
| Income Needed to Afford FMR | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Location | Amount | Percent of Family AMI | ||||||||
| Zero
Bedrooms |
One
Bedroom |
Two
Bedrooms |
Three
Bedrooms |
Four
Bedrooms |
Zero
Bedrooms |
One
Bedroom |
Two
Bedrooms |
Three
Bedrooms |
Four
Bedrooms |
|
| Maricopa County * | $21,960 | $26,560 | $33,400 | $46,440 | $54,680 | 38% | 46% | 57% | 80% | 94% |
| Multiply the FMR for the number of bedrooms indicated by 12 to get yearly rental cost (2BR: $835 x 12 = $10,020). Then divide by .30 to determine the total income needed to afford $10,020 per year in rent ($10,020 / .30 = $33,400). | The ratio of income needed for a unit with the number of bedrooms indicated (1BR: $26,560) divided by family AMI ($58,300) multiplied by 100 (($26,560/$58,300) x 100 = 46%). | |||||||||
| Location | Housing Wage | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Hourly Wage Needed to Afford
(@ 40 hrs./wk.) |
Percent Change
in 2BR Housing Wage (2002-2003) |
As % of Minimum Wage
(Arizona=$5.15) |
|||||||||
| Zero
Bedroom FMR |
One
Bedroom FMR |
Two
Bedroom FMR |
Three
Bedroom FMR |
Four
Bedroom FMR |
Zero
Bedroom FMR |
One
Bedroom FMR |
Two
Bedroom FMR |
Three
Bedroom FMR |
Four
Bedroom FMR |
||
| Maricopa County * | $10.56 | $12.77 | $16.06 | $22.33 | $26.29 | 3.60% | 205% | 248% | 312% | 434% | 510% |
| Divide income needed to afford the FMR for a unit with the specified number of bedrooms (2BR: $33,400) by 52 (weeks per year) ($33,400 / 52 = $642.31). Then divide by 40, for the number of hours per work week ($642.31 / 40 = $16.06). | Subtract 2002 figure from 2003 figure ($16.06 - $15.50 = $.56), and divide by 2002 figure ($.56 / $15.50 = .036). Multiply by 100 (.036 x 100 = 3.60%). | Divide Housing Wage by Arizona's minimum wage and multiply by 100 ($16.06 / $5.15 = 3.12, 3.12 x 100 = 312%). | |||||||||
| Location | Work Hours/Week
Necessary at Minimum Wage to Afford (Arizona=$5.15) |
||||
|---|---|---|---|---|---|
| Zero
Bedroom FMR |
One
Bedroom FMR |
Two
Bedroom FMR |
Three
Bedroom FMR |
Four
Bedroom FMR |
|
| Maricopa County * | 82 | 99 | 125 | 173 | 204 |
| Divide income needed to afford the FMR for a unit with the specified number of bedrooms (2BR:$33,400) by 52 (weeks per year). Then divide by $5.15, Arizona's minimum wage. ($33,400/52 = $642.31; $642.31/$5.15 = 125 hours). | |||||
| C H A R T F O O T N O T E S | |
|---|---|
| 1. | HUD, 2003. |
| 2. | "Affordable" rents represent the generally accepted standard of spending not more than 30% of income on housing costs. |
| 3. | HUD, 2004, proposed. |
| 4. | Annual income of 30% of AMI or less is the federal standard for extremely low income households. Does not include HUD-specific adjustments. |
| D A T A F O O T N O T E S | |
|---|---|
| Arizona: | FMRs for jurisdictions labeled with an asterisk (*) have FMRs calculated at the 50th percentile. See Appendix A for explanation. |
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