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CT Coalition to End Homelessness
Public Housing Residence Network
Affordable Housing
The most common theme heard on our tours...
Most Americans who rely on just their full-time job earnings at the federal minimum wage ($5.85 an hour) cannot afford the rent and utilities on a one or two bedroom apartment. Even with the eventual increase in the minimum federal wage to $7.25 in 2009 and the increase in state minimum wages (44 states and Puerto Rico), the number of hours a household must work still ranges from 66 to 120 hours each week or 1.6 to 3 .0 full-time jobs. Currently there is no county in the country where an individual can work 40 hours per week at the minimum wage and afford even a one-bedroom rental unit at the Fair Market Rent (FMR).
For a two bedroom apartment, a worker in Connecticut would have to earn at least $21.11 an hour ($17.42 for one bedroom). The National average “Housing Wage” for a two-bedroom rental unit is $17.32 and the average Fair Market Rent is $900 a month. The annual income needed to afford a FMR of $900 is $36,019. The National renter wage is $13.94. The average renter needs to work 50 hours per week to afford an FMR of $900 for a two-bedroom home. A fulltime job at the National renter wage falls short of providing enough income to afford even a one-bedroom home at the FMR.This is according to the National Low Income Housing Coalition and outlined in its 2007-2008 Out of Reach report. The National Low Income Housing Coalition’s Out of Reach annual report outlines the availability of affordable apartments nationwide.
Out of Reach is a side-by-side comparison of wages and rents in every county, metropolitan area, combined non-metropolitan area, and state in the United States.
The “housing wage” is the full-time hourly wage one would need to earn in order to pay what the Department of Housing and Urban Development (HUD) estimates to be the FMR for an apartment where you live. The Coalition's "housing wage" assumes that a family spends no more than 30 percent of its gross income on rent and utilities, since the government generally considers anything more than that unaffordable.
Yet many poor Americans pay more than they can afford because wage increases have not kept up with increase in rent and utilities. Again, this is according to the National Low Income Housing Coalition.
The median hourly wage in the US is $16.00. More than one quarter of the population (more than 72 million) earn less than $10 an hour.
About 36.5 million homes in the United States are rented. Approximately 18.5 million do not earn enough to afford the average FMR for an appropriately sixed unit in their state. In 2996, more than 9 million renter households nationwide paid more than half of their income for housing and 98% of them were considered low income. Nationally, an Extremely Low Income household earns roughly $18,800 and, since housing costs should consume no more than 30% of income, they can only afford to spend approximately $470 on gross rent each month. Fewer than 1 in 10 renter households live in an area where the FMR for an apartment us affordable to an extremely low income household in the community.The two-bedroom Housing Wage ranges from $29.02 in Hawaii to $9.10 in Puerto Rico. Connecticut's hourly wage to afford a two bedroom apartment is $21.11.
An area’s FMR and its corresponding Housing Wage provide an indication of how expensive it is to rent there. The area with the highest rent is the most expensive, but for an idea of how affordable a particular rent is, one must look at how much renters earn in the labor force. A place may have relatively high rents, but its employment opportunities may make it more affordable than a nearby town with lower rents but fewer good paying jobs.
In Connecticut, the Fair Market Rent for a two-bedroom apartment is $1,098. In order to afford this level of rent and utilities, without paying more than 30% of income on housing, a household must earn $3,659 monthly or $43,911 annually. Assuming a 40-hour work week, 52 weeks per year, this level of income translates into a Housing Wage of $21.11.
In Connecticut, a minimum wage worker currently earns an hourly wage of $7.65. In order to afford the FMR for a two-bedroom apartment, a minimum wage earner must work 110 hours per week, 52 weeks per year. Or, a household must include 2.8 minimum wage earner(s) working 40 hours per week year-round in order to make the two bedroom FMR affordable.
In Connecticut, the estimated mean (average) wage for a renter is $16.53 an hour. In order to afford the FMR for a two-bedroom apartment at this wage, a renter must work 51 hours per week, 52 weeks per year. Or, working 40 hours per week year-round, a household must include 1.3 worker(s) earning the mean renter wage in order to make the two-bedroom FMR affordable.Monthly Supplemental Security Income (SSI) payments for an individual are $637 in Connecticut.
If SSI represents an individual's sole source of income, $191 in monthly rent is affordable, while the FMR for a one-bedroom is $906.
