Here's how much you need to make in each US state to rent a two-bedroom apartment

[damnedifIknow]

Yes, the American economy is improving, and yes, we’re creating more jobs. But the hourly wages for a lot of these jobs are stagnant at best. According to the Pew Research Center, 30 percent of America’s workforce earns a near-minimum-wage salary—that’s almost 21 million people. As a cruel paradox,rents across the country keep rising."



http://www.businessinsider.com/heres-how-much-you-need-to-make-in-each-state-to-rent-a-two-bedroom-apartment-2015-6

[marym625]

1. That is interesting

I am sure in other states it's the same but no way can you get a 2 bedroom in Chicago making that. I would guess downstate it's more like $15 and Chicago more like $22

[Fearless]

9. It is an average.

[Eleanors38]

43. It's like Austin. That TX average won't get you squat, here.

[merrily]

53. Same deal with the city of Boston, especially "Boston proper."

[3catwoman3]

2. Hmmmmmmmmmm.

I don't see any states where the minimum wage would suffice. Imagine that.

[Recursion]

3. Is the goal for one person making the minimum wage to be able to afford a 2BR?

Honestly I kind of wish we'd frame it more like that:

"We want someone making the minimum wage to afford (some list of things) in (some market we'll pick as average)" and then calculate based on that.

[Kalidurga]

4. In general one person does not need a two bedroom apartment.

When my oldest went out on her own she rented a studio, then her sister lived with her for a short time. They saved up enough to put a down payment on a rather large house that they share, it's about double the size they actually need. At the time neither of them were making much more than minimum wage, now they both make well over that. I lost my point somewhere. Oh yes, I agree with you on the point that 2 bedrooms for a single person is probably the wrong target. I would be happy to set the standard at one bedroom per person. I don't think studio living should be a long term housing option if we can do better than that.

[Recursion]

5. When I was a kid we mostly lived in shared houses

Family of four renting two bedrooms of a four bedroom house, say (that's much cheaper than renting your own 2BR, though obviously it's less desirable).

I don't think studio living should be a long term housing option if we can do better than that.

I'd agree with the caveat that in some markets (say, Manhattan or SFO) I'm OK with most people either being stuck with a studio or having to share a larger apartment with housemates.

One thing this will require, though, is getting rid of "historic look" and maximum height requirements. If we want housing to be affordable in cities, then cities have to get a lot more dense. Apartments are affordable in (much of) Queens because it's the same density as Mumbai.

[Kalidurga]

6. I agree ceiling heights in some cases are ridiculous

9 ft ceilings are rarely needed, unless one is 8 ft tall. And I think going more compact is a good idea as well. But, I don't want to have it so people are living like sardines if they don't want that lifestyle I think people should be able to make enough so they can have options. I don't however think that it should just be given to people right out of the gate, but we have a real problem with companies not giving raises where they should be doing so and finding reasons to fire people once they reach their wage ceiling for that job. It's happening to my SO right now, his boss admitted as much saying he would find reasons to write him up. He is switching shifts now to avoid that.

[Lochloosa]

26. Who needs headroom?

[awoke_in_2003]

50. I would die in that

I don't need 9 ft ceilings, but I am claustrophobic

[JDPriestly]

55. I could not sleep in one of those coffins either. Who could?

[JDPriestly]

54. High ceilings in cold climates mean high heating bills.

[JDPriestly]

21. Two families sharing housing is substandard housing in the US.

I'm beginning to understand why you and I disagree about US trade policy.

Americans expect and deserve a higher standard of living than families sharing housing.

Sorry! But we have to do better than that in America. This is not the third world. Our ancestors fought for our democracy and for a decent standard of living.

No to two families sharing a small apartment. The other side of that equation is that some families live in huge mansions. The US stands for equality, not for a caste system of haves and have nots.

[Recursion]

24. When has it not been normal for families to share housing?

I'm not talking about the comfortable middle class with picket fences and stuff; I'm talking about working poor families like mine was. Pretty much everybody I knew growing up (this was in Dallas) shared a house with someone one way or another (lots of very extended family, or friends, etc.) I'm pretty sure that's been normal for working families for the entire history of the US.

[JDPriestly]

52. No. Not unless all are members of an extended family.

The expectation is a three-bedroom house. In big cities, we often get only two bedrooms.

Working people used to enjoy a middle class lifestyle.

Trade agreements and our special little arrangement with China have changed that. We are worse off than we used to be with respect to the big things in life.

[Fearless]

10. Two bedrooms allows for a child or children.

[Kalidurga]

23. Yes I know this.

When I had children we were always in at least a two bedroom apartment. What I am talking about is a single person no children. They exist. Two of my three children are single. They live in a house together. It's big enough for up to eight people. So, if they were to have children they would have plenty of room. I wish that everyone made as much as they do and could decide if they want a bigger house than they need to grow into, or if they were going to get something smaller and save money and get the size of house they need when that time comes that they need a bigger house.

[Fearless]

41. The issue is that single parents need jobs they can raise a family on.

[whatthehey]

31. Well a person needs somewhere to live, and any kids should have a bedroom, but my question

Is why all these articles on this topic almost never define what the rent they are using is, and whenever they do it is typically the median or average rent.

That's using two very different variables and very different demographics. Median and average wage earners should be concerned with paying median and average rents. Low and minimum wage earners should be concerned with paying lower end rents. The housing market has a wide range.

In my very affordable area, rents on craigslist for 2br apts run from 400 to 2000. Would this survey have concluded it needs 750-800 a month to rent one (a rough eyeball mode/median) or 1200 with an average skewed to the high end as there is more space on that side of the scale?

In either event it would have outpriced perfectly livable places. I rent out a few 2br HOUSES myself for $500 in far from the lowest neighborhoods.

Without info on rent used, this could easily be misleading and worthless. I know for a fact few of my renters make as much as is supposedly "needed" in this state. And they are in houses, not apts.

[JDPriestly]

51. Yes. That's the goal. It is called the American dream, and we like to pretend it is or should

be the reality.

It's just this odd idea about "all men being created equal." We really think that every working person should be able to afford running water, electricity, sewage, access to a fire department and police assistance ------ and, amazingly enough decent housing. Two bedrooms is a small apartment. Any working person deserves to be able to afford that. We are supposed to be the richest country on work. Maybe if you want to live in Manhattan or the West Side of La, you will have to settle for something a little less pricey. But we do believe that every person who is working should be paid enough to afford good housing.

[geek tragedy]

7. This is a stupid metric. Single earners need either

the 1br rent or 1/2 of the 2br rent.

Married/cohabiting couples need even less.

My wife and I shared a 1br until I was 31 and she was 27.

[SunSeeker]

18. It's not stupid. Single moms with kids need 2 bedrooms. nt

[demwing]

20. Single dads dont?

just pile us up in the same rooms with our kids, guys don't require privacy, we're just guys after all...

[SunSeeker]

22. Of course they do. I was just giving the most common example.

An example I know from personal experience, as I discuss down the thread.

[demwing]

32. I know, I'm just messin'

[davekriss]

29. It is not stupid at all

It informs what a family with kids needs to earn to afford a 2 bedroom apartment. What's stupid about that? It's information, that's all.

That "family" might be a single parent with 1 or more kids, or a traditional nuclear family. Once kids are in the equation, having as a goal an affordable 2 bedroom apartment is reasonable.

I believe there are more families of this sort than single households. The metric is not useful for the latter.

[geek tragedy]

33. vast majority of families have both parents working. nt

[davekriss]

38. Yup

And for them the metric called "stupid", above, is highly relevant. Therefore it's not stupid at all.

[Gormy Cuss]

40. A 2 BR metric is standard for this comparison among housing researchers

largely because it's the standard used by HUD and other housing agencies.

NLIHC has been doing an annual report like this for years. It's worth noting that the 2 BR metric is based on HUD Fair Market Rents, which are calculated as the cost for gross rent at the 40th percentile of rentals on the market -- IOW, these rent calculations are less than the median rents in an area.

It's also worth noting that the same report compares the minimum wage to 1 BR Fair Market rents and this is a statement from the same report :

In no state can a person working full-time at minimum wage afford a one-bedroom apartment at the Fair Market Rent.

Every year since 1989 Out of Reach has shown the gap between wages and rents across the country and the gap continues to grow as the cost of housing increases more quickly than earnings. A renter earning the federal minimum wage of $7.25 per hour would need to work 85 hours per week to afford a one-bedroom rent at the Fair Market Rent and 102 hours per week to afford a two-bedroom Fair Market Rent.

[whatthehey]

44. Ah good more info

So if we are looking at the 40th percentile of rents, why are we not comparing it to what the 40th percentile or just sub-median wage earners can afford?

Worrying that <10th percentile earners can't afford 40th percentile rents is like worrying that minimum wage workers can't afford a $25k (also sub-median) new car. Perfectly true, but doesn't mean that there aren't perfectly acceptable 2br apartments, or cars, priced at a comparable level on their price ranges.

In other words, who is supposed to be looking at rents for apartments in the 1st-39th percentiles if not minimum wage earners and low income folks? The vast range of housing prices needs to serve everyone from the lowest to the highest incomes. Comparing prices and incomes at wildly differing levels is absurd. I can't afford a 99th percentile house in my state, but I shouldn't, and don't, care because I'm not in that income bracket.

Those hourly numbers look far more in line with middle of the road earners. which is what middle of the road rents are intended to do.

[Gormy Cuss]

45. Because it's an affordability marker for minimum wage earners

It's not presuming that low wage workers aren't looking at the cheapest rents around or aren't willing to settle for substandard housing in order to make it affordable.

FMRs were used to set the maximum tenant subsidy payable in programs such as Section 8. The 40th percentile cutoff forces tenants to look at lower end housing but not at substandard housing (HUD uses a basic set of habitability standards to determine the latter.)

[whatthehey]

46. But why choose the 40th percentile for a <10th percentile earner?

That's an aspirational metric not an affordability metric. Nobody would take seriously a report that said the median wage earner couldn't afford a 90th percentile residence so why is it any more news that a minimum wage earner (currently about 4.3% of workers) can't afford a 40th percentile residence? Why not compare their hourly earnings to a 5th percentile rent like their income? They'd still have a tough enough time to make the point effectively without it being an unrealistic metric.

Ignoring the false implication that anything under 40% is "substandard", why does that section of the housing market exist and to whom is it marketed if not the lower end earners? It's a bit disingenuous for people to complain there is insufficient low income housing (which is true especially in hot markets) and then use a mid-priced rental that is completely out of the realm of low income housing to show they can't afford to rent a place. At least use low-income housing rents for affordability measurements.

According to the link below, the 40th income percentile is at about 33K or $16 and a bit an hour. This shows that some median earners in some states will have a tough, and in some cases insurmountable, issue finding their own non-shared place with 2 br. That tells us something meaningful that may be worth addressing, not the definitional issue that low/minimum incomes and mid-price rentals are out of alignment.

http://www.whatsmypercent.com/

[Gormy Cuss]

49. Again, the 40th percentile is the basis for HUD FMRs

Last edited Mon Jun 15, 2015, 11:24 PM - Edit history (1)

and it's a gross rent calculation (meaning utilities are included) used to establish maximum tenant subsidies. That calculation excludes properties that have health and safety conditions that HUD deems as substandard (e.g. inoperable windows in bedrooms, faulty wiring, lack of working plumbing in the bathroom, and other h&s deficiencies. ) There was no implication that units below the percentile are substandard, rather that substandard units aren't eligible for subsidy and should be excluded from the base. And the reason to use HUD's FMRs beyond simple availability is that it does define the market segment for low income households eligible for HUD subsidy.


NLIHC chooses to use HUD's FMRs as a benchmark to compare what minimum wage workers could potentially afford, presumably because the minimum wage is a recognized bottom income for full time employed workers. It's not meant to be a description of what housing solutions are used by minimum wage workers, rather it's a way of describing affordability gaps.

[TexasBushwhacker]

58. I agree with you

I think it would be more meaningful to show a range of apartment costs, low, middle and high, for a certain area. I live in Houston. You can still find 1 br apartments for less than $500 a month, but I wouldn't want to live in them. I don't have to because I make roughly twice the minimum wage. If there were NO apartments that people could afford, that would be cause for concern. When the average family can't afford the average home, that's a problem. But to say someone making MINIMUM wage can't afford the AVERAGE rent of a 2 bedroom apartment makes no sense to me.

Since I'm in my late 50s, I looked into senior apartment communities. The were new and nice and subsidized for low income seniors. But the subsidized rent for a 1 br was $760, and for that you couldn't make more than $27K. Well if I was making $27K, $760 rent would be too much, IMO.

[Aerows]

8. What does one person need with a 2br place?

Heck, I was making more than that and lived in a 1br, simply because I wasn't home enough and didn't have enough junk to care about having anything bigger. It had a dishwasher, a washer/dryer, bathtub and shower, and a decent kitchen.

What the heck else does a single person (or really even, a young couple with no kids) need?

[Fearless]

11. Yet if you do have kids...

You still only have a minimum wage job. Should the expectation not be set that we can afford to raise children in this country?

[Recursion]

25. That gets to my question: is the minimum wage supposed to support a family, or a single person?

I don't think we've ever actually said what we intend for the minimum wage to do. (For some value of "we".)

[Fearless]

42. Should the poor not be allowed to have children because they're poor?

Certainly not. Minimum wage should be a living wage and you should be able to raise a child on it. This isn't even a question. That's half the reason the program exists!

[Spitfire of ATJ]

12. Some people use the extra room for an "office". (Meaning computers)....

Not so much now.

People don't like to have a desk with a computer on it so much these days. Feels too much like being at work. Computer desks are about as popular as those big honking entertainment centers designed to hold a square tube type TV and the mandatory VHS storage.

People are on pads. (We have 3 but I still like my computer with a mouse and keyboard.)

[SunSeeker]

16. The 2nd bedroom is usually for a kid (s).

Are you saying someone on minimum wage is not to have kids?

My mom was a single mom, raising me and my brother. She got minimum wage, which in 1980s L.A. meant she could only afford a studio apartment--not even a one bedroom--despite working full-time. Now it is even worse. If she had been paid a living wage, one that kept up with increases in worker productivity, she would have been able to afford a two bedroom apartment.

[Ghost in the Machine]

13. There are many other factors involved than just wages.. what part of the State comes into play..

as well as other issues. I found my daughter a 3 bedroom, 2 bath mobile home on a little over 2 acres for $26,000 to purchase! She only put $1,000 down on it, and her payments to OWN it are only $250.00/mo.

Location is a big issue. This is a small town and we live out in the country. The place is right across the street from me. I bought mine for less than $75,000, but it's 15 acres and had 4 homes on it. We have to drive 15 miles one way to go to town for a grocery store or department store. The closest "corner store" is 3 miles away!

Peace,

Ghost

[a la izquierda]

28. You got that right

Most of West Virginia is dirt cheap, yet housing in Morgantown is something like 10% higher than the national average (I forget the exact numbers).

[SoapBox]

14. Read the article at the link...

There are mentions of families and one bedroom apartments.

Bottom line here is...rents have risen much faster than wages and there is now a shortage of rentals.

[NewSystemNeeded]

15. Rent.

Yet another thing that shouldn't be determined by the market.

[Recursion]

17. How do you want to determine rents without a price signal? (nt)

[SunSeeker]

19. K & R

[hobbit709]

27. Pushing $1000/mo per br here in Austin for mediocre housing.

[treestar]

30. Wow over 43K per year

Seems like a lot.

Though a two BR would likely mean two people.

[B2G]

37. What state are you referring to?? nt

[treestar]

56. Delaware

[Hugin]

34. Something unclear to me in this article.

Is this the total of income going strictly to housing or is food, utilities, and healthcare deducted?

If it is all of the income going to shelter, this chart is much much worse.

Terrifyingly worse.

[sl8]

35. It looks like this is based on 30% of gross earnings spent on rent & utilities.

http://nlihc.org/sites/default/files/oor/OOR_2015_FULL.pdf

[Hugin]

39. Whew... (sort of)

Glad to see things haven't gone completely off the rails. You never know, lately the attempts to divide incomes into 4 or 5 halves have been the norm.

Thanks for the research. I appreciate your doing so.

[sl8]

47. You're welcome. I was curious, as well. n/t

[sl8]

36. Link to report referenced in article:

National Low Income Housing Coalition
Out of Reach 2015:
http://nlihc.org/oor


Full Report
http://nlihc.org/sites/default/files/oor/OOR_2015_FULL.pdf

[DemocratSinceBirth]

48. I am in L A

You would be hard pressed to afford a two bedroom apartment on 27K a year.

[Liberal_in_LA]

57. yes. person making 27k would be taking home about $1800 per month

Best to limit housing cost to under $900. That would get u a studio maybe

[fizzgig]

59. it would be tough to afford a one bedroom in my city on 27k a year

assuming 1) this is net, not gross, 2) you're only spending 33% of your income on rent 3) the only basic utility you're paying is electric.

three years ago, the husband and i were paying $700 for a 650-square-foot two bedroom, all utilites (net/satellite included) shithole that's now going for $950 a month, including the utility fee. i can't imagine trying to afford to live somewhere like la.

average rent for a two bedroom here is about 1100 plus at least electric (i have to have internet but haven't paid for tv in years) and that's about half what we bring home a month. we can't even afford to buy here, but i'm formulating a plan to start socking away money for a down payment on a mobile home.

[JI7]

60. in LA you are lucky if you can get a studio for just around 1000

[sl8]

62. The chart in the OP shows CA at $26.65/hour or $55,433/year

I'm not sure where the $27k/year you referenced is coming from.

[Politicalboi]

61. And just think

In 5 more years the minimum "might" be $15.00. Everybody hold your breath for another 5 years.

[One_Life_To_Give]

63. Transportation or Lack of has a huge impact even within states

Being within walking distance of basic necessities has a huge impact on housing cost. Alternatively low cost housing frequently has an additional cost to secure the transportation necessary to reach basic needs. $500 per month might not be such a deal when it's 20 miles to the nearest grocery.

[alarimer]

64. Around here, a one-bedroom goes for close to $1200 a month.

It is over half of my monthly take-home pay at $44,000 (gross) a year.

Any apartments that cost less are complete shitholes, substandard even for rats.

I do get to live close to work; that was the trade-off I made. Live close, pay slightly more or live farther away and spend the savings on gas for the commute.

Affordable housing is a serious issue. Everybody in this thread needs to read "Nickel and Dimed", if they haven't already. Ehrenreich talks a lot about this very issue. All the complaints about the methodology are beside the point. It is a FACT that housing is unaffordable in many places in the country. When housing is affordable to someone on minimum wage, it is a rat-infested shithole.

No one should have to live 10 to a room anywhere.

[mnhtnbb]

65. My son is paying $895./mo for a studio in New Haven, CT

within walking distance to grad school at Yale. He does not drive (legally blind)
so commuting is a hassle for him. Even when he finishes school, he will have to find work
most likely in a town or city with excellent public transportation. Living somewhere out
in the country will not be an option for him since he is unable to drive.

I just ran the numbers: he'd need to have an income of almost $30K/year for that rent to
be 36% of his income, which is supposedly not more than the ratio you should
be paying in order to have sufficient disposable income to meet all your other bills (and put
some aside for savings). Right! How are you supposed to do that when you're in school?!?

[alarimer]

66. Roommates, apparently.

I do get that Americans are unique in that they live alone for large parts of their lives (well, some of us, anyway). I personally am willing to pay more to live alone, or share only with a significant other.

Cities with excellent public transportation are ALSO some of the most expensive housing markets in the country. Because public transportation does not extend to suburbs, that means he will have to live in the city, which would be more expensive.

The places with lower costs of living (most of Texas except Austin) are also terrible for public transportation options.

The fact is the cost of housing has far outstripped salaries. Wages have generally stagnated for 40 years or more, but housing costs have not. Now, an argument could be made that we need to ditch the suburbs (I wish) and live more densely, but we can't get there from here very quickly. In the meantime, many low-wage workers have to live in substandard, even unsafe conditions.