Low Income Housing Coalition: 25% Cannot Afford Rent
10.4 million U.S. households do not earn enough to afford rent, according to a report supporting the long-term viability of the National Housing Trust Fund.
The National Low Income Housing Coalition (NLIHC) released Out of Reach 2016, a report that is consistent with the federal standard that no more than 30 percent of a household’s gross income should be spent on rent and utilities. Households paying more than 30 percent of their income are considered cost burdened.
After reviewing each state using the U.S. Office of Housing & Urban Development (HUD), the U.S. Census Bureau, the Bureau of Labor Statistics, the Department of Labor and the Social Security Administration data, NLIHC finds that one in every four rental households cannot currently afford rent.
Below the affordability threshold are some 10.4 million U.S. households.
The figure is based on the two-bedroom national housing wage, the hourly wage that a full-time worker must earn to afford a modest and safe two-bedroom rental home consistent with the 30 percent federal standard. That wage is $20.30 per hour working 40 hours per week for 52 weeks per year.
The average U.S. renter earns $15.42 working full time.
In no state can a person working full-time at the federal minimum wage--$7.25 per hour--afford even a one-bedroom apartment at the Fair Market Rent (FMR). The FMR is the 40th percentile of gross rents for standard rental units as determined by HUD.
In fact, most of the rental stock in the Northeast and several Mid-Atlantic states, along with California, Washington, Colorado, Alaska and Hawaii require more than the 2016 two-bedroom national housing wage.
Today, there is a shortage of 7.2 million affordable housing units for the nation’s more than 10 million extremely low-income families. It’s a crisis that is making it ever harder for families to find housing and forcing many people to choose between doubling up in a friend’s apartment or sleeping in their car," said HUD Secretayr Julian Castro in the report's preface.
Castro went on to describe the struggle to stay housed--some 75 percent of extremely low-income families are severely cost burdened, paying more than half of their income to rent.
And it’s not just people of very modest means who are working harder to make ends meet. Last year, rising rents in a number of cities outpaced the rate of inflation, which is hurting low- and moderate income Americans," said Castro.
The new National Housing Trust Fund begins with $173.6 million to be distributed in summer 2016 to 50 states and the District of Columbia. At least 90 percent of the funds must be used to build, preserve or rehabilitate rental housing affordable to extremely low income and very low income households. The report reviews the measures before Congress that will provide additional revenue streams. The infographic below details the summary findings.