Minimum wage earners struggle to pay for housing, coalition finds
If you make minimum wage, finding affordable housing is nearly impossible no matter where you live in the United States, including Pennsylvania.
That is according to an annual report released on Monday by the National Low Income Housing Coalition, a Washington-based advocacy organization, that found low-income families everywhere struggle to cover rent, and would continue to struggle even if the federal minimum wage was increased.
At a time when the rental market is tighter than it has been in 12 years and the federal minimum wage remains at $7.25 per hour, millions of Americans are finding it difficult to pay for housing, said Barry Zigas, director of housing policy for Consumer Federation of America.
“Everyday people, going to work every day, cannot earn enough to pay for housing costs,” said Zigas, a past president of the coalition, in a conference call with reporters.
In Pennsylvania, a dual-income household in which both earners make minimum wage would not take home enough to keep housing costs — rent and utilities — to 30 percent of their income, a standard benchmark for housing affordability, according to the report. A Pennsylvania household would need to earn $17.33 an hour to afford a two-bedroom home that costs the local fair market rental price, as determined by the Department of Housing and Urban Development.
Pittsburgh, where roughly 30 percent of households are rentals, is among the state’s most affordable metro areas. Still, a household would need to earn $15.17 an hour to afford a two-bedroom rental unit at HUD’s fair market standard.
Nationally, Pennsylvania is near the middle of the pack on housing affordability. The average American household would need to earn $18.92 an hour to afford a two-bedroom home. The most expensive state is Hawaii, at $31.54, and the least expensive is Arkansas, at $12.56.
Demand for rental properties after the housing crash has increased substantially, and prices have risen as a result. The average rental price increased 3.2 percent last year, according to the report. However, new units coming on the market have targeted high-income earners, even though one out of every four renters is considered extremely low-income, with annual incomes typically less than $19,700.
“There’s a significant gap between what people with low wages earn and what housing costs,” said Sheila Crowley, president and CEO of the coalition.
The report arrives as President Obama and many Democrats call for increasing the federal minimum wage to $10.10 per hour. Business groups and conservatives have said raising the benchmark would lead to job losses rather than gains, because employers could no longer afford to hire them.
Raising the minimum wage would help millions of low-income workers but alone will not solve the affordable housing problem, Crowley said.
Rather, more affordable housing must be built. A trust fund established as part of the Housing and Economic Recovery Act of 2008 could provide grants to encourage some of that development, though the trust fund is still being built up with capital after years of waning during the recession, she said. Reforms to local and state regulations could help lower costs for developers of affordable housing.
“We’d really like states to experiment with new models for creating housing that is affordable to this group,” she said.
Chris Fleisher is a staff writer for Trib Total Media. He can be reached at 412-320-7854 or [email protected].