Report: Wages don’t keep up with U.S. rental costs

Monday, Dec. 20, 2004 | 11:11 a.m.

SUN STAFF AND WIRE REPORTS

WASHINGTON -- Nevadans who rely on just a full-time job earning the federal minimum wage cannot afford the rent and utilities on a one- or two-bedroom apartment, an advocacy group on low-income housing reported this morning.

The National Low Income Housing Coalition, in its annual "Out of Reach" report, found that average workers in Nevada -- like most other states -- are hard-pressed to afford the average rent and utility rates in what were once considered affordable area apartments.

For a two-bedroom rental alone, the typical American worker must earn at least $15.37 an hour -- nearly three times the federal minimum wage, the housing coalition found.

That figure assumes that a family spends no more than 30 percent of its gross income on rent and utilities -- anything more is generally considered unaffordable by the government.

Yet many low income Americans are paying more than they can afford because wage increases haven't kept up with increases in rent and utilities, said Danilo Pelletiere, the coalition's research director.

Working Nevadans did not fare well in the study. It found that in Nevada, the average renter must earn at least $16.92 an hour to afford a two-bedroom apartment and utilities here, making the state the 10th least affordable place in the nation, the housing coalition found.

A recent study commissioned by the Annie E. Casey Foundation found that nearly three-quarters of low-income Las Vegas families shell out more than a third of their monthly income to pay the rent, outpacing the national average.

Darryl Martin, director of Clark County Social Services, said the numbers point to a problem that "just gets worse" as rising rental costs have sparked an increase in the number of homeless famililes living on the county's streets.

"Now you see increased numbers of women and children (on the streets)," he said. "That's what happens when you have this rental market. It's pretty scary. Some of our folks will never own a home but now many of them are having trouble just renting."

The median hourly wage in the United States is about $14, and more than one-quarter of the population earns less than $10 an hour, the report said.

Even those living in areas with below-average housing costs are feeling the pinch.

"A lot of people continue to be squeezed out," said Judy Levey, executive director of the Homeless and Housing Coalition of Kentucky. "Housing here is relatively inexpensive, but because the wages are so low, people can't afford housing."

The report quoted federal Bureau of Labor Statistics data that showed hourly wages rising about 2.6 percent over the past year, slower than the 2.9 percent rise in rents recorded in the Consumer Price Index.

In addition, Pelletiere said, government spending on Section 8 rental vouchers, which helps 2 million Americans -- mainly poor -- pay rent hasn't kept up with demand.

To qualify for Section 8, apartment managers must agree to stabilize rent at 30 percent of an applicant's income, no matter what their income may be.

The Clark County Housing Authority, which manages the county's roughly 2,500 Section 8 vouchers, earlier this month said that rising housing costs are only part of the problem for local low-income families. High on the list for many families, even after their rent has been stabilized, is child care, which can cost up to $500 a month.

The more recent rent affordability study analyzed data from the Census Bureau and the Housing and Urban Development Department to derive the hourly wage figures.

In only four of the nation's 3,066 counties could a full-time worker making the federal minimum wage afford a typical one-bedroom apartment, the coalition said. Three were in Illinois: Clay, Crawford and Wayne counties; the other was Washington County, Fla.

California topped all states in the hourly wage needed to afford a two-bedroom apartment, at $21.24, followed by Massachusetts, New Jersey, Maryland and New York.

States with more residents in rural areas were generally the most affordable, although no state's housing wage was lower than the federal minimum wage of $5.15 an hour, which has not changed since 1997.

West Virginia was the lowest at $9.31 an hour for a two-bedroom rental, followed by North Dakota, Arkansas, Mississippi and Alabama.

Pelletiere said the coalition's data for 2004 could not be compared with previous years because of changes in the way that HUD calculated "Fair Market Rents," which is the cost of rent and most utilities for a typical apartment. The fair rent varies widely by metropolitan area.

Overall, though, utility costs appear to be rising at a faster rate than rents, Pelletiere said. Add in stagnant wages and the housing situation for the nation's poor "has gotten worse over the last year," he said.