A study shows California workers must make $26.65 an hour to afford rent in the state, while the average renter's wage is 18.96.
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By PATRICK LUCE (Patch Staff)While the economy has improved and the unemployment rate has dropped in most states across the country, many people are still struggling to pay the bills, especially when it comes to rental housing, a National Low Income Housing Coalition study shows.
The problem is that while jobs have increased, wages have not, forcing roughly 21 million working Americans to scrape by on a near minimum wage salary, according to the Pew Research Center. At the same time, rents keep rising because the demand for rental units has increased across the country as the home ownership rate has dropped to its lowest point since 1989. The result is that people are being priced out of the rental market, and it’s worse in California than most parts of the country, according to The Atlantic’s City Lab. In fact, only Hawaii and Washington, D.C. are tougher on renters.
Most economists advise renters to pay no more than 30 percent of their annual income on housing. Anything more is unaffordable. Nationally, the average worker needs to make $19.35 an hour to afford the rent on an average two-bedroom home. In California, a renter needs to make $26.65 an hour.
It gets worse for people in California working for near minimum wage. Those toward the bottom of the income scale in California must work 92 hours a week to afford just a one-bedroom apartment priced at fair-market value. Many cities have rent control, plus workers are eligible for federal housing programs.
The problem continues to grow as potential homeowners are increasingly priced out of the market, instead turning to rentals, further limiting the rental stock and driving prices higher.
“The tightening rental market has the most significant impact on low income renters,” the report concludes. “Many higher and middle income renters occupy units that are affordable to lower income groups, reducing the supply of affordable and available decent apartments for the lowest income renters. As a result, for every 100 extremely low income (ELI) renter households, there were just 31 affordable and available units.”
The highest wage needed for two bedroom rentals are all in the San Francisco Bay Area:
- Marin County $39.65
- San Francisco County $39.65
- San Mateo County $39.65
- Santa Clara County $34.79
- Santa Cruz County $33.77
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