A good financial rule of thumb is to spend no more than 30 percent of income on housing.
But in no state can a minimum-wage worker putting in just 40 hours a week afford a modest two-bedroom rental home without spending much more than that, according to a new study by the National Low Income Housing Coalition.
In the Dayton metro area, a worker earning $14.69 an hour can afford a two-bedroom apartment without working overtime. But at minimum wage, a worker here must put in about 74 hours a week to keep housing costs at 30 percent of income.
Nationally, a worker not exceeding the 30 percent threshold on a two-bedroom rental needs to earn $21.21 per hour. That’s almost three times the federal minimum wage of $7.25 an hour. The 2017 national “housing wage” for a one-bedroom rental home is $17.14, or 2.4 times higher than the federal minimum wage, according to the study.
The nation’s highest housing wage needed to afford rent for a two bedroom place is $35.20 in Hawaii.
Ohio fares better than 39 other states and the District of Columbia in two-bedroom rental housing affordability. But it still takes $15 an hour for an Ohioan to afford the rent in a state where the minimum hourly wage is $8.15, according to the report.
In Ohio, the fair market average rent for a two-bedroom rental is $780. Without paying more than 30 percent of income on rent and utilities, a household needs to earn $2,600 monthly or $31,194 annually, according to the report.
The gap is the greatest in Columbus, where a renter typically needs to make a little more than $17 an hour to spend no more than 30 percent of income on housing.
Other key findings of the report:
Higher-paying jobs not materializing: Six of the seven occupations projected to add the greatest number of jobs by 2024 provide a median wage that is not sufficient to afford a modest one-bedroom rental home.
No rentals affordable for poverty-stricken: Those with an extremely low household income less than the poverty level cannot afford the average cost of a modest one-bedroom rental home in any state.
Higher minimum wages not enough: Despite minimum wages higher than the federal level in many states and jurisdictions, in only 12 counties nationwide can a full-time minimum-wage worker afford a modest one bedroom rental home.
Rent taking majority of income for millions: Due to low-paying jobs and the high cost of rent, more than 11.2 million households spend more than half of their income on housing.
Housing poverty: More than 20 million renter households live in housing poverty, meaning they cannot afford to meet their other basic needs like food, transportation, medical care, and other goods and services after they pay for their housing.