The Unaffordable Reality of Renting in Major US Cities
For many Americans, finding an affordable place to live is a daunting task. The general rule of thumb is to spend no more than 30% of your income on housing costs. However, this guideline is unrealistic for minimum wage workers in several large US cities.
The Struggle to Make Ends Meet
A recent report by Clever Real Estate reveals that in seven major cities, workers would need to earn more than four times the federal minimum wage of $7.25 to afford a fair market rent without breaking the bank or taking on a second job. This stark reality highlights the significant gap between wages and housing costs in these cities.
The Data Behind the Crisis
To determine the minimum wage required to afford a fair market-priced rental in the 50 largest US metros, Clever analyzed data from various sources, including the US Department of Labor and the Department of Housing and Urban Development. The report defines fair market rent as the price at which 60% of similar units in the area rent for more than the listed amount and 40% rent for less.
Cities Where Rent is Out of Reach
In seven major US cities, workers would need to earn quadruple the minimum wage to comfortably afford rent. For example, in these cities, a one-bedroom dwelling would need to be priced at $377 a month for a minimum wage worker to afford rent without struggling. However, finding a unit at this price is increasingly difficult.
The Rising Cost of Rent
Since 2019, rent prices across the country have skyrocketed by 30.4%, according to a May analysis from Zillow and StreetEasy. Meanwhile, the federal minimum wage has remained stagnant at $7.25 per hour since 2009. As a result, spending more than 30% of one’s income on rent, also known as being cost-burdened, is becoming more common across income levels.
A Growing Crisis
A 2024 report from Harvard University’s Joint Center for Housing Studies reveals that a record 22.4 million renters were considered cost-burdened as of 2022, with around 12 million of those renters severely cost-burdened, spending over 50% of their income on housing and utilities. The report emphasizes the need for collective action to address this pressing issue, stating that “ensuring that everyone has equal access to safe, affordable, stable housing is one of the nation’s most pressing challenges.”
A Call to Action
The struggle to afford rent is a harsh reality for many Americans. It is essential for policymakers, employers, and individuals to work together to address this crisis and ensure that everyone has access to safe, affordable housing.
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