As the coronavirus wreaks havoc on Americans’ financial health, many are wondering how they’ll afford next month’s rent, with a third missing their housing payment in July.

According to the National Low Income Housing Coalition’s ‘Out of Reach 2020’ report published on Friday, that’s been the narrative for the low-income renters well before the coronavirus reached the United States in March.

Senator Sherrod Brown (D-OH)

“The coronavirus pandemic has been the ‘great revealer,’ laying bare the inequities in our society, and reminding us how our homes affect every aspect of our lives, including our health,” U.S. Senator Sherrod Brown said in the report. “As this year’s ‘Out of Reach’ shows, the persistent gap between renters’ incomes and the cost of housing continues.”

“Many of our essential workers — grocery store employees, home health aides, custodians at hospitals — have risked their lives during the pandemic, but don’t get paid enough to afford housing,” Brown added.

The NLIHC calculated affordability based on how many hours it would take for a minimum wage worker making $7.25 to afford national fair market rental rates without spending more than 30 percent of their monthly income.

With that in mind, the average minimum wage worker must work a backbreaking 97 hours per week to afford a fair market two-bedroom rental priced at $1,246. Workers don’t receive much of a reprieve if they downsize to a fair market one-bedroom rental priced at $1,017, which requires a 79-hour workweek.

While minimum wage workers bear the brunt of skyrocketing housing costs, the NLIHC said the average American worker isn’t faring much better. To afford a two-bedroom apartment, these workers would need to make $23.96 per hour — a $5.74 gap from the current hourly average of $18.22.

“As a result, the average renter must work 53 hours per week to afford a modest two-bedroom apartment,” the report read. “Some of the most important workers during the COVID-19 outbreak earn even less: grocery store cashiers earn a median wage of $11.61 per hour while building cleaning workers and home health and personal care aides earn $12.94.”

“They would have to work 83 and 74 hours per week, respectively, to afford a modest two-bedroom apartment,” it continued.

On a state-by-state level, affordability is the worst in Hawaii, California, Massachusetts, New York and Washington where workers must earn more than $30 per hour to comfortably afford a two-bedroom rental.

On a metropolitan level, California is home to six of the 10 most unaffordable regions for low-income workers: San Francisco, San Jose, Santa Cruz, Santa Barbara, Oakland and Santa Ana. In San Francisco, the most expensive city, workers need an average wage of $65 per hour to comfortably afford housing.

Even in the most affordable states, such as South Dakota, Kentucky, West Virginia, Mississippi and Arkansas, minimum wage workers making $7.25 per hour would still need their incomes to double to comfortably live.

Beyond class, the NLIHC said race is a crucial factor, with Black and Latino workers making 25 percent and 24 percent less than their white counterparts, respectively. Furthermore, the report noted that Black, Latino, Asian and Native workers are more likely to live in overcrowded households, something that contributes to higher COVID-19 infection rates in those communities.

“Such disproportionate rates of homelessness and overcrowding mean those groups are less able to self-isolate when needed,” the report explained.

To lighten or eliminate the burden for low-income Americans, the NLIHC said average fair market rental rates would need to drop to $948 for a single, full-time worker making $18.22 per hour. For a minimum wage worker, fair market rents would need to drop to $377 per month.

In the short term, the NLIHC said extending the CARES Act eviction moratorium and providing $100 billion in rental assistance will help keep Americans in their homes. In the long term, the organization said the government should create a National Housing Stabilization Fund to provide emergency financial assistance for households on the brink of homelessness.

The NLIHC said increased funding and investing for existing programs such as the Housing Choice Voucher and Housing Trust Fund would provide new affordable housing stock and preserve current affordable housing stock for low-income Americans.

“Millions of households were already living with housing instability at the beginning of 2020, and millions of additional renters now struggle to afford their rental housing during the COVID-19 crisis,” the report concluded. “The enduring problem of housing unaffordability ultimately calls for fundamental structural reform and the investments needed to ensure housing stability in the future.”

Read the full report below:

Email Marian McPherson

coronavirus | rentals
Show Comments Hide Comments

Comments

Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
Success!
Thank you for subscribing to Morning Headlines.
Back to top
Inman Connect Black Friday Sale! Bundle our next two events or secure your 2021 All Access Pass.SEE THE DEALS×
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription