WASHINGTON – Affordable rental housing may be unattainable for many Rhode Islanders, according to a new reported released by the National Low Income Housing Coalition. The report, Out of Reach 2012, is a comparison of wages and rents in every state, metropolitan area and county in the nation.
Even though the recession temporarily stymied the rising cost of housing across the United States, Rhode Island still has one of the highest rental costs in the nation – ranking 17th, according to the Washington, D.C.-based housing advocacy group.
Hawaii has the highest rental costs in the country and Puerto Rico has the lowest. Massachusetts, Connecticut, Vermont and New Hampshire all ranked in the top 15 in the nation for unaffordability.
The NLIHC report highlighted the gap between housing costs in an area and a renter’s ability to pay for that housing. It is defined as the difference between the hourly wage a household needs to afford a two-bedroom apartment at the fair market rate and the average wage for a renter. Rhode Islanders faced some of the largest gaps, ranking eighth in the country.
In Rhode Island, the fair market rate for a two-bedroom apartment is $924. In order to afford rent and utilities – without paying more than 30 percent of total income on housing – a household must earn an annual salary of $36,974.
Assuming a 40-hour work week, 52 weeks a year, the housing wage required to live in a two-bedroom apartment in Rhode Island is $17.78. However, the average wage for a Rhode Island renter was listed as $11.64.
To afford the fair market rate on a two-bedroom apartment at the average hourly income, a renter would need to work 61 hours a week, 52 weeks a year, or the household would need 1.5 workers earning the average renter wage in order to afford the apartment.
For one minimum-wage worker to afford the fair market rate for a two-bedroom apartment, he would need to work 96 hours a week, year round, or the apartment would need to include 2.4 40-hour-a-week workers.
Rhode Island is not alone in these shortfalls. Nowhere in the United States can an individual working full time at minimum wage afford the fair market rate on a two-bedroom apartment for his or her family. According to the report, in most states, even workers earning the average hourly wage were unable to afford the fair market rate in their state.
“This report verifies what we are seeing day to day here in our state,” said Brenda Clement, executive director for the Housing Action Coalition of Rhode Island. “Despite the national trumpeting of a recovery, what we see on the front lines is more and more Rhode Island families struggling to remain in their home or find an adequate, safe and affordable place to live.”
The report comes as affordable housing advocates are working with Rhode Island lawmakers to establish a dedicated stream of funding and ensure that an affordable housing bond is on the ballot in the fall.
“Housing is the cornerstone to our state’s economic growth and investing in affordable housing production will help our state on the path to economic recovery,” said Chris Hannifan, executive director of the Housing Network.
PBN's annual Book of Lists has been an essential resource for the local business community for almost 30 years. The Book of Lists features a wealth of company rankings from a variety of fields and industries, including banking, health care, real estate, law, hospitality, education, not-for-profits, technology and many more.