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By PBN Staff
PAWTUCKET – The standard cost of a two-bedroom apartment in Rhode Island is out-of-reach for many of the state’s low income families, according to a new report from the National Low Income Housing Coalition.
The NLIHC report – Out of Reach 2013 – 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.
In Rhode Island, the fair market rent for a two-bedroom apartment is $945, an increase of 2.3 percent from the $924 average in 2012. In order to afford the rent and utilities on an apartment, without paying more than 30 percent of income on housing, a household needs to earn $3,151 a month, or $37,813 a year.
Assuming a 40-hour workweek, the “housing wage” needed to afford a two-bedroom apartment in the Ocean State is $18.18. Currently, the Rhode Island minimum wage worker earns an hourly wage of $7.75.
To afford the FMR for a two-bedroom apartment, a minimum wage earner must work 94 hours per week, 52 weeks per year, or a household must include 2.3 minimum wage employees working 40 hours per week, year-round, to make the apartment affordable.
According to a compilation of the report’s Rhode Island statistics from the Rhode Island Coalition for the Homeless, the estimated average wage for a renter is $12.10. In order to afford the FMR for a two-bedroom apartment at this wage, renters must work 60 hours per week, 52 weeks per year.
Nationally, Rhode Island ranked the 17th most expensive place in the country to rent a home. While Hawaii was the most expensive place in the country to rent, all of the New England states were in the top 25 for unaffordability.
The report showed that “while the rental housing market is booming, incomes have not kept pace with rental costs leaving large numbers of low income renters simply unable to afford the cost of living in the cities and towns where they work,” said the Rhode Island Coalition for the Homeless release.
The Out of Reach report highlights wages and rental prices for every state, metropolitan area and county in the country. “The report highlights that low-income renters continue to face a large array of housing challenges and that prevailing incomes and wages are simply not enough to allow a family to afford a decent home or rental in their community,” said the Rhode Island Coalition release.
According to the report, in no state in the nation can a minimum wage worker afford a two bedroom unit at Fair Market Rents while working a standard 40 hour work week. “Finding a decent, affordable rental is a challenge for all renters, but the poorest households are the most likely to be locked out the market entirely,” said the Coalition release.
“This report verifies what we are seeing day to day here in our state, that more and more Rhode Island families struggle to remain in their home or find an adequate, safe and affordable place to live,” Jim Ryczek, executive director of the Rhode Island Coalition for the Homeless, said in prepared remarks. “The Out of Reach report reminds us why the state programs that support affordable housing and homeless prevention are so critical. Now, more than ever, we need our elected officials to act boldly to prevent more Rhode Island residents from slipping into homelessness.”
The full report is available at nlihc.org.