PROVIDENCE – A Rhode Islander with a full-time job would need to earn at least $18.90 an hour in order to spend 30 percent or less of his income to rent a standard two-bedroom apartment in the state, according to a report released Wednesday.
For an employee working 40 hours a week for 52 weeks a year, the wage needed to afford a two-bedroom apartment at fair-market value in Rhode Island has increased 67 percent over the last decade, the National Low Income Housing Coalition said.
Rhode Island's Market Has Changed. Developers, Builders, Investors and Sellers Must Change With It.
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That was the second-largest increase in the nation, behind only Hawaii, where the wage jumped 93 percent to $30.96 an hour, the advocacy group said in its report, “Out of Reach 2010.” Experts recommend that individuals spend no more than about 30 percent of their income on housing.
The fair-market rent for a two-bedroom apartment in the state is $983 a month, the study found.
A renter earning the state’s minimum wage – $7.40 an hour – would need to work 102 hours per week for a year to spend 30 percent or less of his income on rent, the organization said. Alternatively, a household would need 2.6 workers earning minimum wage to keep housing’s share at that level.
In Rhode Island, the mean (average) wage of a renter is $11.90 an hour, according to the study. At that wage, a renter would need to work 63 hours per week for the full year to afford housing at 30 percent or less of income.
Nationally, someone earning the mean (average) renter wage of $14.44 would need to work 51 hours a week year round to afford a two-bedroom apartment at fair-market value.
“Year after year, the statistics found in Out of Reach show the effects of the severe shortage of housing that is both decent and affordable to low-income renters,” the report said.
Additional information and the complete report are available at nlihc.org.
Does the report specifically use mean or median? The author here uses the word average.
A study based on means would be worthless. Also, how do you account for geographic distribution?
What does this say about the high unemployment rate in RI if rents continue to rise? The market doesn’t work differently in RI. When the demand for rental units falls, so does the price. Clearly, the demand is higher than the supply. The answer isn’t, as the article would imply, to force landlords to lower rents so that they are no longer ‘Out of Reach.’ The answer is to increase the supply of rental units.