While the COVID-19 pandemic resulted in financial instability and economic hardship for many households, unprecedented supports – including a national emergency rental assistance program and eviction moratorium – were enacted to reduce suffering among the country’s lowest-income renters. As these temporary supports come to an end, renters are facing a troubling landscape, with rising rental prices and record-breaking inflation putting decent and affordable homes even further out of reach.
The National Low Income Housing Coalition’s (NLIHC) recently published report Out of Reach 2022 highlights the severity of this problem: in no state, metropolitan area, or county can a full-time minimum-wage worker afford a modest two-bedroom rental home at fair market rent. In 91% of counties in the U.S., a full-time minimum-wage worker cannot afford a one-bedroom rental home at fair market rent. In 2022, renters need to earn an hourly wage of $25.82 to afford a modest two-bedroom rental home and $21.25 for a modest one-bedroom rental home. Both wages are far higher than the federal hourly minimum wage of $7.25.
Housing assistance remains woefully inadequate and has not kept pace with the growing need: only one out of every four renters who need housing assistance receives it. Currently, there is a national shortage of nearly 7 million affordable and available homes for renters with extremely low incomes. For every 100 renters with extremely low incomes, there are only 36 affordable and available homes. Approximately 71% of extremely low-income renters are severely housing cost-burdened, spending more than half of their incomes on housing.
Record-high inflation, rising rental prices, and unprecedented rental demand have made it even more difficult in recent months for low-income renters to find affordable, quality housing.
The high cost of housing is a racial justice issue as well. Due to historical and ongoing racial discrimination, Black and Latino households are more likely than white households to be renters and are disproportionately housing cost-burdened and extremely low-income. While Black and Latino workers are more likely to be employed in sectors with lower wages than white workers, they also earn less than white workers with the same occupations.
These disparities are only exacerbated for women of color, who face even higher pay disparities, making it even more difficult to afford housing. Low-wage Black and Latino workers will continue to struggle to afford their housing until long-term investments are made in affordable housing. Housing affordability for low-wage workers and other extremely low-income renters is a national challenge.
In Missouri, the minimum wage is $11.15 with upwards of 30% of Missourians renting their home opposed to owning it. In order to afford their rent our friends and neighbors need to work 1.5 full-time jobs at minimum wage to be able to afford a 2-bedroom home. Finding and maintaining a rental is only half the battle. Once someone has their rental they are often one emergency room visit or job loss away from losing it. It is not possible to rent a home, save for an emergency AND afford necessities like food, medicine and electricity. What ends up happening is our friends and neighbors having to choose which necessity they can pay in a given month.
Nationwide, eleven million extremely low-income renter households – many of which include seniors, people with disabilities, and families with small children – are in this situation, struggling to choose between paying for housing or for other necessities like food, transportation, medical care, and childcare. These decisions have become even more difficult over the last year, as inflation has reached a 40-year high. While recent rental prices have skyrocketed, costs for basic necessities have simultaneously risen, making spending choices for low-income renters even harder.
The good news is that there are solutions to these problems. Out of Reach explains why federal policy is needed to address this challenge. The report proposes an expansion of rental assistance provided by the Housing Choice Voucher program, a significant increase in resources for the national Housing Trust Fund, adequate federal funds to repair public housing, a national emergency rent stabilization fund, and strengthened renter protections.
As highlighted in the report, the inability to afford housing can have far-reaching impacts on renters’ mental health and well-being. Research shows that when people live in affordable, safe, decent, and accessible homes, they are better able to find and maintain employment, achieve economic mobility, and stay healthy. As the country faces climbing prices for rent and basic necessities, we must support bold and sustained commitments to ensure that the lowest-income renters are able to afford decent, accessible housing.