Study shows rental costs outpace average wage of renters

VVN/Bill Cook

VVN/Bill Cook

PHOENIX -- It may be no surprise to Arizona renters.

But a new report shows that an affordable apartment -- one within their means -- requires more than what they typically earn in a 40-hour week.

New data from the National Low Income Housing Coalition shows it takes 1.1 full-time jobs at the state’s estimated hourly mean renter wages to be able to afford a two-bedroom unity.

Now, by “afford,’’ the coalition presumes that means giving no more than 30 percent of income to the landlord.

Statewide, rents are running $913 a month on average. But with the nearly 900,000 renters making just $16.02 an hour, an “affordable’’ rent would be just $833 a month.

Put another way, the typical Arizona renter would need to be earning $17.56 an hour to keep housing costs below 30 percent of gross income.

The data, however, shows that Arizonans in many communities are spending more than that 30 percent figure.

Most notably, the coalition figures average rent in Coconino County, dominated by Flagstaff, at $1,037 a month.

It turns out, however, that the more than 18,700 renter households in the area have an estimated hourly wage of $12.43. That puts their “affordability’’ at $646 a month.

Put another way, the only way someone could rent there -- and keep it within that standard of 30 percent of income -- is to 1.6 jobs at the median wage, presumably meaning someone else contributing to the bill.

So where’s the most affordable place for renters?

Greenlee County.

Part of it is that rents there are relative cheap by Arizona standards: $681 a month versus $913 statewide and $731 for non-metropolitan areas.

But the real difference is the area income. The coalition figures the 1,726 renters in the area have a mean income of $41.53, courtesy of the mining jobs there.

Put another way, residents could actually pay up to $2,160 a month for a two-bedroom apartment before hitting that 30 percent touchstone for what is considered affordable. What that also means is that the renters there have lots of disposable income for other things.

Apache County, which also has an average rent of $681 a month, also is an affordable place to live, with incomes there just north of $20 an hour.

By comparison, the more than 42 million of renters nationally have mean wages of $16.38 a month.

That puts affordable housing at $852 monthly. But average rents run $1,103 a month, meaning it takes the wages of 1.3 full-time workers to keep rents within that 30 percent affordability figure.

The worst place for renters?

Statewide, that would be in Hawaii where the coalition figures that rents run $1,830 a month. That means to keep rents affordable, someone would need to be earning $35.20 an hour; the actual typical salary for a renter is just $15.64.

For metro areas, the biggest gap is in and around San Francisco where the average renter makes $35.40 an hour but it would take hourly income of $58.04 to keep the cost below that 30 percent threshold.

Part of the problem, according to the coalition, is that income has not kept pace with rental costs.

The report says that between 2007 and 2015, the mean gross rent increased by 6 percent after adjusting for inflation; the mean income for renter households rose by just 1 percent.

And that demand, the report says, is likely to continue.

One bit of good news nationally has been an increase in new construction. But the report says that helps only if the new units are available at affordable rates.

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