Real Estate

Need a basic 1 BR apartment on minimum wage? You’ll have to work — and work — to afford it

A person earning minimum wage would have to work 94.5 hours per week to make enough money to afford a modest one-bedroom apartment, according to the National Low Income Housing Coalition’s annual report on the shortage of affordable housing for the quarter of U.S. renters classified as low income.
A person earning minimum wage would have to work 94.5 hours per week to make enough money to afford a modest one-bedroom apartment, according to the National Low Income Housing Coalition’s annual report on the shortage of affordable housing for the quarter of U.S. renters classified as low income. Getty Images/iStockphoto

For renters who need it the most, affordable housing is as scarce as ever in Miami.

A person earning minimum wage would have to work 94.5 hours per week to make enough money to afford a modest one-bedroom apartment, according to the National Low Income Housing Coalition’s annual report on the shortage of affordable housing for the quarter of U.S. renters classified as low income.

A national map of the gap shows Florida ranks sixth worst, offering only 26 affordable and available housing units per 100 extremely low-income renter households. The national average is 35. Among U.S. metro areas, Miami ranks among the 10 worst, just after cities in southern California and Phoenix, with only 22 units per 100 in need.

Nevada is the state with the greatest shortage at 15 units, followed by California. Las Vegas ranks as the worst city, with Los Angeles and Orlando close behind. Those cities, along with Miami, have a preponderance of low-paying service jobs. Throughout the country, wages have not kept pace with the increasing cost of living.

Maine, offering 59 affordable and available units per 100 in need, ranked first, with Alabama and West Virginia tied for second, but the discrepancy in supply is still massive. Providence, Boston and Louisville had the least severe shortage of units, but not a single state or major city came close to meeting demand.

About 11 million Americans are considered severely cost-burdened, which means they are forced to spend more than half their income on rent. As a consequence, they must spend less on food, transportation and healthcare and are more prone to the cycle of unpaid bills that can lead to eviction and homelessness. Underlining the level of poverty in Florida, 79 percent of the state’s extremely low-income renter households are severely cost-burdened, second only to Nevada’s 80 percent. Nearly 9.7 million extremely low income, 5 million very low income, 4.1 million low income and 923,726 middle-income renter households in the U.S. are cost-burdened, which means they spend more than 30 percent of their income on rent.

Rental demand has grown since the Great Recession and housing crisis of 2007 and 2008 as homeowners stuck in foreclosure, millennials buried by student debt and Baby Boomers expecting to downsize have sought less expensive rental options.

Across the U.S., there’s a shortage of 7.2 million affordable and available housing units.

“Even with these housing challenges, three out of four low income households in need of housing assistance are denied federal help with their housing due to chronic underfunding,” the NLIHC report states. “Over half a million people were homeless on a single night in 2017 and many more millions of families without assistance face difficult choices between spending their limited incomes on rent or taking care of other necessities like food and medical care. Despite the serious lack of affordable housing, President Trump proposes further reducing federal housing assistance for the lowest income households through budget cuts, increased rents and work requirements.”

Housing insecurity undermines economic stability in multiple ways, the report found, harming struggling families and individuals by causing interruptions in employment, job training, academic achievement and healthcare.

The nation’s affordable housing shortage is “systemic,” according to the NLIHC, and without public subsidies, the private market is largely unable to build affordable rentals or maintain existing units, so new rental development is geared toward the higher end of the market, perpetuating the problem.

The report also warned that if President Donald Trump’s 2019 budget requests are granted, it would lead to “the largest reduction to affordable housing and community development investments in decades.”

“The NLIHC encourages policymakers to support a comprehensive set of tools to solve this problem, including capital investments and rental assistance,” the report states. “Our nation must make the critical investments in affordable housing needed to help the economy, our communities, families, and children thrive.”

Fifteen working-class apartment buildings in South Beach just sold for $59 million. The new landlord plans to renovate the units and raise the rent by as much as 50 percent -- that means many tenants will be forced out.

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