The National Low Income Housing Coalition asked the question, "where in America can a low-wage worker afford a two bedroom apartment?"
Their answer:
"Nowhere"
That's "nowhere" assuming the renter is spending no more than 30 percent of their income on housing costs.
Ask any financial advisor and they'll tell you that's the general rule of thumb. It's called the 'housing cost burden.'
And once that burden tips beyond 30 percent, you have a harder time fitting in other essentials like food, clothing, transportation, and savings.
The National Low Income Housing Coalition recently crunched the numbers on the cost of rent - and what it takes to be able to reasonably afford that rent for all the states in the U.S.
If you look at their map, the darker yellow the state, the less affordable it is.
Hawaii was the least affordable. Puerto Rico was the most affordable. Michigan ranked 30th.
In Michigan, they found that it would take a full-time hourly wage of $14.77 to be able to reasonably afford the state's 'fair market rent' of a two-bedroom apartment - which they say is $768 per month. That translates into a monthly wage of $2,559 or $30,713 annually.
Again, by 'reasonably afford' we mean you're not spending more than 30 percent of your income on housing.
Minimum wage in Michigan is $7.40 an hour. If you're renting a two-bedroom apartment on that wage (assuming it's a full-time job), you're spending 66 percent of your income on housing.
More from National Low Income Housing Coalition:
[In Michigan], in order to afford the [fair market rent] for a two-bedroom apartment, a minimum wage earner must work 80 hours per week, 52 weeks per year. Or a household must include 2.0 minimum wage earners working 40 hours per week year-round in order to make the two-bedroom [fair market rent] affordable.
And the National Low Income Housing Coalition reports "the estimated mean (average) wage for a renter is $11.62."
[In Michigan], in order to afford the [fair market rent] for a two-bedroom apartment at this wage, a renter must work 51 hours per week, 52 weeks per year. Or, working 40 hours per week year-round, a household must include 1.3 workers earning the mean renter wage in order to make the two-bedroom [fair market rent] affordable.
So either you're with this guy:
http://www.youtube.com/watch?v=x4o-TeMHys0
Or maybe you think wages are "too damn low."
Or, maybe you think this is simply the free-market at work.
So what's your perspective on this report?
Statistics giving us a clear picture of reality? Or statistics being twisted?
(Or a completely different perspective entirely. The collective 'we' would love to hear those perspectives too, of course.)
