Rents are becoming so out of control nationally that a person working full-time on the national minimum wage would need three roommates earning the same amount to afford a two-room apartment. typical sleep.
that is according to a new report from zillow, which looks at rents and minimum wages in the 50 largest US cities. Zillow is based on affordability as spending an average of 30% of income on rent, which is suitable for most financial professionals monthly house payment advice.
And it’s not in the usual places that workers are most tied up. According to Zillow’s calculations, higher minimum wages in big cities like New York and San Francisco actually make them slightly more affordable, even if the average rent is higher.
Instead, Austin is the city with the “tightest” pay for minimum wage workers, according to the report. It takes more than five minimum wage full-time workers to afford the rent of a typical two-bedroom apartment there, where the minimum wage reflects the federal minimum wage of $7.25.
Cities with a $7.25 minimum wage require, on average, more than 3.5 full-time workers to purchase a typical two-bedroom apartment, according to Zillow. Places with higher minimums require an average of 2.5 workers.
“This is perhaps the only context where San Francisco is more affordable than San Antonio,” Nicole Bachaud, senior economist at Zillow, said in a statement. “Tenants have been squeezed by record-high rents while incomes haven’t kept up. That’s true for those earning the minimum wage, but especially when the minimum wage hasn’t risen in more than a decade.”
There are 10 cities where two or fewer full-time minimum wage workers can afford to rent a typical two-bedroom apartment: Albuquerque, Baltimore, Chicago, Cleveland, Fresno, Mesa, Minneapolis, Phoenix, Sacramento and Tucson.
All of these cities have higher minimum wages than $10 an hour. “This higher minimum wage makes it easier for workers in these cities to pay rent and sustain themselves,” the report said.
The most affordable cities for minimum wage workers are: Austin, Atlanta, Charlotte, Nashville, Dallas, Raleigh, Miami, San Antonio, Fort Worth, and Honolulu. All of these cities except Honolulu have a minimum wage of $7.25 an hour.
That’s not to say that a higher minimum wage makes housing more affordable. For example, in San Francisco, the minimum wage is $16.99 an hour. With housing prices there, a worker needs to earn just over $49 an hour to comfortably afford a one-bedroom rental, according to Zillow’s analysis.
It’s not just minimum wage workers who are struggling with rising housing costs. More millionaires are renting than buying, and the percentage of high-income renters—households earning $150,000 or more a year—increased 82% over the past 5 years, According to a recent report from the apartment search website RentCafe.
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