The Rittenhouse Review

A Philadelphia Journal of Politics, Finance, Ethics, and Culture

Saturday, December 25, 2004  

Housing Boom. Renting Bust.

The Associated Press today reports on a disturbing new study by the National Low Income Housing Coalition, “Out of Reach 2004.” The report, issued December 20, is based on data from the Census Bureau and the Department of Housing and Urban Development and took into account state and local variances in the minimum wage, was written by Winton Pitcoff, Danilo Pelletiere, Sheila Crowley, Mark Treskon, and Cushing N. Dolbeare. (Six previous annual “Out of Reach” surveys are published at the NLIHC’s web site.)

According to the A.P. report, “In only four of the nation’s 3,066 counties can someone who works full-time and earns the federal minimum wage afford to pay rent and utilities on a one-bedroom apartment. . . . A two-bedroom rental is even more of a burden -- the typical worker must earn at least $15.37 an hour to pay rent and utilities. . . . That is nearly three times the federal minimum wage of $5.15 an hour.”

The report found the ten least affordable metropolitan areas, based on a calculation of the “housing wage” (the amount a full-time worker must earn to be able to afford the rent for a modest two-bedroom home while paying no more than 30% of income for housing) to be: San Francisco; Stamford/Norwalk, Conn.; Ventura, Calif.; Santa Cruz/Watsonville, Calif.; Oakland, Calif.; Orange County, Calif.; San Jose, Calif.; Boston; Westchester County, N.Y.; and Nassau-Suffolk Counties, N.Y.

The “housing wage” for the San Francisco metropolitan area is $29.60 an hour, or $61,568 in annual gross income.

Nine of the ten least affordable counties are in California, in this order: San Mateo, Marin, San Francisco, Ventura, Santa Cruz, Contra Costa, Alameda, Orange, and Santa Clara. This “top ten” list ends with Nantucket County, Mass., which isn’t even a real place, except for those who serve there.

As for Philadelphia (the city and the county are geographically one and the same), the NLIHC reports:

In Philadelphia County, an extremely low income household (earning $20,640, 30% of the Area Median Income of $68,800) can afford monthly rent of no more than $516, while the Fair Market Rent for a two bedroom unit is $962.

Quick math: $962 / $516 = 1.9 times.

And then there’s this:

In Philadelphia County, a worker earning the Minimum Wage ($5.15 per hour) must work 144 hours per week in order to afford a two-bedroom unit at the area’s Fair Market rent.

FYI, there are 168 hours in a week.

Quick math: 144 hours / 168 hours = 86 percent. That’s the amount of time spent working.

More quick math: 168 hours – 144 hours = 24 hours. That’s for sleeping and getting to and from work.

Still more quick math: 24 hours / 7 hours = 3.4 hours. That’s the allotment for sleeping and commuting each day.

And finally:

The Housing Wage in Philadelphia County is $18.50. This is the amount a full time (40 hours per week) worker must earn per hour in order to afford a two-bedroom unit at the area’s Fair Market rent.

Translated into annual gross compensation, that’s $38,480 a year.

I’m willing to bet the vast majority of Rittenhouse readers, whether in Philadelphia or elsewhere, make more than that, which is all well and good. I also trust that most Rittenhouse readers can understand how difficult it is for many households to reach that comparatively modest figure at any point in their lifetimes, let alone on a sustained basis.

Thus, the question becomes: How can we get lawmakers to appreciate the significance of this dire situation?

[Ed.: My thanks to my anonymous “housing watch” reader for drawing my attention to this report.]

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