Lease costs are getting so out-of-control throughout the nation {that a} full-time employee incomes the nationwide minimal wage would want three roommates incomes the identical quantity to afford the everyday two-bedroom house.
That’s according to a new report from Zillow, which appears at hire costs and minimal wage within the 50 largest U.S. cities. Zillow bases affordability on spending a mean of 30% of revenue on hire, which is in step with what most monetary consultants advise paying for housing each month.
And it’s not within the typical locations that employees are most strapped. Greater minimal wages in huge cities like New York and San Francisco really make them barely extra reasonably priced, in response to Zillow’s calculations, even with greater common rental costs.
As an alternative, Austin is the town with the “tightest” affordability for minimal wage employees, in response to the report. It takes greater than 5 full-time minimal wage employees to afford the everyday two-bedroom rental there, the place the minimal wage displays the federal minimal wage of $7.25.
Cities with a $7.25 minimal wage require a mean of over 3.5 full-time employees to afford a typical two-bedroom, per Zillow. Locations with greater minimums require a mean of two.5 employees.
“That is maybe the one context through which San Francisco is extra reasonably priced than San Antonio,” Nicole Bachaud, senior economist at Zillow, stated in a press release. “Renters have been squeezed by record-fast hire progress whereas incomes haven’t saved up. That’s true for these making minimal wage, however particularly so the place the minimal wage hasn’t budged for greater than a decade.”
There are 10 cities through which two or fewer full-time minimal wage employees can afford a typical two-bedroom rental: Albuquerque, Baltimore, Chicago, Cleveland, Fresno, Mesa, Minneapolis, Phoenix, Sacramento, and Tucson.
All of those cities have minimal wages greater than $10 an hour. “These greater minimal wages assist employees in these cities to extra simply afford hire and keep afloat,” the report reads.
The least reasonably priced cities for minimal wage employees are: Austin, Atlanta, Charlotte, Nashville, Dallas, Raleigh, Miami, San Antonio, Fort Value, and Honolulu. All of those cities besides Honolulu have minimal wages of $7.25 an hour.
That’s to not say {that a} greater minimal wage makes housing reasonably priced by itself. In San Francisco, for instance, the minimal wage is $16.99 per hour. Given housing costs there, a employee must earn simply over $49 per hour to afford a one-bedroom rental comfortably on their very own, per Zillow’s evaluation.
It’s not simply minimal wage employees who’re scuffling with ever-rising housing prices. Extra millionaires are renting fairly than shopping for houses, and the share of high-earning renters—households incomes $150,000 or extra a yr—elevated by 82% during the last 5 years, according to a recent report from house search web site RentCafe.
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