For many American households, paying rent is a month-to-month challenge and a new report reveals that affordable rent is scarce for many across the country.
A full-time worker needs to earn $18.92 an hour to afford a two-bedroom rental in the U.S., without spending more than 30 percent of income toward rent, according to an annual report by the National Low Incoming Housing Coalition.
In Chicago, you'd need to make between $18.25 and $19.25 an hour to afford a typical two-bedroom rental. (Scroll down to see the breakdown across Illinois.)
“We’ve seen a pretty massive spike in rental prices," Manny Capozzi, director of operations at Chicago Apartment Finders, said, "primarily on the North Side and downtown.”
The National Low Incoming Housing Coalition's study, which is based on the 2012 census and median income statistics, shows that in many states a person must earn even more per hour to pay fair market rent for a two-bedroom unit.
Fair market rent, which is set by the U.S. Department of Housing and Urban Development, is calculated with the idea that no more than 30 percent of one’s income is spent on rent.
Overall prices have gone up 10 to 15 percent in recent years in Chicago, Capozzi said, but in some areas they’ve gone up even more. “It’s definitely harder to live on your own.”
Capozzi said he sees some people pay $1,100 to $1,400 per month for one-bedroom apartments on the North Side that used to cost between $800 and $900 per month.
“Rental rates have steadily risen over the last few years [in Chicago],” said Andrew Porter, chief operating officer of the Chicago apartment-listing website Domu.
Porter says the high price per square foot in new luxury apartments built downtown during a recent construction boom is partially responsible for the overall increase.
Despite the increase, Chicago remains low on the list of rental rates in major U.S. cities.
Hawaii is the most expensive state for renters, according to the National Low Incoming Housing Coalition. To live in a two-bedroom in the state, where fair market rent is $1,640, a person should make $31.54 an hour.
The nation’s capital is the next priciest place. An individual must earn $28.25 to afford a 2-bedroom. But in D.C. a minimum wage worker would have to work 137 hours per week to be able to spend only 30 percent of their income to rent the two-bedroom unit.
Local
The next least affordable states: California ($26.04 per hour), Maryland ($24.94 per hour), New Jersey ($24.94 per hour) and New York ($24.87 per hour).
The report shows that it takes 2.6 full-time minimum wage jobs to afford a typical two-bedroom apartment in the U.S. Rentals are most affordable in Puerto Rico, where a family would need just 1.4 minimum-wage jobs for the typical rental. In Hawaii, it would take 4.4 minimum-wage jobs for a typical 2-bedroom rental.
The report, released in March, comes amid a push to raise the federal minimum wage from $7.25 to $10.10 per hour.
Connecticut, where an average person needs to earn $23.02 to afford a two-bedroom rental unit, made headlines recently by becoming the first state to adopt a law to raise the minimum wage to $10.10.
Still, the NLIHC report found that nowhere in the U.S. can a person making the current federal minimum wage afford a two-bedroom rental unit at fair market rent logging a 40-hour work week without paying more than 30 percent of their income. Before taxes, the annual salary of a minimum-wage worker who puts in 40 hours a week is $15,080.
