Most Expensive Rental Real Estate in the U.S.
According to "Out of Reach", the annual report of the National
Low Income Housing Coalition (NLIHC), prices of many rental markets have
increased sharply over the past few years making affordable housing difficult
for low and medium wage workers.
The report reveals a marked disparity between people's earning and rental
housing costs. This difference is sizeable and has increased every year. In
fact, the cost of rental housing has gone up by 28% in the past 7 years, much
beyond the wages earned by the people who need affordable housing the most.
NLIHC calculated the hourly wage needed to afford the rent and utilities of a
market rate rental home in each state. Affordable housing was defined as the
cost of a two-bedroom rental home without having to spend more than 30% of one's
gross income on housing costs. The report terms this rate of affordability as
the 'national housing wage', which has increased to $16.31 from last year's
$15.78.
Housing prices in many rental markets far exceed the wages of the renters,
making them the least affordable rental markets. Based on the Out of Reach 2006
report, Hawaii stands at the top of the ten most pricy rental markets for a
two-bedroom rental home. Listed below are top 10 most expensive states for
rental housing:
1. Hawaii - hourly wage of $23.53 needed to afford a two-bedroom rental home.
2. California - hourly wage of $22.86 needed to afford a two-bedroom rental
home.
3. Massachusetts - hourly wage of $22.65 needed to afford a two-bedroom rental
home.
4. New Jersey - hourly wage of $21.21 needed to afford a two-bedroom rental
home.
5. New York - hourly wage of $20.70 needed to afford a two-bedroom rental home.
6. Connecticut - hourly wage of $20.42 needed to afford a two-bedroom rental
home.
7. Maryland - hourly wage of $20.07 needed to afford a two-bedroom rental home.
8. Rhode Island - hourly wage of $19.36 needed to afford a two-bedroom rental
home.
9. New Hampshire - hourly wage of $18.10 needed to afford a two-bedroom rental
home.
10. Alaska - hourly wage of $17.90 needed to afford a two-bedroom rental home.
The report concluded that a minimum-wage earner making $10,712 a year cannot
afford even a one-bedroom home anywhere in the country. The reality is that a
wage earner needs to make $28,475 per year to afford a two-bedroom rental home.
Families with two minimum-wage earners need to make at least $33,925 to afford a
two-bedroom rental home.
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