Where Is the Affordable Housing?

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The recession may be over according to some economists, but it's still in full swing for low-income renters. A typical family needs to earn $18.44 an hour, or nearly $38,360 a year, in order to afford a modest rental home; that's according to a survey by the National Low Income Housing Coalition, a Washington D.C.-based think tank dedicated to increasing home affordability for low-earning Americans,

What if the family is a two-parent household in which both parents hold minimum-wage jobs? They probably won't be able to put a roof over their children's heads unless they happen to live in an exceptionally cheap area.

Unfortunately, even the cheap areas seem to be getting more expensive. While rent fluctuates tremendously depending on where you live, the study reports that 10 states require individuals, on average, to earn more than $20 an hour just to afford a two-bedroom rental.Currently Stamford-Norwalk, Conn. tops the charts as the nation's most expensive metro area. To afford a two-bedroom apartment, individuals must earn an average of $34.11 per hour just to be able to cover the rent.

"The persistence of high rates of unemployment and under-employment is making it ever more difficult for families to secure decent housing," the Center for Economic Policy and Research co-director stated in a press release. "Unfortunately, the situation is not likely to improve any time soon."

That is, unless you move to Puerto Rico, North Dakota or West Virginia, the three cheapest rental states in the nation, where the average housing-wage is below $12 an hour. (To determine your own personal housing wage, check out the calculator here).

Unsurprisingly, the problem is worse in the most densely populated areas. According to a second National Low Income Housing Coalition study, 74 percent of metro renters live in an area where having two full-time jobs at the minimum wage would still not allow them to afford a standard two-bedroom apartment in their area.

Both studies assume one crucial thing that can't possibly be true in the poorest of households -- that tenants are limiting their rent to 30 percent of their household income. A 2006 survey by the U.S. Census Bureau shows that nearly half of all renters exceed that mark, thus significantly lowering their ability to build up emergency funds and remain financially stable.

While the Dow Jones may be steadily climbing, it's going to take more funds directed to affordable housing programs, better jobs and potentially a raise to the minimum wage to help low-income families brave the rental slump before even thinking about stimulating the housing market.
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