Our 2016 State of the Nation’s Housing report and accompanying webcast detailed how the private market is failing to supply housing that is affordable to lower-income households. Indeed, a National Low Income Housing Coalition report found that in 2014, for every 100 very low-income renters (those earning up to 50 percent of area median income) only 57 rental units were affordable and available. The resulting gap in affordable housing supply is due in part to a lack of low-rent units, and is compounded by the fact that many existing low-rent units are occupied by higher-income households.

While statistics on the gap in affordable housing clearly indicate the magnitude of the problem, they mask the extent of the difficulties that certain low-wage workers often face in obtaining a unit they can afford, particularly in major metro areas. For example, according to 2015 HUD estimates, the fair-market rent (including utilities) for a modest one-bedroom apartment was as much as $1,635 in San Francisco, and over $1,200 in New York and Washington, DC. Data from the Bureau of Labor Statistics indicate that in these markets, most full-time cashiers, retail and sales persons, and food preparation workers would have been unable to afford even a modest one-bedroom apartment, under the standard assumption that they should spend no more than 30 percent of their income on housing. The fair market rent of a two-bedroom apartment was even further out of reach for these workers: as high as $2,062 in San Francisco and over $1,400 Washington, DC, Boston, New York, and Los Angeles.

Other occupations where median annual wages were inadequate for households to afford a modest one-bedroom apartment include—but are not limited to—EMTs and paramedics, childcare workers, security guards, and several types of healthcare support occupations (nursing/medical assistants, home health aides), as well as office and administrative support workers. All of these jobs are vital to local economies, and support a variety of businesses and services required for healthy, growing communities.

Annual Wages in Many Occupations Falls Below Income Threshold to Afford a One-Bedroom Apartment (Constant 2015 dollars)

Sources: US Department of Housing and Urban Development (HUD); US Department of Labor, Bureau of Labor Statistics, Occupational Employment Statistics (OES), May 2015 survey.

Notes: Estimates are expressed in 2015 dollars. Median annual wages for all occupations in metropolitan areas and divisions is available from the Occupational Employment Statistics website. Annual wage rates for non-salaried workers are calculated by multiplying the hourly wage rate by a typical work year of 2,080 hours (40 hour work week, 52 weeks per year). Overtime pay and self-employed workers are excluded. HUD’s final fiscal year 2015 fair market rent data is available here. 

Many workers in our transportation and warehousing sector are also impacted. In areas such as San Francisco, New York, and Washington, DC, the median heavy truck/tractor-trailer driver and freight/stock mover each earned insufficient annual income to comfortably afford a modest one-bedroom apartment. And in several high-cost areas, the overall median annual wage among all workers was inadequate to afford a modest apartment at the same 30-percent-of-income threshold.

Wage stagnation among low-income households is certainly part of the problem. Between 2001 and 2014, the median real household income for renters in the bottom quintile fell 9.9 percent, while income for households in the top quintile was up 3.1 percent. To make ends meet, many low-wage households must reduce expenditures on food and healthcare, move to areas which are less accessible and require longer commute times, double up with family or roommates, and/or live in housing with inadequate conditions.

Meanwhile competition for federal housing assistance is intense; waiting lists for housing vouchers managed by local public housing authorities are often years long or even closed. Affordable housing options are especially limited among single parents and low-income families with children. Nearly a third of the nation’s 7 million renters earning less than $35,000 in 2014 had minors living at home, and fully half of these families reported being severely cost-burdened in the same year—paying more than half of their incomes for housing. Very low-income renters living with severe housing cost burdens face the highest rates of housing insecurity, as measured by missed rent payments, having utilities shut off due to nonpayment, and feeling under threat of eviction.

The inability to afford stable, secure, and healthy housing even while working full-time particularly impacts young children in these households. A studypublished in the American Journal of Public Health examined the association between housing insecurity, as indicated by overcrowding in homes and multiple moves, and the health of very young children. Researchers found that young children living in households that moved frequently were significantly more likely to be described by caregivers as being in fair or poor health and at developmental risk. Overcrowding and multiple moves were also associated with increased household and child food insecurity.

Rising housing costs, low wages among many full-time workers, and weak income growth all highlight the importance of investments in affordable, stable, and well-located housing for the millions of families serving our communities through lower-wage occupations, many with only one breadwinner. Indeed, the strength of our cities is tied to all residents having an affordable and stable place to live. Employers also stand to benefit when the workforce can afford to live within reach of employment centers.

Given the high cost of building new housing, preservation of our nation’s existing supply of affordable housing is essential. Effective preservation strategies will include not only government subsidies but also new partnerships between public, private, and nonprofit organizations to focus greater investment on these vital resources, to ensure low-wage workers are able to live in the communities they serve.