Minimum wage-earners in the D.C. area continue to face an uphill battle for housing, needing to work the equivalent of about three full-time jobs to make rent on a two-bedroom home in D.C., Maryland and Virginia according to a new study released today by the National Low Income Housing Coalition.
- Renters in the District of Columbia need to work 137 hours per week at the minimum wage of $8.25 an hour to afford a Fair Market Rent of $1,469.
- Renters in Maryland need to work 138 hours per week at a minimum wage of $7.25 an hour to afford a Fair Market Rent of $1,297.
- Renters in Virginia need to work 115 hours per week at the minimum wage of $7.25 an hour to afford a Fair Market Rent of $1,088.
If the Fair Market Rent numbers seem lower than what most renters could expect to pay in D.C., it’s because they are. FMR represents the 40th percentile of gross rents for typical units — it is a measure used by the U.S. Department of Housing and Urban Development for housing-voucher programs. The study’s definition of affordability may also be different than that of a typical D.C. resident; it classifies “affordable” as no more than 30 percent of a household’s gross income.
Increases in minimum wage on the way
Lawmakers have been busy addressing both sides of the issue since similar numbers were released in a report last year.
In November 2013, the D.C. Council approved an increase in the minimum wage to $11.50, which will be phased in over three years. Similar bills were passed in neighboring Prince George’s and Montgomery counties, and an effort to raise the statewide wage to $10.10 has stalled in the Maryland state senate.
If you factor in a minimum wage of $11.50, D.C. minimum wage earners would still be looking at a 98-hour week to make rent, and workers in neighboring Maryland would be looking at nearly 87 hours a week.
An effort to raise the minimum wage to $10.10 at the federal level stalled in Congress last year, though President Barack Obama brought up the issue again this year in his State of the Union address. He also issued an executive order dictating that companies with new federal contracts must pay workers at least $10.10.
“While increasing the federal minimum wage would benefit millions of low income workers, it would not solve the affordable housing problem as households would still not earn enough to find affordable rental homes,” say the study’s authors. They further note that even at $10.10 and factoring in a one-bedroom apartment instead of two, only in Arkansas, Kentucky and Puerto Rico would a household be able to subsist at minimum wage.
Affordable housing squeeze
The other side of the problem is that demand for rental housing is booming. In 2012, there were more than 40 million renter households, according to a study by the Joint Center For Housing Studies, with 1.1 million joining the ranks in just one year — double the rate of growth in decades past.
“Renting has become more attractive to people in all demographic groups, appealing across age and income groups,” write the study’s authors. “While some opt for rental housing because of the flexibility it provides, many others are boxed out of homeownership due to tight credit.”
The market has grown tighter for all renters, but the shortage is especially glaring for low income households. Last year, the District closed its waiting list for public housing, which had more than 70,000 families waiting decades for a spot in one of just 8,000 units.
Mayor Vincent Gray has committed to building or preserving 10,000 affordable units by 2020. In his State of the District speech this year, he said 5,000 affordable units have been created already with “thousands more” in the pipeline.