The National Low Income Housing Coalition released Out of Reach 2014, an annual report that examines the true housing wage needed to afford a modest rental home in communities across the country. The signature finding from this year’s report is the 2014 two-bedroom housing wage of $18.92/hour; this national average is more than two-and-a-half times the federal minimum wage, and 52% higher than it was in 2010. The 2014 two-bedroom housing wage in South Carolina is $14.55. (Housing wage is the hourly wage a full-time worker must earn to afford a rental home at the HUD-estimated Fair Market Rent while spending no more than 30% of their income on housing costs.)
What does this mean for our state? Renter households represent nearly 1/3 of all households in South Carolina and the average wage for a renter is $11.00/hour. In order to afford a two-bedroom apartment at this wage, a renter must work 1.3 full time jobs.
The report serves as documentation for what we already know, that a large number of renters cannot find safe, affordable housing. It is supported by CFED’s Assets and Opportunity Scorecard that reports 52.6% of renters in South Carolina are cost-burdened, paying more than 30% of their monthly income on housing needs.
There are two solutions to the issue. The first is to increase the federal minimum wage. There has been a tremendous amount of discussion on this issue over the past several months. The Fair Minimum Wage Act of 2013 would raise the federal minimum wage to $10.10/hour in three increments over the next three-and-a-half years. The Harkin-Miller proposal would also index the minimum wage to inflation to preserve its real value. In his 2014 State of the Union address, President Barack Obama announced that he would use his executive authority to raise the minimum wage for new federal service contracts to $10.10/hour.
While increasing the federal minimum wage would help many low-income workers, the recommended increase would fall short of the necessary hourly rate needed to afford rental housing in South Carolina. Therefore, in addition to increasing wages, we need to increase the stock of affordable rental housing. Programs such as the Low Income Housing Tax Credit Program are making great strides in this area, combining local, state, and federal funds to support the development of affordable rental housing affordable to very low and low-income families.
Out of Reach underscores the growing challenges faced by low-income renters and the data found within provides direction for those working to ensure safe, affordable housing for all. Upon reviewing the report, CLF reconfirms its commitment to advocating for and financing the production of affordable rental housing to meet the needs of the state’s lowest income households.
