Twenty-five years after Out of Reach was first published, the housing crisis continues…

A week ago, NLIHC released its annual report, Out of Reach. Out of Reach 2014 provides extensive data on housing costs and wages for every state, county, and metropolitan area in the United States. Over the years, NLIHC has expanded and improved the Out of Reach report; however, the methodology remains the same. Here’s a review of some key definitions and figures used by Out of Reach:

What it means: The federally accepted standard of “affordable” housing is that which requires no more than 30% of the household income be spent on rent and utilities. Out of Reach uses this standard of affordability to determine the wages renters must earn to afford their local rent.

How to explain it:
Many Americans spend more than 30% of their income on housing costs. For some, this may be considered a short-term situation. However, for millions of low income Americans, spending more than 30% of their income on housing costs means serious housing instability as these households often live paycheck to paycheck.

When a household has to spend more than 30% of their income on rent and utilities, they are considered cost burdened. When a household has to spend more than 50% of their income on rent and utilities, they are considered severely cost burdened. Three out of every four extremely low income families are severely cost burdened, forcing them to make tough decisions on how to spend the little leftover income they have on food, transportation, medical costs, child care, and other important expenses.

What it means: Simply put, Fair Market Rents (FMRs) are a standard measure of current housing costs across the country, using a consistent methodology. HUD estimates FMRs annually. They represent HUD’s best estimate of what a household seeking a modest rental unit in a short amount of time can expect to pay for rent and utilities in the current market. When calculating what incomes renters need to earn to afford rent, Out of Reach uses the Fair Market Rents.

What it means: How much must an individual earn hourly in order to afford a rental unit at FMR. The standard Housing Wage refers to a two-bedroom rental unit; however, Out of Reach also provides the Housing Wage for efficiencies up to 4-bedroom units in the state excel files. This figure is an average, available at the national level, state level, county level, and metropolitan area level.

How to use it: The 2014 two-bedroom national Housing Wage is $18.92. This figure varies considerably at state and local levels, so it is most effective to look up your county, metropolitan area, or state Housing Wage. You can compare this piece of data with what the average renter in that area actually earns, and what minimum wage workers earn.

While the Housing Wage can help your elected official understand the disparity between what renters in your community need to earn to afford rent and what they actually make, it is important to note that raising wages is an insufficient response to the problem. In every state, the Housing Wage is higher than the proposed raised federal minimum wage of $10.10. This disparity points to the extreme shortage of rental housing that is both affordable and available to low income renters. The strongest solution to the affordable housing crisis is an increased federal investment in affordable housing, which can be best achieved through the National Housing Trust Fund.

What it means: How much does the average renter earn on an hourly basis. This wage is a mean calculation.

How to use it: Compare your state or local renter wage with your Housing Wage to demonstrate that the average renter cannot afford rent. It is important to note that because the renter wage is an average, many families face an even greater wage disparity.

ImageWhat it means: This one is pretty self-explanatory, which is why it has become one of the most popular data points from Out of Reach. This analysis is most widely recognized in its map form, which provides how many hours a minimum wage worker must work every week to afford a two-bedroom rental unit at Fair Market Rent. The calculations use the prevailing minimum wage (whichever is higher between the federal or state minimum wage).

How to use it: This Out of Reach analysis has been used by many to argue for increasing the federal minimum wage. In every state, this figure is greater than 40 hours per week, even when using the prevailing state minimum wage. This reveals that nowhere in America, can a full-time minimum wage worker afford a two-bedroom rental unit.

Learn more, and read the full Out of Reach 2014 report, at Use the “View State Data” dropdown to access your state’s Out of Reach page. Click on the attached State Report (PDF) and State Data (Excel) to view and compare these and other data.

Barbara Stallone, Director of Policy and Public Relations for the Utah Housing Coalition, guest blog posts on how our state partner used Out of Reach data to advocate for an increased state minimum wage.

News Round-Up: It Takes a Village

It takes a village to raise a family, and it may take assistance from multiple levels of government to ensure affordable housing is available to those who need it. As NLIHC research has shown over the years, some local communities have in place programs and resources to help make up for where the federal government has fallen short in meeting the affordable rental housing needs of the lowest income people. News from two communities shows what that investment can look like- and why it’s so important.

In Connecticut, a state with one of the highest Housing Wages in the nation, advocates and government officials have high hopes a new state Department of Housing will be able to reverse that state’s trend of housing costs that swiftly outpace what low income residents can afford.

San Francisco has by some measures the highest rental housing costs in the nation. While recent reports of a leveling-off of rents in that city may be a positive sign, it isn’t as if rent there became affordable. The creation of a new city housing trust fund last year should help increase the availability of affordable housing, but it may take more than just local resources to meet San Francisco’s tremendous housing need.

News Round-Up: A Housing Rebound, for Some

The U.S. housing market has been crawling back from the brink for some time now, and there are very clear signs that a housing rebound is afoot. There is even some new construction happening in multifamily housing.

But is any of this new building going to help the lowest income renters? In Madison, Wisc., new construction hasn’t meant housing affordable for low income people. While experts agree the demand is there, low vacancy rates have pushed unaffordable rents even higher.

In Minot, North Dakota, the oil boom has propelled the economy- and rents- to never-before-imagined heights. Apartments that once rented for $350 a month could now rent for as much as $1600. Even with the lowest paying jobs increasing their wages in order to attract employees, housing is still out of reach.

News Round-Up: Sacred Cows

In housing news this week, we found encouraging signs that the conventional wisdom about housing policy might be changing, and continued concern that not enough is being done to end poverty and suffering in our nation.

CQ covers a new wrinkle in the tax debate raging in Washington: Willingness to let go of sacred cows. Both an NLIHC poll and a Pew poll indicate public support for modifying the mortgage interest deduction, and even the home builders are said to be open to a mortgage interest credit that would be helpful for first-time home buyers. NLIHC proposes converting the mortgage interest deduction into a 15% to 20% credit and capping it at interest on mortgages up to $500,000, and using the savings to fund the building and rehabilitation of affordable rental housing.

The Nation celebrated an anti-poverty Thanksgiving last week with reflections on the holiday from advocacy leaders and low income people. In her reflection, NLIHC President & CEO Sheila Crowley said, ” I will know that change has come when people are not sleeping outside on concrete in November two blocks from the White House.”

Finally, a column in Yes! Weekly explores the social cost of an economic and political system that requires minimum-wage workers to work 75 hours or more per week to be able to afford decent housing and other household expenses. The author suggests that other social ills could be the result if Americans cease to believe in the promise of the American dream.

News Round-Up: Up for Debate

Calculations from the National Low Income Housing Coalition have made their way into a number of recent news reports and opinion pieces. The Echo Press of Alexandria, MN reports on the new county profiles from the Minnesota Housing Partnership. These profiles include data developed by NLIHC and show that “In every county in Minnesota, some families face paying more than half of their income for their housing.”

Florida Legal Services staff attorney and retired NLIHC board member Charles Elsesser notes, in a letter to the Miami Herald, that with that city’s Housing Wage at almost $22 an hour, the need for affordable rental housing is clear and it’s time to talk seriously about solutions.

An opinion piece in the New Jersey Jewish News uses figures from Out of Reach to show how difficult it is for seniors living on fixed incomes in New Jersey to afford market-rate rental housing. The author notes that mission-driven nonprofits devoted to developing housing for seniors can’t do their work if the federal government does not provide adequate funding for housing for extremely low income people.

We return to Minnesota for a look at a report NLIHC released this spring, Affordable Housing Dilemma: The Preservation vs. Mobility Debate. This brief article in The Twin Cities Daily Planet notes that neither investing in community redevelopment, nor making it possible for low income people to move to higher opportunity neighborhoods, will be the solution to America’s affordable housing challenges in all cases.

Affordable Housing Dilemma made its way into a report in the Nashua Telegraph on the the Nashua Housing Authority’s plan to demolish a public housing development many say is worth saving because it is well-maintained and affordable. The housing authority counters that demolishing the dense development would allow the residents to move to less-crowded areas where they would no longer be “defined and isolated by their income level.” The article suggests the debate in Nashua is a perfect example of the discussion in NLIHC’s report, and notes that “spatial dispersion” is not a cure-all for poverty.

Have you seen any great uses of housing data in the news this week? Share them with us in the comments!