Is Housing ‘Out of Reach’ for More Than Half of Workers?
Happy Tuesday, and welcome to another edition of Rent Free. This week’s newsletter includes stories on:
- The passage of single-stair reform in Nashville, Tennessee
- A new legal challenge to Seattle’s affordable housing fees
- How a zoning code dispute in Illinois could produce a rare full-service Popeyes franchise
But first, our lead item takes a look at the National Low Income Housing Coalition’s latest Out of Reach report and its eyebrow-raising claims about the unaffordability of housing in America.
Can Half of Workers Really Not Afford To Rent an Apartment?
The National Low Income Housing Coalition (NLIHC) has released its annual Out of Reach report, which has once again found that a minimum wage earner cannot afford housing almost anywhere in the country.
This year’s report, like every year’s report, has led to a string of local headlines about how there is no affordable housing in this state or that county. The 2025 Out of Reach report will, like its predecessors, be used as a citation in many a housing think piece claiming that it’s impossible for low-wage workers to put a roof over their heads.
As a media product, the Out of Reach report is very successful. The data within it are useful for showing what kind of housing is available where and at what price.
Certainly, housing costs are higher than they would be in a free market. The NLIHC’s report highlights the undeniable reality that lower-income workers bear the brunt of these inflated housing costs.
Still, the dire picture the Out of Reach report paints is largely a product of its overly prescriptive definition of what it means to be able to “afford” housing.
The report therefore misses the many options lower-income people have for economizing on housing costs, even in the context of artificially high rents. It largely treats as illegitimate the tradeoffs people will always have to make when choosing where to live, even if prices were much lower and wages much higher.
The Out of Reach report’s “signature statistic” is the “housing wage.” That’s the hourly wage a single person would need to earn working 40 hours a week in order to spend no more than 30 percent of his income renting a home priced at the U.S. Department of Housing and Urban Development’s (HUD) Fair Market Rent.
Fair Market Rent is defined by HUD as the 40th percentile gross rent for a standard quality unit.
According to this year’s report, the national hourly “housing wage” needed to afford a two-bedroom home is $33.63 and $28.17 for a one-bedroom unit. The report also calculates state- and county-specific housing wages based on local housing costs.
The housing wage is an interesting snapshot of housing costs vs. earnings. The Out of Reach report nevertheless comes to some strange conclusions by using it as the benchmark measure of housing affordability.
The report finds, for instance, that “nowhere in the United States—no state, metropolitan area, or county—can a full-time minimum-wage worker afford a modest two-bedroom rental home.” Only in 7 percent of counties can they afford a one-bed rental.
If renting a midmarket, two-bed unit all by himself while spending no more than 30 percent of his income on rent were a minimum wage earner’s only option, he would in fact be unable to afford housing anywhere. Yet minimum wage earners have options besides that.
They can rent smaller units. They can rent units priced below Fair Market Rents. They can split the cost of housing with a wage-earning partner or roommates. They could also just pay more than 30 percent of their income in rent.
None of these options is necessarily ideal. They’re also not unreasonable things to expect a minimum wage earner to do to put a roof over his head. Yet the Out of Reach report largely treats them as unacceptable.
Living with roommates amounts to “overcrowding.” Renting a lower-priced unit is living in “substandard” housing. Paying more than 30 percent of one’s income on rent means your housing is inherently unaffordable.
The Out of Reach report similarly sa
Article from Reason.com
The Reason Magazine website is a go-to destination for libertarians seeking cogent analysis, investigative reporting, and thought-provoking commentary. Championing the principles of individual freedom, limited government, and free markets, the site offers a diverse range of articles, videos, and podcasts that challenge conventional wisdom and advocate for libertarian solutions. Whether you’re interested in politics, culture, or technology, Reason provides a unique lens that prioritizes liberty and rational discourse. It’s an essential resource for those who value critical thinking and nuanced debate in the pursuit of a freer society.
