Is Rent in the United State Affordable on a Minimum Wage?

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With rent rising all over the nation, ACL Real Estate and Property Management takes a look at rent affordability, especially for minimum wage earners.

News Image would need to earn at least $18.92 an hour in order to afford a two-bedroom rental apartment.

Leading real estate and property management firm, ACL Real Estate and Property Management believes that the record increases in rents across the United States through 2013 has made housing unaffordable for a large part of the population. The problem with affordability of rental accommodation is, however, not limited to the larger metropolitan areas, the company adds.

According to a report published by the National Low Income Housing Coalition, a low-income housing advocacy group, on March 24, 2014, minimum wagers need to work 2.6 full-time jobs, on an average, for a respectable two-bedroom apartment with rent that is less than 30% of their income. In most cases, a full-time minimum-wager cannot even afford a one-bedroom unit, apart from a few counties in Oregon and Washington.

The report states that one would need to earn at least $18.92 an hour in order to afford a two-bedroom rental apartment. Although the Obama administration has proposed an increase in the federal minimum wage to $10.10 an hour, during the release of the proposed budget earlier in March 2014, the Congress is unlikely to pass a wage hike in the near future. In fact, the Congressional Budget Office released a report in February 2014 that stated that raising minimum wage to $10.10 “would lift 900,000 workers above the poverty line but cost 500,000 jobs.”

Another solution to the rent affordability problem, according to ACL Real Estate and Property Management, is to tackle the shortage of affordable rental homes, especially for extremely low income families. The current shortage stands at about seven million units, says National Low Income Housing Coalition report. However, this would cost money and the National Housing Trust Fund, a federal program initiated by the US Department of Housing and Urban Development to address this problem of shortage, is still unfunded.

“The problem of rent affordability is especially apparent in San Francisco, where rents have seen record gains through 2013,” says a spokesperson from ACL Real Estate and Property Management. Statistics released earlier in 2014 by MPF Research show that rents in San Francisco rose 4.7% in 2013. The city came in second only to Seattle (5.8%) in terms of growth in rental rates in the nation through the year.

About ACL Real Estate and Property Management: As one of the fasted growing full service real estate and property management firms in the East Bay and Peninsula regions, ACL Real Estate and Property Management has a proven track record in quality service and reliability. Apart from offering full-scale real estate brokerage, the company also provides comprehensive property management services to ease the process of selecting tenants, maintaining the home and ensuring timely rent collection for homeowners.

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Charles Lassey
ACL Real Estate
+1 (510) 786-9025
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