Business & Tech
Rent Unaffordable for Average Worker in MA
A study shows Massachusetts workers must make $24 an hour to afford rent in the state, more than the $18 average renter's salary.
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While the economy has improved and the unemployment rate has dropped in most states across the country, many people are still struggling to pay the bills, especially when it comes to rental housing, a study shows.
The problem is that while jobs have increased, wages have not, forcing roughly 21 million working Americans to scrape by on a near minimum wage salary, according to the Pew Research Center. At the same time, rents keep rising because the demand for rental units has increased across the country as the home ownership rate has dropped to its lowest point since 1989. The result is that people are being priced out of the rental market, and it’s worse in Massachusetts than most parts of the country, according to The Atlantic’s City Lab.
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Most economists advise renters to pay no more than 30 percent of the annual income on housing. Anything more is unaffordable. Nationally, the average worker needs to make $19.35 an hour to afford the rent on an average two-bedroom home, about $4 an hour more than the average renter’s income of $15.16. In Massachusetts, the gap is wider. A renter needs to make $24.64 an hour. That’s $6.44 an hour more than the average Massachusetts renter makes, the eighth largest wage gap in the country, the study has found. Hawaii tops the lost with a whopping $17.12 wage/rental gap.
It gets worse for people in Massachusetts working for near minimum wage, even though Massachusetts’ $9 minimum wage is higher than the federal $7.25 minimum. Those toward the bottom of the income scale in Massachusetts must work 87 hours a week to afford just a one-bedroom apartment in the commonwealth. A two-bedroom home requires renters at minimum to work about 100 hours a week.
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The problem continues to grow as potential homeowners are increasingly priced out of the market, instead turning to rentals, further limiting the rental stock and driving prices higher.
“The tightening rental market has the most significant impact on low income renters,” the report concludes. “Many higher and middle income renters occupy units that are affordable to lower income groups, reducing the supply of affordable and available decent apartments for the lowest income renters. As a result, for every 100 extremely low income (ELI) renter households, there were just 31 affordable and available units.”
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