Too many Minnesotans find affordable housing is “out of reach”

Minnesota’s new minimum wage will increase the incomes of 325,000 Minnesotans, but there’s still more to do for all Minnesota workers to achieve economic security. A recent report finds that minimum wage workers in Minnesota and throughout the country don’t earn enough to afford market rate rental housing.

When there is a wide gap between incomes and housing costs, families can’t afford other basic needs, families may have to live in substandard housing, or workers can’t move to where the jobs are.

Out of Reach 2014: Twenty-Five Years Later, The Affordable Housing Crisis Continues from the National Low-Income Housing Coalition calculates the “Housing Wage” for various parts of the country. The Housing Wage is the income needed to rent a two-bedroom unit while not spending more than 30 percent of a household’s income on housing. Minnesota’s Housing Wage is $16.46 an hour.

That means that a household needs 2.3 jobs at the federal minimum wage of $7.25 to afford a two-bedroom apartment. If Minnesota’s new minimum wage of $9.50 was in effect today, a family with two minimum wage workers could afford an apartment. But housing would still eat up too big a share of the income of a family with one worker at minimum wage. For a county by county look at the report’s results, the Washington Post has put together an infographic.

In some parts of Minnesota, the Housing Wage is even higher. In Minneapolis-St. Paul, a worker needs to earn $18.19 an hour, or 2.5 jobs at the federal minimum wage, to afford a two-bedroom apartment.

There is not a single state in the nation where a full-time minimum wage worker can afford a Fair Market Rent for a one- or two-bedroom rental unit.

The report calls on policymakers to close the growing gap between wages and housing costs by raising the minimum wage and increasing affordable housing opportunities.

In the recent legislative session, Minnesota policymakers did both.

  • The minimum wage increase means more low-wage workers will be able to afford housing.
  • The capital investment bills allocated $100 million for affordable housing, including provisions to preserve public housing in House File 2490 and projects to create more affordable rental housing in House File 1068.

These policy changes will help more workers achieve the financial stability that affordable housing can provide, and helps Minnesota’s growing communities to attract the workforce they need.

-Caitlin Biegler

About Clark Biegler

Clark Biegler is the Minnesota Budget Project's policy analyst.
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2 Responses to Too many Minnesotans find affordable housing is “out of reach”

  1. Pingback: Minnesota Gubernatorial Candidate Says Minimum Wage Workers Should ‘Aspire To A Career’

  2. therain says:

    What about the unemployment that will be caused by a higher minimum wage?
    Raising the minimum wage doesn’t solve anything.
    Who is paying for the $100 million “capital investment”, which is a code word for taxes?
    These don’t solve anything, but create debt and drive businesses away.
    Getting rid of liberal economic policies and getting government to step out of the way are the solutions.
    America is a great country where we can all be successful if we’re not burdened by useless and arbitrary regulations.
    I’m sure a person with “public policy” and “public health” degrees, who worked in “social services” (i,e, always on the public’s dime) is blind to anything but government mandated and subsidized “solutions”.
    If all you have is a hammer, everything looks like a nail.

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