New report shows how out of reach housing costs are

A report from the National Low-Income Housing Coalition, Out of Reach 2016, shows that workers need to earn almost twice the minimum wage to afford a fair market two-bedroom apartment in Minnesota.

The National Low-Income Housing Coalition calculates the “Housing Wage,” or the amount a household needs to earn to rent a fair market unit while not spending more than 30 percent of their income on housing. Minnesota’s Housing Wage for a two-bedroom unit is $17.76 an hour.

In some parts of Minnesota, the Housing Wage is even higher. In several counties, including Hennepin, Ramsey, Anoka and Chisago, a full-time worker needs to earn $19.75 an hour to afford a fair market two-bedroom apartment.
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The Minnesota Housing Partnership provides a county-level look at how many hours a minimum-wage worker would need to work to afford housing. Even with the upcoming increase to $9.50 an hour for large employers, a minimum-wage worker needs to work 53 to 83 hours a week year round, depending on where they live, to afford a two-bedroom apartment.

When housing takes up such a large share of families’ incomes, they can’t afford other basic needs like transportation or child care, families may have to live in substandard or dangerous housing, or workers can’t afford to live where the jobs are.

Policy choices can play an important role in more Minnesotans affording the housing that meets their needs, both by increasing the supply of affordable housing and ensuring more Minnesotans have good-paying jobs.

In the 2014 Legislative Session, Minnesota policymakers gave minimum-wage workers in the state a long overdue raise. Later this summer, the minimum wage in Minnesota will be $9.50 an hour for large employers, and will be indexed to inflation in future years so that working Minnesotans can better keep up with the cost of housing and other basic needs.

Legislative sessions that fall in even-numbered calendar years, like the one that just ended, are typically bonding years where capital projects like affordable housing are funded. Unfortunately, this session policymakers could not come to an agreement on a bonding bill. They did add funding for affordable housing in the 2016 supplemental budget, including $500,000 for rental assistance for exploited women and children, and $750,000 for a statewide workforce and affordable housing program.

But there’s more that can be done. Policymakers should continue to make progress so that all Minnesotans can afford the basics, including stable housing.

-Clark Biegler

About Clark Biegler

Clark Biegler is the Minnesota Budget Project's policy analyst.
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