Economists say that you should only spend a third of your income on rent. But for that to be realistic in Philadelphia’s sky-rocketing real estate rental market, you’d have to be making well above minimum wage.
In fact, you’d have to earn $23.27 an hour to “comfortably” afford rent on a two-bedroom home in Philadelphia, according to “Out of Reach 2016,” a new report released by theNational Low Incoming Housing Coalition (NLIHC).
That’s roughly equivalent to a salary of $44,640 a year — after taxes — and based on a “fair rent” of $1,210 a month for a two-bedroom in Philadelphia.
Realtors advising potential renters on finding homes in Philly tend to use $1,300 a month as a baseline.
Pennsylvania ranks 20th in the nation for rental costs, according to the report, with a statewide average of $18.27 an hour required to afford rent. If you were earning a minimum wage of $7.25, you’d have to work 101 hours a week to pay your rent, the report states.
“That makes sense,” said Danny, a McDonald’s employee who earns $7.25 an hour. He declined to give his last name. “You have to have faith it will all add up. … Life is a struggle. You have to appreciate where you’re at.”
Out of 580,297 households in Philadelphia County, approximately 47 percent are renters, according to the report.
A study by Apartment List found that 57.5 percent of Philly renters pay more than 30 percent of their income for rent.
“In no state, metropolitan area or county can a full-time worker earning the prevailing minimum wage afford a modest two-bedroom apartment,” the report stated.
The most expensive state in the country for renters is Hawaii, with the statewide average income required to “afford” rent being $34.22 an hour. The most expensive city is San Francisco, with $44.02 being the projected hourly income required to afford a two-bedroom apartment.
New York state comes in at fourth most expensive, with an income of $30.21 an hour required to afford rent on a two-bedroom in New York City. Massachusetts was seventh, with an income of $30.13 an hour required to afford rent in Boston.
By contrast, the cheapest state in the country is Arkansas, with an income of $13.66 an hour being listed as enough to afford a two-bedroom apartment.
The NLIHC “Out of Reach” report argues that legislative steps such as increasing minimum wages and funding for “affordable housing” programs are necessary “to truly end this crisis.”