By Celine-Marie Pascale
The United States is facing an expanding gap between how much workers earn and how much they have to pay for housing.
Workers have faced stagnant wages for the past 40 years. Yet the cost of rent has steadily increased during that time, with sharp increases of 14% to 40% over the past two years.
Now, more than ever, workers are feeling the stress of the affordable housing crisis.
While I was conducting research in economically hard-hit communities from Appalachia to Oakland, California, for my recent book, published in November 2021, nearly every person I met was experiencing the painful reality of being caught between virtually stagnant wages and rising housing costs.
As a sociologist, I had expected that low-wage workers would struggle with the cost of housing. I did not expect to meet people who worked two jobs and lived with roommates and still struggled to pay their bills.
For perspective, a person making US$14 an hour would have to work 89 hours a week to cover the rent on a “modest” one-bedroom rental, estimated to cost $1,615 per month, according to a 2021 study by the National Low-Income Housing Coalition.
Millions of workers earn less than $14 an hour. Among U.S. employees, the average hourly earnings, adjusted for inflation, were only $11.22 in 2022.
In January 2022, median rents in the U.S. reached their highest level yet. The average median cost of one-bedroom units in the 50 largest metro areas rose from $1,386 in 2020 to $1,652 in 2022.
Mindy Schauer/Digital First Media/Orange County Register via Getty Images
‘Now I’m having to scrounge’
I interviewed PL (a pseudonym) for my recent book. He is among the 44 million people in the U.S. who rent their homes.
PL is a longtime Oakland, California, resident, who works full time in a professional career. Despite employment stability, his financial circumstances are worsening.
“Rent is raised dramatically from year to year. I work in a nonprofit organization, so I don’t get a raise every year,” PL told me during an interview in 2018. His monthly rent increased by $250 over the previous three years. Yet his salary remained static.
“That $250 was going toward the grocery bills, the gas bills. Now I’m having to scrounge,” PL said.
PL is not alone.
Households that spend more than 30% of their income on rent are referred to as “cost burdened,” according to the U.S. Department of Housing and Urban Development. In 2019, 37.1 million households, or 30.2% of all U.S. households, fit this category. The situation has worsened since the pandemic.
The financial burden of the increasing cost of rent falls hardest on the half of workers in the U.S. who earn less than $35,000 each year. After paying rent, about 80% of renter households with incomes under $30,000 have between $360 and $490 left to cover all other expenses, including food, health care, transportation and child care.
Where can you live?
Oakland has been described by gentrification experts as the new center of the nationwide affordable housing crisis.
A growing tech industry in San Francisco, a lack of affordable housing, weak rent control laws and a predominance of low-wage service industry jobs contribute to the shortage of affordable housing in Oakland.
Vanessa Torres is one of the more than 15,000 people who live in a low-income neighborhood in Oakland known as “the Deep East.” When I spoke with Torres in 2020, the worry in her voice was clear.
“This is the ‘hood. If low-income Latinos can’t afford it anymore, well where do we go? If we can no longer afford to live in low-income communities that are considered dangerous, that are considered poor, then where do we see ourselves?” Torres said.
In 2019, the midpoint for monthly rent for a one-bedroom apartment in Oakland was $2,300.
Torres would need to earn almost $50 per hour, approximately $96,000 a year, to be able to afford $2,300 a month in rent, according to the nonprofit California Housing Partnership Corp.. Torres earns roughly $50,000 a year as an educator.
Frederic J. Brown/AFP via Getty Images
Still seeking solutions
Elected officials across the country have tried to address the affordable housing crisis through proposals to raise the minimum wage and to mandate more meaningful rent control. They have also proposed greater government investment in affordable housing, and pursued partnerships with developers. As yet, none of these efforts has been successful to any significant extent.
Countries with more government control over the economy have taken a different approach to affordable housing. For example, Nordic countries treat the development of low- and medium-cost housing as a public utility. This reduces and stabilizes housing prices by removing the cost of land, construction, finance and management from the speculative market. They have succeeded in producing quality housing that is subsidized and permanently price restricted.
Known as social housing in Denmark, this strategy has produced 20% of the total available housing there.
Given the affordable housing problems in the U.S., taking stock of other options could provide some inspiration.
For PL, the Oakland renter feeling the squeeze of rising rents, as well as for many other full-time workers, the future doesn’t look any better. PL, who is in his mid-50s, told me he doesn’t see a way to retire. He would need to leave his community in order to retire, but he can’t imagine where he would go. The East Bay is his home.
Celine-Marie Pascale is Professor of Sociology at American University.,
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Mark says
Maybe we need to bring back company owned housing?
Jimbo99 says
They’ll rent a house or 1/2 a duplex & then overutilize that 2/2, 3/2 or whatever the dwelling is supposed to be designed for. Quite often it’s the “boomerang” children. Children that leave the nest and return because all it takes is one of their fragile renting roommates to be short and then everyone gets evicted.
joe stolfi says
This is a very interesting article .
With all the projected “Luxury” apartments being built in Palm Coast, where will the people work
and get paid enough to afford living in those .
I wonder IF the “Luxury” will be suddenly removed when developers realize thee is not high enough
wages in this area to warrant so many top shelf apartments .
Will they suddenly remove amenities and just as suddenly these new units will now become
subsidized or Section 8 units ?
Because – you know – cheap apartments would not “get approved”
MAYBE this is another BEND OVER PALM COASTERS move ???
Time will tell, huh
jOE sTOLFI says
Lets confuse the housing Issue:: Affordable Housing or Attainable Housing ???
There seems to be a shortage of available housing here .
And THE Building Boom continues .
Dennis C Rathsam says
One thing I know for sure….They aint coming to Palm Coast!
Deborah Coffey says
It’s time to stop sending Republicans to Congress. Every time they have power to spend or, not to spend money, tax cuts go to the richest of the rich and this country waits for the “trickle down” that NEVER comes. Then, Republicans whine about deficits and debt when they’ve deprived the Treasury of trillions. Affordable housing is a solvable problem, as is affordable child care and many other expenses for which Corporate America reaps billions in profits…all given freely by Republican legislation. Democrats know how to fix these things for working families. Republicans know how to spend their time propagandizing CRT, abortion, transgender bigotry, stopping immigration, promoting White supremacy and a dozen other cultural “winners” that rile up their base. Vote wisely.
Whathehck? says
Thank you for your comments.
They only want to hear what they want to hear so they only watch one TV channel, listen to specific radio programs, read specific conspiration theories that fit their version of the “truth”.
“Sometimes people don’t want to hear the truth because they don’t want their illusions destroyed.”
Friedrich Nietzsche
Mark says
Don’t forget our GOP dominated State Legislature and local GOP influenced Councils/Boards, it all starts local. Vote like your kids future depended on it, it does.
Morgan Monaco says
Thank’s unvestors grid for rent rising cost.
Before the next year end contract renewal the landford notify of rent increase…if you move the next renter will swallow the next rent anyway.
Mark says
“I did not expect to meet people who worked two jobs and lived with roommates and still struggled to pay their bills.” You must be kidding? Many families also have both parents, when there are both parents, working also. Many struggle to provide a roof over the families heads. This has been going on for many, many years. Making bad decisions has been going on for many years also. Who is to blame, the system or the individual? I am sure all share the “blame”. Question is, how is it fixed? Not an easy problem to fix since there is no magic bullet because every situation is different. Should the taxpayer fix it, should the business fix it or should the individual fix it? Enter the politicians. I personally think the individual should fix it. Do whatever it takes. Make better decisions, teach the kids to make better decisions, get a higher paying job, which could involve getting a better education or learn a higher paying trade, before you bring kids into the world.
Concerned Citizen says
My wife and I are helping a co-worker who got down on her luck last year. She’s been living with us almost 7 months.
She’s a nurse and makes decent money. But after a bad divorce and living in an extended stay for a bit it put her in a cycle of debt. That made it almost impossible to move right away. Most rentals are 1500 a month or higher. And want first last and security. Buying requires decent credit and a down payment. If you’ve been in a cycle of having to pay every week to put a roof over your head it gets expensive fast. And drains savings in a heart beat.
I throw this out there not to brag or gloat. But to put a perspective on some housing situations.
We were fortunate enough to be able to help. Often times someone gets into a bad situation and has no support network. It doesn’t always have to be a run in with the law after bad decision making. Sometimes life just happens opposite of how we plan. And you have to do the best you can to survive.
As long as I’ve been a regular guest on this forum I have often seen disparaging remarks about about affordable housing. Before making a negative comment reflect on your situation. Or that of your friends. Do you know folks who live pay check to paycheck? I do. It only takes the loss of one to find yourself in rough shape and then face homelessness. Or a major life change to break your comfort zone.
I’m not sure what the answer is to make housing affordable to everyone. But I do know that it needs to happen sooner rather than later. And we need to stop stereotyping along with it.