Renters must earn at least $22.98 an hour — more than three times the minimum wage — to afford a typical two-bedroom apartment in the Austin area, a recent report reveals.
The report, released this month by the National Low Income Housing Coalition, studied the wages needed to afford rental housing throughout the country and uncovered broad disparities, shedding light on an ever present issue afflicting Austin.
“It validates what we already know, but it’s also showing that the affordability crisis is not limited to Austin,” said Isabelle Headrick, board member of the organization that produced the study and executive director of Accessible Housing Austin, a nonprofit that helps people with disabilities find housing. “It’s in every city in the country.”
The report found that in no state, even those where the minimum wage is above the federal level of $7.25 an hour, can someone earning the minimum wage while working a 40-hour work week afford a two-bedroom rental.
Authors of the report defined affordable as spending 30 percent or less of gross income on rent and utilities. They used the Department of Housing and Urban Development’s “fair market rent” rates to derive housing costs based on housing data from the American Community Survey, the ongoing statistical survey by the U.S. Census Bureau. Data from the Bureau of Labor Statistics was used to measure wages.
The Austin metro area was among the most expensive areas in the state, outpaced only by Midland’s metro fair market area ($29.23 per hour needed) and the Odessa metropolitan area ($25.29 per hour needed).
The study says the fair market rent this year for a two-bedroom apartment in the Austin area is $1,195 a month. The annual income needed to afford that unit is $47,800, assuming 30 percent of the income goes to housing costs.
Another way to look at rental costs in Austin: Someone making the minimum wage would need to work 3.2 jobs to afford a two-bedroom apartment, while someone making the average renter’s wage would need to work 1.2 jobs.
Texas ranked 22nd most expensive among all states, with an income of $18.38 per hour needed to afford a two-bedroom. Nationally, the figure is $21.21 per hour.
Austin and Travis County leaders have been tackling the affordability issue from various angles. Local officials unveiled a comprehensive new regional workforce training plan last month that aims to help people afford housing by providing job training that will eventually boost salaries.
The city also approved a strategic housing blueprint in April that calls for building an additional 135,000 housing units by 2025.
Headrick said the results of the National Low Income Housing Coalition’s study are in line with what she sees day to day at her organization, which constantly receives calls from people living in substandard housing or looking for housing after being displaced due to rental rates jumping higher than they could afford.
She pointed to CodeNext, the Austin’s massive zoning code rewrite, as a possible opportunity for the city to make progress on fixing its housing shortage problem and applauded Austin voters for supporting the city’s 2013 affordable housing bond.
At the same time, she said, the Legislature and federal government have hamstrung affordable housing efforts.
“It would be really great if the state of Texas would get out of our way,” Headrick said. “There’s so many tools out there that we could be using, that we could have been using by now.”
For example, she cited state laws passed that ban the use of construction fees levied for the purpose of raising funds for affordable housing and that allow landlords to discriminate against applicants who plan to pay part of their rent with federal housing vouchers.
Headrick also lamented President Donald Trump’s proposed fiscal 2018 budget, which would cut HUD’s funding by $6.2 billion. If passed, she said, more than 250,000 people could lose their housing vouchers and many other housing programs could be hampered.
The Trump administration has proposed major cuts in domestic spending to pay for a boost in defense spending. A HUD budget document has called for “a greater role for state and local governments and the private sector in addressing community development and affordable housing needs.”