PROVIDENCE — A person earning minimum wage in Rhode Island would have to work at least 79 hours each week in order to afford a modest, two-bedroom apartment at fair market rent, according to a new national report.
The Out of Reach report by the National Low Income Housing Coalition also found that Rhode Islanders need to earn a minimum of $24.32 per hour to afford an average two-bedroom apartment at fair market rate in 2022.
The fair market rent for a two-bedroom apartment in Rhode Island is $1,264. To be considered affordable, rent plus utilities should cost no more than 30 percent of a household’s income. Therefore, a household would have to earn $4,215 monthly and $50,579 annually on average, according to the report. Rents are more expensive in certain parts of the state, such as the Newport-Middleton-Portsmouth area, and could require a higher income.
Yet the federal minimum wage has remained at $7.25 an hour since 2009 and the state’s minimum wage is $12.25. This means that a minimum wage earner would have to have more than one full time job or work at least 66 hours per week to even afford a modest one-bedroom apartment with a fair market rate of $1,045.
In 2021, lawmakers in Rhode Island approved legislation that would increase the state minimum wage to $15 per hour, but that won’t take effect until 2024. Housing experts say that while this is a step in the right direction, it won’t be a sufficient to keep pace with the rising costs of housing.
The National Low Income Housing Coalition, or NLIHC, is a research and advocacy organization around affordable housing. This latest report, which was released Thursday morning, comes as the country faces record-high inflation and rising rental costs. In many cases, these rent increases are pricing families, seniors, and individuals out of their homes and neighborhoods.
The median rent price for a two-bedroom apartment has increased nearly 18 percent between the first quarter of 2021 and the first quarter of 2022, according to the report.
“Last Friday, approximately 1,213 Rhode Islanders experienced homelessness. A shocking 314 (including 35 families with children) were estimated to have slept outside or in their cars,” said Caitlin Frumerie, the executive director of the Rhode Island Coalition to End Homelessness.
Frumerie said the report’s findings highlight the legacy of underfunding of affordable housing in Rhode Island.
“The need to substantially invest in affordable housing for low- and no-income Rhode Islanders — especially Rhode Islanders of color has never been greater,” said Frumerie. “Rhode Islanders of color face additional barriers to renting or homeownership, earning lower wages than white workers, and are more likely to be cost-burdened.”
When HousingWorks RI released its 2021 Housing Fact Book in October 2021, it showed that a Rhode Island household earning the state’s median renter housing income of $36,078 could affordably rent in only one Rhode Island municipality — Burrillville.
“In order to afford the two-bedroom Fair Market Rent for Rhode Island, a household must earn $50,579 annually,” said Brenda Clement, the executive director of HousingWorks RI, which is a clearinghouse of information about Rhode Island that’s based at Roger Williams University. “For a number of Rhode Island’s projected growth occupations such as food preparation workers, laborers, nursing assistants, retail workers and others, this is bad news.”
Rhode Island ranked No. 15 in the country for the high hourly wage needed in order to afford a two-bedroom apartment. The situation is worse in Massachusetts, which ranked No. 3 as the most expensive state to find housing. In Massachusetts, minimum wage earners would have to work at least 107 hours each week to afford a two bedroom apartment, or make at least $37.97 an hour for 40 hours. The Boston-Cambridge-Quincy area is the fifth most expensive metropolitan area in the country, only following four cities in California.
West Virginia was the least expensive state to live in. However, the minimum wage there is $8.75, which means that a minimum wage earner would still have to work 70 hours per week to afford an average two bedroom apartment.
Diane Yentel, the CEO and president of the coalition, said the federal government “needs to intervene.”
“Decades of chronic underfunding for housing assistance leaves us with a housing lottery system, where a lucky [percentage] receives affordable housing that they need,” she said on a call with reporters Thursday afternoon. She noted that according to the coalition’s April report, “The Gap,” the United States lacks more than 7 million homes that are both affordable and available to its lowest-income residents.
On Wednesday night, Senate Majority Leader Chuck Schumer and Senator Joe Manchin, a conservative Democrat from West Virginia, announced that they struck a long-awaited deal on a bill that would fight climate change, reform the tax code, and cut health care costs. Yet the reconciliation bill only includes $1 billion for affordable housing instead of the $150 billion that Congresswoman Maxine Waters, Democrat of California, had pushed for.
“This is a very difficult time for families of low-income ability,” Waters told reporters on Thursday.
“I’m more than concerned,” she said on the call during which Yentel also spoke. “I’m upset, I’m angry, I’m more than disappointed. It’s unconscionable for this country, with all the resources we have, to ignore the housing crisis... 580,000 [people in America] are experiencing homelessness on any given night.”
Waters said she knew that the $150 billion she advocated for was also “not enough.”
“I really wanted $300 billion,” she said.
“If housing costs continue to exponentially outpace wages, combined with the continued lack of available housing options and resources such as housing vouchers and short-term housing stabilization funds, we should expect to see Rhode Island continue to rank poorly in future Out of Reach reports,” said Melina Lodge, the executive director of the Housing Network of Rhode Island.
This article has been updated with comments from the National Low Income Housing Coalition and Congresswoman Maxine Waters.