Massachusetts is the third most expensive state in the United States to rent a home, requiring a household income of more than $86,000 a year to reasonably afford a modest two-bedroom apartment, according to a new report out Wednesday.
The findings, detailed in the National Low Income Housing Coalition’s annual “Out of Reach” report, put new numbers on a reality that Massachusetts residents have long known: The state is a hub for jobs, education, and innovation. But living here, especially for renters, costs ever more, stretching even moderate earners to the limit.
“It puts numbers to the pain that people are feeling,” said Rachel Heller, CEO of housing advocacy group the Citizens’ Housing and Planning Association. “The rents are so incredibly high — it’s just astounding what a person needs to earn to afford rent here — and all signs point to the fact that we need to do more to address housing affordability.”
Only Hawaii and California are more expensive to rent in, and not by much. Even high-cost states like New York lag behind Massachusetts in that category, according to the report. Greater Boston this year is the sixth most expensive metropolitan area in the United States, only trailing five cities in California.
The “housing wage,” or wage needed for a person to avoid being cost-burdened — spending more than 30 percent of their income on housing costs — in Massachusetts has climbed by nearly $4 just in the last year, as the frozen homebuying market and sinking housing production have put greater strain on the rental market. NLIHC calculated the amount a typical renter needs to earn to afford housing is $41.61 per hour, up from $37.97 in 2022. Nationwide, that figure is $28.58. There is no US state where a person making minimum wage and working a typical 40-hour workweek can afford a modest two-bedroom.
That’s thanks, in large part, to the increase in rental costs over that period. But it also highlights a longstanding dynamic that helps explain the housing crisis: As costs have shot up, wages have not kept pace at all. Today, based on the report’s calculated “housing wages,” the average person earning minimum wage in the United States would have to work 104 hours a week to afford a two-bedroom apartment, or 86 hours a week for a one-bedroom. Nearly 50 percent of the United States cannot afford a modest one-bed while working one full-time job, it found.
And, of course, the costs are not borne equally. Black and Latino workers are more likely than their white counterparts to be employed in sectors with lower median wages, meaning housing is even more inaccessible. Indeed, last year, 20 percent of Black workers and 19 percent of Latino workers earned less than $15 an hour, compared to 15 percent of the entire workforce.
A big part of the solution, Heller said, is to start building more homes, as well as being “more intentional about the kind of homes we build.” The United States is currently short 7.3 million rental homes that are affordable to low-income residents, the report found, and Massachusetts needs to create many more of those affordable units, said Heller.
“We have good pieces with the MBTA Communities law and Housing Choice,” she said. “But we need to do more and do it more quickly. If we don’t, we are putting the Commonwealth’s future at risk.”