Rent prices are getting so out-of-control across the country that a full-time worker earning the national minimum wage would need three roommates earning the same amount to afford the typical two-bedroom apartment.
Thats according to a new report from Zillow, which looks at rent prices and minimum wage in the 50 largest U.S. cities. Zillow bases affordability on spending an average of 30% of income on rent, which is in line with what most financial experts advise paying for housing each month.
And its not in the usual places that workers are most strapped. Higher minimum wages in big cities like New York and San Francisco actually make them slightly more affordable, according to Zillows calculations, even with higher average rental prices.
Instead, Austin is the city with the tightest affordability for minimum wage workers, according to the report. It takes more than five full-time minimum wage workers to afford the typical two-bedroom rental there, where the minimum wage reflects the federal minimum wage of $7.25.
Cities with a $7.25 minimum wage require an average of over 3.5 full-time workers to afford a typical two-bedroom, per Zillow. Places with higher minimums require an average of 2.5 workers.
This is perhaps the only context in which San Francisco is more affordable than San Antonio, Nicole Bachaud, senior economist at Zillow, said in a statement. Renters have been squeezed by record-fast rent growth while incomes havent kept up. Thats true for those making minimum wage, but especially so where the minimum wage hasnt budged for more than a decade.
There are 10 cities in which two or fewer full-time minimum wage workers can afford a typical two-bedroom rental: Albuquerque, Baltimore, Chicago, Cleveland, Fresno, Mesa, Minneapolis, Phoenix, Sacramento, and Tucson.
All of these cities have minimum wages higher than $10 an hour. These higher minimum wages help workers in these cities to more easily afford rent and stay afloat, the report reads.
The least affordable cities for minimum wage workers are: Austin, Atlanta, Charlotte, Nashville, Dallas, Raleigh, Miami, San Antonio, Fort Worth, and Honolulu. All of these cities except Honolulu have minimum wages of $7.25 an hour.
Thats not to say that a higher minimum wage makes housing affordable on its own. In San Francisco, for example, the minimum wage is $16.99 per hour. Given housing prices there, a worker needs to earn just over $49 per hour to afford a one-bedroom rental comfortably on their own, per Zillows analysis.
Its not just minimum wage workers who are struggling with ever-rising housing costs. More millionaires are renting rather than buying homes, and the share of high-earning rentershouseholds earning $150,000 or more a yearincreased by 82% over the last five years, according to a recent report from apartment search site RentCafe.
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