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The 10 Most (and Least) Affordable Cities for Rent on a Minimum Wage
By Adam Hardy MONEY RESEARCH COLLECTIVE
Minimum wage employees should expect to work several jobs or have several roommates in order to afford rent.
High rents have forced a bleak ultimatum on minimum wage workers across the country seeking an affordable place to live: Get several roommates or several full-time jobs.
What the research says
Real-estate tech firm Zillow released a rent-affordability analysis this week that looks at the 50 largest cities in the U.S., comparing the local cost of rent for one- and two-bedroom units to the local minimum wage.
- Nationwide, it takes 3.3 full-time minimum wage workers to reasonably afford a one-bedroom unit and 3.8 workers to afford a two-bedroom unit.
- In other words, federal minimum wage workers need to find at least two other roommates to comfortably afford a one-bedroom apartment — or they would have to work 132 hours per week.
- That arrangement for a one-bedroom unit would exceed the Department of Housing and Urban Development’s guideline of a maximum of two people per bedroom.
On the other hand, the picture is less grim in many major cities that Zillow analyzed.
- Despite rent typically being higher than the national average in large cities, many have minimum wages much higher than the federal standard of $7.25.
- For example, in Baltimore — where the minimum wage is $13.25 — it requires 1.6 full-time workers to afford a one-bedroom rental.
- “Workers tend to fare better” in these cities, the Zillow report stated.
Where rent is most (and least) affordable
Here are the 10 most-affordable big cities cities for minimum wage workers renting one-bedroom units, according to Zillow:
- Tucson: 1.3 minimum wage jobs required
- Fresno: 1.4 minimum wage jobs required
- Minneapolis: 1.4 minimum wage jobs required
- Cleveland: 1.5 minimum wage jobs required
- Chicago: 1.5 minimum wage jobs required
- Detroit: 1.5 minimum wage jobs required
- Sacramento: 1.6 minimum wage jobs required
- Albuquerque: 1.6 minimum wage jobs required
- Baltimore: 1.6 minimum wage jobs required
- Kansas City: 1.7 minimum wage jobs required
And here are the 10 least-affordable cities for one-bedroom rentals:
- Atlanta: 4.3 minimum wage jobs required
- Austin: 4 minimum wage jobs required
- Charlotte: 3.8 minimum wage jobs required
- Nashville: 3.7 minimum wage jobs required
- Raleigh: 3.6 minimum wage jobs required
- Dallas: 3.3 minimum wage jobs required
- Fort Worth: 3.1 minimum wage jobs required
- San Antonio: 3.1 minimum wage jobs required
- Houston: 3 minimum wage jobs required
- Philadelphia: 3 minimum wage jobs required
All 10 of the least-affordable places feature the worst of both worlds: minimum wages that have been frozen at $7.25 paired with big-city rental prices.
Keep in mind
Zillow’s affordability analysis is based on the recommendation that rental payments should not exceed 30% of the worker’s monthly income. The 30% rule, as it’s often called, is a popular guideline touted by many academics and personal finance experts.
- The 30% rule can be traced back to legislation from 1969 led by housing-affordability advocate Senator Edward Brooke.
- Some experts argue that the rule no longer makes sense given that increases in housing costs have long outpaced wage gains.
- The rental-affordability crunch persists even though renting is more affordable than owning a home in most of the country right now.
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Adam Hardy is a reporter at Money who strives to help everyday folks make sense of their personal finances. Prior to joining Money, he covered personal finance, entrepreneurship and tech topics at The Penny Hoarder and Forbes. He holds a bacheloru2019s degree in magazine journalism with a minor in sociology from the University of South Florida as well as a multimedia storytelling certificate from Poynter's News University.