Rhode Island’s Rent Is Too Damn High

A new national report entitled Out of Reach put out by the National Low Income Housing Coalition (NLIHC), shows that housing in Rhode Island is unaffordable to anyone who’s not making above-average wages. The study shows that:

• Fair Market Rent (FMR) for a two-bedroom apartment in the state is $924 a month. To afford that rent and utilities and not pay more than 30% of their annual income on housing, a household would have to earn $3,081 a month or $36,974 annually.  If you worked a 40-hour workweek every week for a year, this would mean your wages would have to be $17.78 an hour.
• For minimum wage earners, the prospect is bleaker. To afford the FMR of a two-bedroom, a worker working at $7.40 an hour would have to work 96 hours a week (there are 168 hours in a week) for 52 weeks a year. To maintain a 40-hour workweek, the two-bedroom apartment would have to contain 2.4 workers.
• Luckily, the average worker earns about $11.64 an hour. So assuming a 52 week work year, the average worker only has to work 61 hours to afford a two-bedroom . To maintain a 40-hour workweek, the number of inhabitants would have to be 1.5 workers.

According to the report: “Out of Reach speaks to a fundamental truth: a mismatch exists between the cost of living, the availability of rental assistance and the wages people earn day to day across the country. An affordable home, providing stability and shelter, is a basic human need. Expanding the availability of affordable housing to address the unmet need of so many low income Americans should be a top public policy priority.”

There are three conclusions the report reaches:

1. The Need for Low Income Housing: 1 in 4 renters nationwide are extremely low income; but low income housing stock is decreasing.
2. Wages Can’t Cover Rents: In no state can a minimum wage earner employed full-time afford the FMR on a two-bedroom apartment.
3. Affordability Issues Are A Nationwide Issue: In nearly every state, the average wage earner is also unable to afford a two-bedroom apartment

In terms of our housing wage ($17.78), Rhode Island ranks 17th in the nation, with Massachusetts, Connecticut and New Hampshire all higher. But that isn’t the full picture. In terms of the gap between the costs of a two-bedroom apartment and what an average worker actually makes, Rhode Island ranks 8th in the nation.

“This report verifies what we are seeing day to day here in our state,” stated Brenda Clement, Executive Director for Housing Action Coalition of RI. “Despite the national trumpeting of a recovery, what we see on the frontlines is more and more Rhode Island families struggling to remain in their home or find an adequate, safe and affordable place to live.”

Advocates have been pushing policy-makers for a funding stream for affordable housing through the Neighborhood Opportunities Program, which would increase the amount of affordable housing in the state; lowering expenditures on housing and freeing capital for purchasing. As Chris Hannifan, Executive Director of the Housing Network (the state’s association of CDCs) puts it: “Housing is the cornerstone to our state’s economic growth and investing in affordable housing production will help our state on the path to economic recovery.”