Economists say that you should only spend a third of your income on rent. But for that to be realistic in Philadelphia’s sky-rocketing real estate rental market, you’d have to be making well above minimum wage. In fact, you’d have to earn $23.27 an hour to “comfortably” afford rent on a two-bedroom home in Philadelphia, according to “Out of Reach 2016,” a new report released by theNational Low Incoming Housing Coalition (NLIHC). That’s roughly equivalent to a salary of $44,640 a year — after taxes — and based on a “fair rent” of $1,210 a month for a two-bedroom in Philadelphia.
Realtors advising potential renters on finding homes in Philly tend to use $1,300 a month as a baseline. Pennsylvania ranks 20th in the nation for rental costs, according to the report, with a statewide average of $18.27 an hour required to afford rent. If you were earning a minimum wage of $7.25, you’d have to work 101 hours a week to pay your rent, the report states. “That makes sense,” said Danny, a McDonald’s employee who earns $7.25 an hour. He declined to give his last name. “You have to have faith it will all add up. … Life is a struggle. You have to appreciate where you’re at.” Out of 580,297 households in Philadelphia County, approximately 47 percent are renters, according to the report.
A study by Apartment List found that 57.5 percent of Philly renters pay more than 30 percent of their income for rent. RELATED: Three things you need to know before renting an apartment in Philly “In no state, metropolitan area or county can a full-time worker earning the prevailing minimum wage afford a modest two-bedroom apartment,” the report stated. The most expensive state in the country for renters is Hawaii, with the statewide average income required to “afford” rent being $34.22 an hour. The most expensive city is San Francisco, with $44.02 being the projected hourly income required to afford a two-bedroom apartment. New York state comes in at fourth most expensive, with an income of $30.21 an hour required to afford rent on a two-bedroom in New York City. Massachusetts was seventh, with an income of $30.13 an hour required to afford rent in Boston. By contrast, the cheapest state in the country is Arkansas, with an income of $13.66 an hour being listed as enough to afford a two-bedroom apartment.
The NLIHC “Out of Reach” report argues that legislative steps such as increasing minimum wages and funding for “affordable housing” programs are necessary “to truly end this crisis.”
If you aren’t making $23.27/hour, you can’t afford to live in Philly: Report
Tony Finan
