Affordability continues to remain an issue, not just for potential home buyers, but also for renters who saw rental prices skyrocket last year. The U.S. Census Bureau found that 19 million renters spent more than 30% of their income on housing in 2021, putting them in the category of “rent burdened” according to the Department of Housing and Urban Development (HUD). The National Low Income Housing Coalition (NLIHC) released its Out of Reach report on how much renters need to make in order to afford a modest apartment in their state, and ranked Virginia as 17th in highest housing wage. Let’s take a closer look at these state level numbers.
According to the NLIHC, the national housing wage, the estimate of how much full-time workers need to make to afford rent was $23.67/hr for a one bedroom and $28.58/hr for a two bedroom. In the state of Virginia, the average renter wage is $23.38 an hour, meaning a household could afford a monthly rent of $1,216 which is enough for a one-bedroom apartment. For those making the minimum wage at $12.00/hr., they are able to afford rent at $624 a month, meaning that they would need to work an estimated 77 hours a week and almost two full-time jobs in order to afford a one bedroom in the state. The working hours at minimum wage grows to 89 hours a week or the equivalent of 2.2 full time jobs to afford a two-bedroom rental at Fair Market Rent (FMR).
Northern Virginia has the highest housing wage across all metropolitan areas in Virginia with a FMR two-bedroom apartment costing $1,838 per month. Someone making the estimated mean renter wage of $30.57/hr. would be able to afford a monthly rent of $1,590, below the amount necessary to afford a two-bedroom. Those working minimum wage would need to work 2.9 full time jobs in order to afford an apartment in this area.
Many of Virginia’s most common occupations earned median housing wages that were below that needed to afford apartments at FMR. Fast food workers and retail salespersons made up two of the biggest occupational groups in Virginia, but both made less than the average rental wage with fast food employees making a median hourly wage of $13.16 and retail salespersons making $14.66. Software developers, general and operation managers, and management analysts were among the highest median wage workers that were able to afford zero to four bedroom apartments according to the report.
Although rental growth has recently begun to slow down, housing affordability is still a challenge for renters, especially for those with lower incomes. Many of these renters want to become homeowners one day, but if the cost of renting becomes less affordable then that dream of owning a home begins to feel out of reach.