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slides: The Real Cost of Renting in Rhode Island

Tuesday, April 02, 2013

 

How much do you need to make an hour to rent an apartment in Rhode Island comfortably? According to a new report from the National Low Income Housing Coalition (NLIHC), the amount is $18.18 an hour.

Yes, an hour.

In the greater Providence area, that number is slightly lower: $17.88 an hour. By contrast, in the Westerly-Hopkinton-New Shoreham area, it's $19.02. On Aquidneck Island, it's the highest, at $21.83.

Housing wage

These figures represent The Housing Wage, calculated by the NLIHC and presented in its 2013 annual report, "Out of Reach." The Housing Wage is the dollar amount someone must earn to afford a modest apartment without spending more than 30 percent of their income on housing.

The Housing Wage captures "the gap between wages and rents across the country," according to the report, and is the estimate of the full-time hourly wage that a household must earn to afford a decent apartment at the HUD-estimated Fair Market Rent (FMR), while spending no more than 30% of income on housing costs. The US average 2013 Housing Wage is $18.79, exceeding the $14.32 hourly wage earned by the average renter by almost $4.50 an hour, and greatly exceeding wages earned by low income renter households.

To put that in perspective, at the current US minimum wage of $7.25 per hour, a single worker earning that wage could afford to spent up to $377 in monthly rent. Another away to look at it: a renter earning the minimum wage would have to work 104 hours a month to afford a 2-bedroom rental unit at the Fair Market Rent of $39,080 per year.

Rhode Island

Rhode Island is the #17 most expensive state when it comes to Housing Wage, according to NLIHC. The most expensive is Hawaii, where a 2-bedroom Fair Market Rent apartment requires earning $32.14 an hour. Hawaii is followed by the District of Columbia ($27.15/hour), California ($25.78/hour), New York ($25.25/hour), New Jersey ($24.84/hour), and Maryland ($20.63). The cheapest state on the list (which includes Puerto Rico and Washington, DC) was Puerto Rico at $10.41 an hour.

In Rhode Island, a minimum wage worker earns an hourly wage of $7.75. In order to afford the FMR for a twobedroom apartment, a minimum wage earner must work 94 hours per week, 52 weeks per year. Or a household must include 2.3 minimum wage earners working 40 hours per week year-round in order to make the two-bedroom FMR affordable.

For the average worker who is also a renter in Rhode Island, the estimated mean wage is $11.73. In order to afford the FMR for a two-bedroom apartment at this wage, a renter must work 62 hours per week, 52 weeks per year. Or, working 40 hours per week year-round, a household must include 1.6 workers earning the mean renter wage in order to make the two-bedroom FMR affordable. 

Counties: Nantucket tops the list

The report also parsed the nation's counties. Nantucket County was the only New England county in the national Top 10 most expensive, and it topped the list at #1 in 2013 with a $36.10 an hour wage necessary to afford a 2-bedroom FMR. Honolulu County was #2, followed by San Mateo, San Franciso, and Marin counties in CA at #3, #4 and #5, respectively.

To see how the rest of New England's states did, see the slides below.

 

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