To afford a two-bedroom apartment in Arizona, a full-time worker needs to earn more than $21 an hour — that’s $9 over the state minimum wage and $13.75 above the federal.
This according to a joint report announced Tuesday by the Washington, D.C.-based National Low Income Housing Coalition in partnership with the Arizona Housing Coalition.
In a press release Tuesday, the groups said housing affordability is a real problem both locally and nationally.
“In no state, even those where the minimum wage has been set above the federal standard, can a minimum wage renter working a 40-hour work week afford a modest two-bedroom rental unit at the average fair market rent,” the release states.
Their analysis considers data on incomes and housing costs in communities across the country to reveal for each what they call a housing wage — the minimum income needed to afford an apartment without exceeding the U.S. Census Bureau’s threshold for burdened households, which is 30% of gross income.
The report, entitled “Out of Reach: The High Cost of Housing,” explicates a national housing crisis and ranks Arizona the 20th highest for estimated housing wage.
“In Arizona, the fair market rent for a two-bedroom apartment is $1,097. In order to afford this level of rent and utilities — without paying more than 30% of income on housing — a household must earn $3,658 monthly or $43,892 annually. Assuming a 40-hour work week, 52 weeks per year, this level of income translates into an hourly housing wage of: $21.10,” the report states.
Based on U.S. Census Bureau data, there are more than 918,000 renter households in Arizona with 36% or an estimated 2.6 million of the state’s residents living in rental housing.
To afford a two-bedroom apartment at fair market value, a minimum-age worker in Arizona would need to work 70 hours weekly, nearly double time. To pay for a one-bedroom rental, that worker would need to clock 57 hours each week, according to the NLIHC report.
Likewise, to afford that two-bedroom apartment, 1.8 full-time workers earning minimum wage would need to combine their incomes to make rent, while 1.4 workers would need to collaborate to afford a one-bedroom apartment.
The most expensive areas for housing in the state include the Phoenix metro area, where the housing hourly wage is $22.56, followed by the Prescott area ($19.73), Tucson area ($18.25) and Gila County ($17.73).
However, statewide and metro area cost estimates based on Census Bureau data don’t necessarily reflect the enormity of the problem on their own, since in many cases that data — compiled through 2018 — lags behind current market values.
Due to accelerating demand for housing in the wake of the Great Recession a decade ago, the percentage of cost increase for apartment rentals has in some areas grown by double digits annually, while the vast majority of new apartment developments have been aimed at the highest earners in the market.
According to apartments.com, for example, the average rents in Surprise are higher than the estimated fair market rent for a two-bedroom apartment reported by NLIHC: $1,067.
For example, a two-bedroom apartment in Surprise on average rents for $1,359 — more than $300 more expensive.
Rent costs also vary depending on the community. In Peoria, the average rent for a one-bedroom is $1,096 and a two-bedroom apartment goes for $1,272. In Scottsdale, a one-bedroom costs $1,158 on average while a two-bedroom costs $1,399.
According to rentcafe.com, rents in Phoenix rose 10% year-over-year to an average of $1,141 in 2019. Only Avondale saw a steeper annual price hike at 12%, while Mesa and Glendale’s average rent rose by 9% over the same period.
To compare, the median income in America from 2017 to 2018 rose by a modest .8%, according to U.S. Census Bureau data.
According to advocates, the housing crisis is exacerbated by the ongoing COVID-19 public health crisis, which has led to millions of layoffs and job furloughs nationally.
“Housing is a basic human need, but millions of people in America can’t afford a safe, stable home,” stated Diane Yentel, NLIHC president and CEO. “The harm and trauma of this enduring challenge is laid bare during COVID-19, when millions of people in America risk losing their homes during a pandemic.”
According to the U.S. Department of Labor’s Bureau of Labor Statistics, more than 21 million Americans lost work after the novel coronavirus outbreak in March, raising the national unemployment rate from below 4% to more than 14%. It now sits at 11.1% nationally.
Arizona’s unemployment — which historically exceeds the national average — rose from 4.6% reported in January to a high of 13.1% in April, according to a report from the University of Arizona’s Eller College of Management, published at azeconomy.org.
The Arizona Department of Economic Security last week announced that since March 7, the agency has paid unemployment insurance benefits to nearly 323,000 Arizonans, while 557,000 have received pandemic unemployment assistance.
More than $722 million was issued to unemployed claimants in the single week prior to the July 9 press release, officials stated.
“This staggering figure represents hundreds of thousands of Arizonans receiving critical assistance during this time of need,” stated DES Director Michael Wisehart. “However, there is more work to be done. Our teams continue to work around the clock to improve our processes and systems so that we can continue to meet the needs of unemployed Arizonans.”
And with eviction protections enacted by Gov. Doug Ducey in March set to expire on July 23, advocates fear a wave of evictions may further complicate the housing crisis.
Joan Serviss, executive director of the Arizona Housing Coalition, called for Congressional and state leaders to act to help those affected by the outbreak, who may now be at risk for homelessness.
“The lack of housing affordable to for low-wage, often times the ‘essential front-line’ workers is solvable — during and after COVID-19,” she stated in a July 14 press release. “First, to prevent a wave of evictions in the coming months, Congress must provide at least $100 billion in emergency rental assistance to keep low-income renters stably housed in the next coronavirus relief act.”
She also called on Arizona’s leaders to act quickly.
“Our state lawmakers must also take action to restore the state investment to the housing trust fund and enact new tools like a state low income housing tax credit to create 1,800 construction jobs annually to build over 6,000 desperately needed new and affordable housing units and create about $2 billion in total economic state activity,” Ms. Serviss stated.