In May of 2011 our previous blog host, Elizabeth, wrote a couple of posts about the affordability of rental housing. (You can check them out by clicking here and here). I ran across her posts while searching for some background information on housing issues here in Tulsa. The numbers were nearly two years old, so I did a little digging to see what had changed. So far, I can tell you the answer is: not much.
The National Low Income Housing Coalition (NLIHC) recommends households spend no more than 30% of their income on housing. To calculate what is called the “housing wage” researchers take a person working full-time, and then calculate the hourly rate he or she would need in order to pay only 30% of their income towards rent.
The numbers have changed only slightly over the past two years. In 2011, the NLIHC stated the annual income needed to afford a 2 bedroom unit at fair market rent in Tulsa was $28,440. For 2013, the NLIHC lists that figure at $28,840, an increase of $400 annually. (Click here for the Oklahoma Data .pdf) This means households in the Tulsa Metro Area require either a single renter earning at least $13.87 an hour to afford a two-bedroom apartment at FMR, or basically 2 adults working full-time at minimum wage.
After zooming in on Tulsa, it is interesting to step back to look at Oklahoma as a whole and compare it to other states. In Oklahoma, if only one person in a household works, he or she must earn $13.18 an hour to afford fair market rent on a two-bedroom apartment and stay within 30% of their budget. To put it another way, a minimum wage earner in Oklahoma must work 73 hours to afford fair market rent. However, in other states, rental housing is less affordable. One of our higher rate neighbors, Colorado, has a housing wage of $17.26 an hour. In the two highest cost examples, California has a housing wage of $25.78 and the District of Columbia is at $27.15.
To focus on the impact this has on low-income families we turn to poverty measures. The federal poverty level for a family of four, according to 2013 Health and Human Services Guidelines, is $23,550 or less. So the income a family requires to afford a two bedroom apartment in Tulsa, according to NLIHC recommendations, is $4,890 more than the national poverty guidelines for a family of four. For a nationwide perspective, the NLIHC’s “Out of Reach” report tells us there is actually no state where rental housing is affordable for low-wage workers. Based on the 2013 data, the fact remains there is a real gap between low-income wages and affordable apartment rates across the entire country.
This data doesn’t automatically mean that low-income families are unable to rent an apartment. What it does mean is that many families are unable to budget the recommended amount of income to food, health, transportation and savings; that money is being moved to housing costs. Housing is a pressing need, but this necessary neglect of nutrition and asset building in order to secure an apartment, if it becomes a long-term issue, will have negative consequences on a family’s future financial stability.
To see a map displaying how rental housing prices impact minimum wage workers in any given state, click here.
To see a map detailing the Housing Wage across the country, click here.
The Tulsa Initiative Blog 
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