There also is something called the “housing wage,” which is determined by calculating the hourly rate a full-time worker needs to earn in order to pay only the recommended 30% of his or her income towards rent. According to the National Low Income Housing Coalition, the housing wage in Tulsa County is currently $14.21 for a 2 bedroom apartment at fair market rent. So, in other words, for a household to afford rent on a 2 bedroom apartment, 2 people would need to be working full-time for at least minimum wage.
The annual income needed to keep housing costs affordable has increased $720 from 2013 to 2014. This increase means a family earning just enough to comfortably afford rent on a 2 bedroom unit in 2013 would need a 2.4% pay raise just to keep up with the rise in housing costs in Tulsa.
Stepping back to look at Oklahoma as a whole, we find the housing wage is slightly lower than in Tulsa County. If only one person in a household works, he or she must earn $13.25 an hour to afford fair market rent on a two-bedroom apartment and stay within 30% of their budget. This also means a minimum wage earner in Oklahoma must work 73 hours to afford fair market rent.
In other states, rental housing is even less affordable. One of our higher rate neighbors, Colorado, has a housing wage of $17.61 an hour. In the three highest cost examples, Hawaii has a housing wage of $31.54, California’s is $26.04 and the District of Columbia sits at $28.25.
The rates in other states may make Oklahoma’s affordable housing situations seem less dire, but NLIHC’s 2014 “Out of Reach” report tells us there is no state where rental housing is affordable for low-wage workers. The federal poverty level for a family of four, according to 2014 Health and Human Services Guidelines, is $23,850 or less. So the income a family requires to afford a two bedroom apartment in Tulsa, according to NLIHC recommendations, is $5,710 more than the national poverty guidelines for a family of four.
Not surprisingly, experts have found a connection between affordable housing and childhood food security. As households spend more of their budget on basic housing costs, other necessities are being neglected, such as food, health care, transportation and retirement savings. This comes at a time when SNAP and other food subsidy programs have been cut and a lack of individual retirement savings is beginning to worry policy experts.
And more Americans are renting, as homeownership has declined in recent years. The renter share of all U.S. households grew from 31% in 2004 to 35% in 2012, according to a study by the Joint Center for Housing Studies of Harvard University. Many of us imagine renters as being young, single people who often have unrelated roommates and this group does account for 35% of renters. Yet, the same study found almost as many renters, 32%, are actually families with children.
And as the demand for rental housing increases, so do median gross rents. Yet, the median income of those who rent has not increased, in fact their median wages have dropped in recent years. This has resulted in more individuals and families living in rental housing they cannot afford. One in two households are paying more than 30% of their income in rent and one in four is paying 50% of their income in rent. And in Tulsa, like many areas across the country, the waiting list for Housing Choice Voucher is currently closed and the estimated wait time is anywhere from 1 to 3 years.
In early 2013, sequestration and budget cuts resulted in the loss of more than 70,000 housing vouchers from the federal Housing Choice Voucher Program. Policy experts at the Center on Budget and Policy Priorities have advocated for restoring this funding based on evidence that housing assistance effectively fights homelessness and the current level of funding falls far short of meeting the needs of low-income Americans. The reports from the National Low Income Housing Coalition and the Joint Center for Housing Studies of Harvard University reinforce this argument.
For more information on housing assistance, you can visit the U.S. Department of Housing and Urban Development (HUD) website or for local information the Housing Authority of the City of Tulsa website.
[An earlier version of this post said the Tulsa “waiting list for federal housing assistance is currently closed,” when it is more accurate to say the Housing Choice Voucher list for Tulsa is currently closed. This has been corrected above.]