One of the many tragedies of the COVID pandemic is the breakdown, showdown, and tug of war that has developed between landlords and renters around the country.  With the trillions of dollars committed to "help" beat the virus and relieve the nation, why haven't the feds or the state governors distributed the cash to both sides of the renter's equation?  Why are we on the verge of an eviction crisis?  And why are the Centers of Disease Control extending eviction moratoriums when that's Congress's job?

Renter Wage Gap - Great and Growing

There's another question that's being looked at too.  How much money does it take to afford an apartment where you live?  Do the wages people earn amount to enough to cover the cost of housing?

new study from Smartest Dollar looks at renter wage gaps throughout the United States. "The renter wage gap—or the gap between renters’ actual (estimated) wages and the wages they need to make in order to afford the median rent for a one-bedroom rental where they live."

The Dave Ramsey Formula for Being House Poor!

If you follow the formula that a person should only pay a certain percentage of their income for housing, current trends aren't looking good.  Financial Guru Dave Ramsey says - limit your housing payment to no more than 25% of your monthly take-home pay—otherwise you'd be house poor! That 25% limit includes principal, interest, property taxes, homeowner's insurance and, if your down payment is lower than 20%, private mortgage insurance."    The Smartest Dollar study found, "Full-time workers who can only spend 30% of gross income on rent, can't afford a 1-bedroom  rental in any large metropolitan area in the country". 

That points to a two-pronged problem.  Low wages and a shortage of affordable apartment units. If that sounds like Yakima. Washington, well...

Where Does Washington Rate?

Here is what the study found out about Washington state. "The hourly wage needed to afford a 1-bedroom rental in Washington is $25.17, but the estimated hourly wage for renters in Washington is just $16.50. Out of all states, Washington has the 17th largest renter wage gap."   By this measure, we are about $8.67 short each hour of paid work ...or...as former New York Mayoral candidate Jimmy McMillian might say "the rent is too damn high! 

Among the Top Rent Markets, the Vancouver, Portland, Hillsboro are came in at #10

10. Portland-Vancouver-Hillsboro, OR-WA

  • Renter wage gap: -43.3%
  • Median 1-br rent: $1,404
  • Hourly wage needed to afford a 1-br rental: $27.00
  • Estimated hourly wage for renters: $15.30
  • Share of households that are renter-occupied: 38.2%

Find details of the study HERE

READ ON: Here's how to apply for rent relief

 

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