The United States faces a growing gap between workers’ wages and the amount they have to pay for housing.
Workers have faced stagnant wages for the past 40 years. Yet the cost of rent has steadily increased over this period, with steep increases of 14% to 40% over the past two years.
Now more than ever, workers are feeling the stress of the affordable housing crisis.
As I conducted research in economically hard-hit communities, from Appalachia to Oakland, California, for my recent book, published in November 2021, almost everyone I met lived the painful reality of being caught between virtually stagnant wages and rising housing costs.
As a sociologist, I expected low-wage workers to struggle with the cost of housing. I never expected to meet people who worked two jobs and lived with roommates and still struggled to pay their bills.
For perspective, someone earning $14 an hour would need to work 89 hours a week to cover the rent for a ‘modest’ one-bedroom rental, estimated at $1,615 a month, according to a 2021 National study. Low-Income Housing. Coalition.
Millions of workers earn less than $14 an hour. Among U.S. employees, the average inflation-adjusted hourly wage was just $11.22 in 2022.
In January 2022, median rents in the United States reached their highest level ever. The average median cost of one-bedroom units in the 50 largest metropolitan areas has fallen from $1,386 in 2020 to $1,652 in 2022.
“Now I have to grapple”
I interviewed PL (a pseudonym) for my recent book. He is one of 44 million people in the United States who rent their homes.
PL is a longtime resident of Oakland, CA working full-time in a professional career. Despite job stability, her financial situation is deteriorating.
“The rent increases considerably from year to year. I work at a nonprofit, so I don’t get a raise every year,” PL told me in a 2018 interview. His monthly rent had increased by $250 over the previous three years. Yet his salary remained static.
“That $250 was for grocery bills, gas bills. Now I have to grapple,” PL said.
PL is not alone.
According to the U.S. Department of Housing and Urban Development, households that spend more than 30% of their income on rent are called “cost overloaded.” In 2019, 37.1 million households, or 30.2% of all US households, fall into this category. The situation has worsened since the pandemic.
The financial burden of rising rent costs falls hardest on the half of workers in the United States who earn less than $35,000 a year. After paying rent, about 80% of renter households with incomes below $30,000 have between $360 and $490 to cover all other expenses, including food, health care, transportation, and child care.
Where can you live?
Oakland has been described by gentrification experts as the new center of the national affordable housing crisis.
A growing tech industry in San Francisco, a lack of affordable housing, weak rent control laws, and a predominance of low-wage service-sector jobs contribute to Oakland’s affordable housing shortage.
Vanessa Torres is one of more than 15,000 people who live in a low-income neighborhood in Oakland known as the “Deep East.” When I spoke with Torres in 2020, the worry in his voice was clear.
“That’s the ‘hood. If low-income Latinos can no longer afford it, well, where do we go? If we can no longer afford to live in low-income communities that are considered unsafe, considered poor, then where do we see ourselves?’ said Torres.
In 2019, the median monthly rent for a one-bedroom apartment in Oakland was $2,300.
Torres would have to make nearly $50 an hour, or about $96,000 a year, to be able to pay $2,300 in rent a month, according to the nonprofit California Housing Partnership Corp. Torres earns around $50,000 a year as an educator.
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Always looking for solutions
Elected officials across the country have tried to solve the affordable housing crisis by proposing to raise the minimum wage and impose more meaningful rent control. They also proposed greater government investment in affordable housing and pursued partnerships with developers. So far, none of these efforts have been successful to any significant extent.
Countries where the government controls the economy more have taken a different approach to affordable housing. For example, the Nordic countries treat the development of low-cost and average housing as a public service. This reduces and stabilizes housing prices by removing the cost of land, construction, financing and speculative market management. They have succeeded in producing quality housing that is subsidized and whose prices are permanently regulated.
Known as social housing in Denmark, this strategy has produced 20% of the total housing available there.
Given the problems of affordable housing in the United States, the inventory of other options could be a source of inspiration.
For PL, the Oakland tenant feeling the pressure of rising rents, and many other full-time workers, the future doesn’t look any better. PL, who is in his mid-50s, told me he doesn’t see a way to retire. He should leave his community to retire, but he cannot imagine where he would go. The East Bay is his home.[More than 150,000 readers get one of The Conversation’s informative newsletters. Join the list today.]
Céline-Marie Pascale is professor of sociology at American University
This article is republished from The Conversation under a Creative Commons license. Read the original article.