Every year the National Low Income Housing Coalition releases its annual ‘Out of Reach’ report comparing rental housing prices with hourly wages of renters.
The most recent numbers for Texas are alarming. According to the 2019 report, the fair market rent (FMR) for a two-bedroom apartment in Texas is now $1,055. This is 5% higher than the FMR in 2018 ($1,005) and 10% higher than the FMR in 2017 ($956).
Furthermore, wages are not keeping pace with rent increases. The average renter hourly wage in 2019 is $18.94, compared with $18.20 in 2018 and $17.89 in 2017. This means the average renter wage only increased 4% from 2018 to 2019 and 6% from 2017 to 2019, far slower than the increases in FMR.
The Housing Wage
The 'Out of Reach' report also calculates what a household should earn to reasonably afford a two-bedroom apartment in Texas, without having to work overtime or sacrifice other necessities to afford housing. This is called the “Housing Wage.” Households earning a Housing Wage do not have to spend more than 30% of their annual income on rent (a general rule of thumb for affordability).
The 2019 Housing Wage for Texas is $20.29, a full $1.35 per hour more than the actual average renter’s wage of $18.94. The Housing Wage of $20.29 per hour equates to $3,516 per month (assuming a 40-hour work week), or $42,197 per year.
Here’s the 2019 Housing Wage for the largest metro areas in Texas. Of the five largest metro areas in Texas, only Houston currently has an average renter wage higher than the Housing Wage.
- Houston: Housing Wage: $21.23; Average renter wage: $22.22
- Dallas: Housing Wage: $23.10; Average renter wage: $22.83
- San Antonio: Housing Wage: $20.19; Average renter wage: $15.73
- Austin: Housing Wage: $25.29; Average renter wage: $20.34
- El Paso: Housing Wage: $15.98; Average renter wage: $11.71
Housing Wage vs. Minimum Wage
The $20.29 state Housing Wage is particularly problematic for minimum wage (currently $7.25 per hour) workers. Minimum wage workers logging 40 hours per week can only afford $377/month in rent before becoming cost burdened by housing expenses or being forced to work additional hours.
In fact, workers earning the minimum wage must work 2.8 full time jobs to afford the FMR for a two-bedroom apartment ($1,055) or 2.3 full time jobs to afford the FMR of a one-bedroom apartment ($858). That equates to working 112 hours per week to afford a two-bedroom apartment and 91 hours per week to afford a one-bedroom apartment.
Want to see affordability statistics for minimum wage and average wage workers in your area? We encourage you to view the full 2019 'Out of Reach' report, which includes statistics for each metro area and county in Texas.
On the House blog posts are meant to provide general information on various housing-related issues, research and programs. We are not liable for any errors or inaccuracies in the information provided by blog sources. Furthermore, this blog is not legal advice and should not be used as a substitute for legal advice from a licensed professional attorney.