Rents Are Through The Roof >10% Over PrePandemic Levels; In 0 of 50 States Can a Minimum Wage Worker Afford Housing

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Rents are going through the roof across much of the U.S.
BY IRINA IVANOVA
UPDATED ON: JULY 19, 2021 / 9:28 AM / MONEYWATCH


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There's videos, graphics, and graphs on the page so worth it to visit the actual link

Rents are going through the roof across much of the U.S.

BY IRINA IVANOVA
UPDATED ON: JULY 19, 2021 / 9:28 AM / MONEYWATCH



Ryan David didn't expect the modest one-bedroom apartment he owned in Dupont, Pennsylvania, to set off a bidding war. But when David listed the second-floor unit for rent in February, he got 160 applications in only a few days — about five times what he'd normally expect. One would-be tenant offered to pay an entire year's rent upfront. Another who had recently moved to the area, offered to pay $650 a month — $50 more than David was asking.


"That really opened my eyes," David said. "Two years ago people might not have wanted it, but now it was a feeding frenzy."

Since last summer, David has watched the rent on apartment listings in northeast Pennsylvania surge to $700 or $800 a month for a one-bedroom — several hundred dollars higher than is typical in this working-class enclave, where the biggest city is formerly industrial Scranton. At the same time, he's observed a growing number of New York license plates in the local streets.

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Apartment rents in the northeast portion of Pennsylvania have soared to $700 or $800 a month for a one-bedroom, much higher than normal for the region. Scranton, pictured here, is the area's largest city.ANGELA WEISS/AFP
He ended up renting the unit to the family that offered $650. "They're great tenants," he said. He plans to sell another three-unit rental property he owns for $125,000 — double what he paid for it two years ago.


Cities seeing biggest spikes
After dipping last spring, rents around the U.S. have not only recovered but are now blasting past their pre-pandemic levels. In 44 of the nation's 50 largest metro areas, rents have surpassed where they were before the health crisis, according to data from Realtor.com. Nationwide, the median rent reached a record high of $1,575 in June, an increase of 8% from a year ago, according to the website.

But this time, it's not high-priced urban areas driving rent into orbit. Instead, real estate data show the biggest increases are in smaller cities, driven largely by workers who fled urban areas during the pandemic for more safety, space or more privacy.


"It is a big readjustment, after another big readjustment during the pandemic," said Danielle Hale, chief economist at Realtor.com.

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According to Hale, rents are growing fastest in cities seen as viable alternatives to large urban areas. The fastest-growing rents "tend to be [in] areas that are affordable, that are not super far away from the large [urban] areas, but far enough away that you can get a good deal," she said.

Riverside, California, has posted the biggest increases over the last year, with typical rents jumping nearly 10% for a studio and 32% for a two-bedroom apartment. However, a comparable two-bedroom would cost $600 or $700 more in Los Angeles than in Riverside, making the smaller city attractive to Angelenos now able to work remotely since the pandemic.

Meanwhile, Silicon Valley workers have decamped from the Bay Area to places like Sacramento, driving the median rent 20% higher over the last year to a median of $1,800.

"Even though we've seen rents decline in the Bay Area, typical asking rent is over $2,800," Hale said. "Especially if you're not going into the office every day, there's a lot of other things you can do with that money."


"We'll probably have to leave"

The influx of new residents is putting financial pressure on longtime locals — with landlords often eager to take advantage of well-heeled newcomers.


Kellie Andress, 37, has been living in Mississippi's DeSoto county, just across the state line from Memphis, since she and her husband lost their jobs in the oil and gas industry in early 2020. This January, they signed a new lease for a three-bedroom house for $850 a month. Soon after that, "everything skyrocketed," Andress said. She started noticing houses like hers listing for double the rent she was paying, approaching $1,900 a month. Then, a friend of Andress' who rents from the same management company, received a month's notice to vacate her apartment.

Andress fears that when her own lease is up, she'll have to move. "Come February, if I didn't have an oil and gas job or my husband doesn't have a promotion, we'll probably have to leave," she said.

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The Andresses rent this three-bedroom house in DeSoto county, Mississippi. Since an investment company took over the property, Kellie Andress says no one will answer her calls asking for repairs.KELLIE ANDRESS
Andress' husband, a manager for an oil-change company, is currently the family's sole breadwinner — about $36,000 a year — or just above the median pay in the county. Andress stays home so she can care for the couple's two young children.

In the year since the Andresses moved to the area, rents in the greater Memphis region have surged at the second-fastest rate in the U.S., with a median two-bedroom in the area going for $1,200 in June. Landlords report record-low vacancies, with many dwellings re-renting even before an existing tenant moves out.

Many of the houses in Andress' area have been bought by investing companies, and Andress sees rental prices rising far above what locals can afford. Her own landlord, Mynd Management, last month revealed plans to buy 20,000 single-family homes across the U.S.

"There are houses here renting for $1,400, $1,600 a month, and I just don't know how that's possible," Andress said, adding, "Trying to get into an apartment here is impossible — they're all just booked."

Housing market crunch
The frenzy in homebuying isn't helping home prices and rents. There are 20% fewer houses for sale today than a year ago, and the few houses that are available are increasingly going to cash-rich buyers or investors. That's pushing up home prices, with the result that 4 in 10 counties nationwide are deemed "unaffordable" for homeownership.


Many first-time homebuyers, who have fewer resources, are finding they can't compete — and have to keep renting.

"Millennials, they're turning 30 — an age that we typically see people move into homes and out of the rental market. But with the shortage, it's been challenging for them to make that transition," said Realtor.com's Hale. "You have a large number of people looking to live somewhere, and that's contributing to shortage."

Bill Gassett, a realtor at Re/Max Executive Realty, who works in and around Framingham, Massachusetts, saw the market take off a few months after COVID-19 struck last year. "I've been through a couple of boom cycles ... this has blown them all away," said the realtor of 34 years.

Typically, the area would have 50 to 200 houses for sale at a time, Gassett said. This year, he's seen as few as five. At peak homebuying season in April and May, "you literally could put a house on the market and there would be 20 offers on it."

Home rentals there are relatively rare, but Gassett had a chance to list one earlier this year. The homeowners were relocating abroad and chose to rent out their 3,800-square-foot, five-bedroom home in Ashland, instead of selling. Their asking rent of $4,500 a month shocked Gassett, who recalled thinking, "Jeez, that's a lot of money."

"But in the back of my head, I was thinking, 'This market is so crazy, and they might just get it,'" he added. "And of course they did."


Big-city deals going fast
On the other end of the spectrum, rent in the nation's urban hubs — New York, Boston, Chicago, Seattle, Washington, D.C., and the San Francisco Bay area — remain below their level from a year ago. But real estate agents don't expect that to last much longer.


In New York, Joyce Liendo, a broker with the Oxford Property Group, said that "1,000%" of her business these days is driven by people who are returning to the city after waiting out the pandemic in other states.


"A year ago, I could not get people to rent two bedrooms on the Upper West Side to save my life," Liendo told CBS MoneyWatch. This past weekend, she listed two apartments in the wealthy Manhattan neighborhood and received dozens of inquiries overnight. Both apartments were rented to the first person to view them.

In many cases, apartment rents in the city's five boroughs are equal to or below their year-ago levels. She said less popular neighborhoods outside of Manhattan or less-desirable apartments are still offering sweeteners like a free month of rent.

But many would-be renters are finding that those "incentives are disappearing really quickly," she said. "A month ago ... people were still trying their luck, asking, 'Can we get two free months?' Oh, no, baby, those days are gone!"

First published on July 16, 2021 / 9:52 AM

© 2021 CBS Interactive Inc. All Rights Reserved.
 
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Contains an interactive map that shows average wage, housing wage, national rank, and allows you to insert your zip code for local data

Minimum wage workers can't afford rent anywhere in America



Housing has become so expensive in the United States that the typical minimum wage worker cannot afford rent, according to a new report.
There is no state, county or city in the country where a full-time, minimum-wage worker working 40 hours a week can afford a two-bedroom rental, a report from the National Low Income Housing Coalition showed.
A full-time minimum-wage worker can afford a one-bedroom rental in only 7% of all US counties — 218 counties out of more than 3,000 nationwide.
The federal minimum wage is $7.25.


But the report showed that a worker would need to earn $24.90 per hour in order to afford a two-bedroom home at Fair Market Rent.
And a $20.40 "housing wage" would be needed for a one-bedroom. Fair Market Rents are government estimates of what a person should expect to pay for a modest home in their area.
A housing wage is the amount a worker would need to earn to afford a home without spending more than 30% of their income on rent and utilities.
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"These amounts are far higher than many Americans -- including seniors, people with disabilities, and working families -- can spend on housing," wrote Marcia L. Fudge, secretary of the US Department of Housing and Urban Development, in the preface to the report.
Rents are out of reach
Nationally, the average fair market rent is $1,061 a month for a one-bedroom and $1,295 a month for a two-bedroom, according to the report.

Meanwhile, the average renter's hourly wage is $18.78, an income that can absorb only $977 a month in rent without being housing cost burdened. A household living on one minimum wage income can afford even less, $377 a month, the report showed.

The average renter In 17 states -- including California, Florida, and New York -- earns at least $5.00 below the state's average two-bedroom housing wage.
The biggest gap is in Hawaii, where the difference between what an average renter earns, and the state's two-bedroom housing wage is $20.13.
And even the states, the District of Columbia, and several dozen counties and municipalities that have minimum wages higher than the federal minimum wage don't clear the bar.
Many homebuyers are dropping out of the market

Many homebuyers are dropping out of the market

In California, where the minimum wage is $14 an hour, the cost of housing is so high that it still has the highest housing wage: A person in California needs to earn $39.03 an hour to afford a two-bedroom apartment and $31.06 for a one-bedroom.
A minimum-wage worker would have to put in 89 hours every week just to afford the one-bedroom and 112 hours to afford the two-bedroom.

West Virginia has among the lowest housing wages. But with a minimum wage of $8.75 an hour, workers would still need to earn $14.83 an hour to afford a two-bedroom apartment, and $12.12 for a one-bedroom.
The report includes an interactive map that shows how much you need to earn in your area to afford rent.

The pandemic's impact
The pandemic exacerbated the unstable housing situation for many people, and local, state and federal governments put protections in place to prevent a tidal wave of evictions. An unprecedented amount of federal emergency rent relief -- $46 billion -- was set aside to provide relief for struggling renters and their frustrated landlords.

But many will still struggle to pay rent in the future without addressing longer-term housing affordability, according to the report.
There are 7.5 million low-income renters who are "extremely" cost burdened — meaning they spend more than half of their income on housing, according to the report. This can put renters at risk of homelessness. More than 580,000 people were homeless during the peak of the coronavirus crisis last year, according to HUD.
Housing affordability is a greater challenge for Black and Latino households, the report found, with those groups more likely to be housing cost burdened.

During the pandemic, Black and Latino workers saw higher unemployment rates, leading to these groups being more likely to have fallen behind on rent,
according to analysis of data from the Census Bureau by the Center on Budget and Policy Priorities
The NLIHC a non-profit policy advocate for growing and improving affordable housing, recommends expanding rental assistance to all eligible struggling renters and making investments in the national Housing Trust Fund and public housing to create, preserve, and rehabilitate affordable homes.
It also asks Congress to create a permanent National Housing Stabilization Fund to provide temporary assistance for households at risk of eviction and to strengthen and enforce renters' protections, in order to keep renters stably housed.
 
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I combined 2 related topics. Cut and pasted the articles for mobile users, but the article links have videos, graphs, graphics, etc. if you are on desktop.

I have seen this here in Oklahoma City. The article mentions particularly mid level, B kind of cities hit the most. 2 yrs or so ago, I was getting a free month or 3 with new lease, $200 move in, cash back, gift cards to Starbucks, all kind of incentives that indicated it was a buyer's/renter's market. Last week, I got declined due to an old collection on my credit check to a place I make 5-6x the rent (so not like they could claim I dont make enough). They so bougie and demand is so high I guess, they only want ****** with 750 credit in their community :lol: ( storm2006 storm2006 Park a-friend a-friend Park Harvey- low key going from a 4/2 w garage to a 2/2 would have been tough anyways).

Places that were in the $1,000 range pre pandemic literally asking $1450+ with no renovations or changes, just because they can get it. I also think OKC in particular is one of those cities, well the construction downtown or all these 1Mil+ homes and overpriced ***, redundant, apartments proves it, that a lot of money from corporations and migrants from more expensive, bigger cities are coming too due to low C.O.L which is ironically driving the prices up. Also, getting the classic gentrification of the formerly "undesirable" black parts of town.
 
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Rich dudes cashed out when people were *** out. Now they all control how high they want rent to be because they can do it in unison. Happens all the time and it sucks

the plus side is if you’re selling your house. Company bought my house almost sight unseen, cash, 30Kish over asking price.,
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uncalled4boy

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Lease Needs To Be Renewed By The 25th And Saw The Jump In Price And Could Only Shake My Head.
 
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blastercombo blastercombo Fam I have a house in Elgin, 1hr south of OKC but more important 15 minutes north of Fort Sill Army Base. Housing crunch is so bad for our nation's heroes, they are on a waiting list for 2 yrs for on base housing and therefore forced to take their BAH and move off base and the rents are so inflated due to the Military money being there, BAH doesn't even cover it. E7s living in slummy apartmentsI only charge $1300 which covers my mortgage plus mgmt fees, I make like $60 profit. It was too low before the pandemy (should have been 1500), after and with the well chronicled housing crunch, I should be like $1700. I'm not that dude though, they're keeping my mortgage paid allowing me to keep the house. Whenever they move out, I'll explore my options. My realtor keeps calling me swearing it'll sell in a week
Lease Needs To Be Renewed By The 25th And Saw The Jump In Price And Could Only Shake My Head.
I live in a neighborhood of duplexes. My landlords just let me renew for $1400 then listed the other side for $1900, which even $1900 is probably low. They got like 6 or 8 of them :sick: though so they're not hurting. Next door neighbors in the other direction got in when the opposite happened and rents were plummeting, they're paying $1250.
 
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blastercombo blastercombo Fam I have a house in Elgin, 1hr south of OKC but more important 15 minutes north of Fort Sill Army Base. Housing crunch is so bad for our nation's heroes, they are on a waiting list for 2 yrs for on base housing and therefore forced to take their BAH and move off base and the rents are so inflated due to the Military money being there, BAH doesn't even cover it. E7s living in slummy apartmentsI only charge $1300 which covers my mortgage plus mgmt fees, I make like $60 profit. It was too low before the pandemy (should have been 1500), after and with the well chronicled housing crunch, I should be like $1700. I'm not that dude though, they're keeping my mortgage paid allowing me to keep the house. Whenever they move out, I'll explore my options. My realtor keeps calling me swearing it'll sell in a week
I’m no expert but the loans military use works different than a normal loan. It limits what they can buy for whatever reason. House needs to be in certain condition. This is what my realtor said when a military dude sent me an offer. Their inspection process messes things up she said.
 
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That's how those "third-world" slums get created.

People migrate internally from the rural areas to the cities in search of opportunity. As housing costs go up, people who can't afford to rent get pushed out further and further. Because those countries don't really have the political will to control housing costs, people who dont have anything to go back to in the countryside end up creating their own makeshift shelters in areas close to the urban centers, where they know they can still access jobs and authorities won't kick them out easily.


As the world urbanises, many low-income families are often evicted by force and pushed to the edge of cities to unplanned and poorly serviced areas.

It starts with tent cities, and it turns into this:
1626880606024.png


And **** gets harder to solve when society gets to this point.

Company bought my house almost sight unseen, cash, 30Kish over asking price.
We need to do what Canada is doing (tax unnocupied homes, especially those owned by institutions). I'd even go further: tax unnocupied homes so hard that paying people to live in them becomes less onerous for banks.
 
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House is just under 10 yrs old. It'd qualify for any type of loan, it was just hard to sell when I was still living in it then (plus I had a bad realtor working against my interests) in 2018 I decided to move to OKC so after a few months of paying mortgage on an empty house and her not letting me fire her, I told her just rent it and she had these people in a few days so it stopped that bleeding.
It's a good thing hybrid/remote work is becoming more common.
True, I'm only on site because we have some contractors coming out to install some equipment and they have to be escorted. But look at my new office. I don't even know what those 2 things over there are

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It's a good thing hybrid/remote work is becoming more common.
I honestly don’t see this taking over like people think. Research will show the truth eventually, but from my experience work productivity goes down the drain. The human element is undefeated
 

Mark Antony

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I honestly don’t see this taking over like people think. Research will show the truth eventually, but from my experience work productivity goes down the drain. The human element is undefeated
Massive companies have already been in it for over a year now and things still function. In some cases productivity went up and folks ended up overworking. It's important to have a plan and that employees have objectives.
 
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I got lucky and switched units in the same complex during the pandemic and my rent went down bc no one was moving. This spike is sad and predictable.
 
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Massive companies have already been in it for over a year now and things still function. In some cases productivity went up and folks ended up overworking. It's important to have a plan and that employees have objectives.
True. Again, just my experience. I wonder how many people got laid off simply to consolidating work to a smaller amount of people and how good this is for worker longevity? Would be cool to see the numbers over time
 
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Lowkey, I am probably less productive on site right now. Just watching the news on this big *** screen

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I disagree with the premise.

Why is a 2 bedroom home supposed to be the basic standard of housing being measured against?

I think stuff like this does more harm than good. We’ve turned housing into something that is a privilege rather than a right.

I think as a first world country we suck. Out of the 5 things that should be free and available for every citizen we really really fail.

Education through college - fail
Medical care - fair
Protection - succeed
Food - fail
Housing - fail

and I’m just talking we should have a baseline of basics that every citizen should be allowed to have. There are great tiny home communities and it’s government red tape preventing the explosion of that. I see no reason that every person in the US can’t be given a free 1 bedroom / more depending on size of family. And if people want an actual house etc they can work to get that.

Might be idealistic thinking but seems achievable for the “best” country
 
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When I was 25, I got tired of living with my parents and siblings. I was working in a factory, and most of my co-workers lived about 5 miles away in "the hood" so to speak. In these neighborhoods there aren't many apartment complexes, it's moreso houses where the 1st and 2nd floor are rented seperately OR in my case you had a 10x10 bedroom to yourself and you share the kitchen/bathrooms with the people in the other rooms.

So anyways, I lived there for 1.5 years and only paid $225 a month in rent, didn't have to worry about utilities or other random expenses that you have with an apartment by yourself. I was at work 10 hours a day, plus I didn't have a car at the time, so the bus rides shaved another 2 hours off my day. I was only there pretty much to Eat, Shower and Sleep.

The only negatives were the other roommates trashing the shared areas, and never taking out the trash ....they'd literally have it overflowing out of the container (it had no lid) and I'd have to scoop out the excess into the new replacing bag. One dude was a borderline alcoholic and would bring home 2 FourLokos after he got off from work, and then he'd run out to the corner store right before they close and get another two to drink before going to sleep. Well he'd drink the first can 100% and the 2nd can would have anywhere from 50-75% left and I would have to dig thru the trash to dump them in the sink, otherwise risk them rotating and leaking all over the place when I remove the trash bag. The 2nd roommate would go through a 12 pack of Mountain Dew every 2 days and it was the same thing, although I had to dump the liquids into the toilet...this guy would chew Grizzly and Copenhagen and spit it into the cans.

So anyways living there was somewhat aggravating, but it allowed me to save up alot of money, hell I was only working like 20-30 hours a week back then cause I still had a prepaid cell phone that cost $20 for 90 days service. Bus fare only cost me like $80 bucks a month. And plus making minimum wage/ working less than 40 hrs a week you automatically qualify for Food Stamps.

These articles don't really acknowledge "humble" living circumstances that are available, and they fail to acknowledge that most people split rent with a significant other...two people making minimum wage can easily afford there own apartment together.
 
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$7.25 x 40 hrs a week x 4 weeks a month x 2 people= ~$2,320 ($2513 since a month isnt exactly 4 weeks by the way) Typically to avoid being house poor or house burdened as they call it, you want your rent to stay under 30% of your total income so $696 or so should be their max. God forbid if they have kids and have to pay for day care. Utilities, transportation, food, cell phones, etc. (which is why the first number is important) add up real quick. Hopefully you can got on all the Government assistance, but again that's tough and in OK which is the 6th or 7th cheapest state

You need a 3 bedroom for $700 in Oklahoma City its something like this https://www.rent.com/oklahoma/oklah...dos_houses_townhouses_3-bedroom_max-price-700 2 bedrooms can be done, I know these are nice only because they just rebuilt them https://www.rent.com/oklahoma/oklahoma-city-apartments/uptown-kelley-4-1059756 or something like https://www.rent.com/oklahoma/oklahoma-city-apartments/village-at-stratford-4-479254 if you can do a 2. They'd probably want a little bit nicer, maybe safer neighborhood, closer to work, etc. and stretch to $900 and their options increase greatly but again after tax, you're well over half your household income just on rent at that point. 4
 

Air Champa

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It's crazy driving around here. You can go from seeing rich upper class neighborhoods to slums in less than 10 minutes depending on traffic. You'd be shocked to see what people have to live in because they can't afford anything else.

This is in a pretty cheap part of the country. I can't imagine how bad it is elsewhere.
 
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Put in Fairfax, VA in rent.com just for ****s and giggles since I know some people on my team are there. Yikes. Cheapest 2br is $1800
 
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