3 ms·

I agree entirely with the premise of the article. However, I don't understand why they chose to present data based on hourly wages. I think a better idea would

I agree entirely with the premise of the article. However, I don't understand why they chose to present data based on hourly wages. I think a better idea would have been an example like this: 1) In XYZ state, median rent for a 2 bedroom is $1500 (I wish in NY!) 2) Depending on taxation, 25th to 75th percentile AFTER TAX monthly incomes range from $2500 to $4500 per person. I think it's a lot easier to work with these statistics rather than having to multiply a pre-tax hourly wage by 2080 hours in one year, and then divide that number by 12 and multiply it by 0.3 to get the monthly rent rate they're using... Side note, I don't know how anyone affords a mortgage in NY in these market conditions. Property tax alone is nearly $1,000 per month and thanks to SALT regulations, is effectively paid with post-tax money...

cimmanom 8y ago
Quicker version of the math: Few people work 5 days or 40 hours every week of the year (for minimum wage earners, it's typically much messier than that, but as long as we're playing the "minimum wage earners reliably work 40 hours a week" game, we might as well play the "minimum wage earners get a few holidays and sick days" one too). So wage * 2000 is an easy and effective approximation of annual income. Rent should be no more than 30% of monthly income, which is the same as 1/40 of annual income (which is how rental brokers quickly calculate how much salary earners can afford). 1/40 annual income = 1/40 * wage * 2000 = wage * 2000/40 = wage * 50. So you shouldn't be putting more than 50 hours' worth of work into housing every month.
- anoncoward111 8y ago
  Thanks for the math :) I know many people putting an entire paycheck towards housing alone, not including car, food, different types of insurance, internet devices etc And this is just for rent! You don't even get to keep the asset after you've paid for it. And forget about buying a place-- supply is deliberately constricted so that we just pay someone else's mortgage instead :|
  - cimmanom 8y ago
    Yup. Being unable to pay for housing in 50 hrs/mo is what makes it unaffordable.

cimmanom 8y ago

Quicker version of the math: Few people work 5 days or 40 hours every week of the year (for minimum wage earners, it's typically much messier than that, but as long as we're playing the "minimum wage earners reliably work 40 hours a week" game, we might as well play the "minimum wage earners get a few holidays and sick days" one too). So wage * 2000 is an easy and effective approximation of annual income. Rent should be no more than 30% of monthly income, which is the same as 1/40 of annual income (which is how rental brokers quickly calculate how much salary earners can afford). 1/40 annual income = 1/40 * wage * 2000 = wage * 2000/40 = wage * 50. So you shouldn't be putting more than 50 hours' worth of work into housing every month.

anoncoward111 8y ago
Thanks for the math :) I know many people putting an entire paycheck towards housing alone, not including car, food, different types of insurance, internet devices etc And this is just for rent! You don't even get to keep the asset after you've paid for it. And forget about buying a place-- supply is deliberately constricted so that we just pay someone else's mortgage instead :|
- cimmanom 8y ago
  Yup. Being unable to pay for housing in 50 hrs/mo is what makes it unaffordable.