7 ms·

Renting 'is unaffordable to minimum wage workers in every state,' study finds

69 points by anderson1993 5y ago

fancydora 5y ago
It would be super cool if we could stop domestic and foreign investment companies from buying everything. We need better renter and buyer protections and assistances
dijit 5y ago
I’m not entirely sure how we got to this place but it definitely feels this way in the UK too at times, though the circumstances might be different. Housing as an absolute expense has risen faster than income in nearly every developed country that I can think of. But, something that I always bring up when minimum wage is mentioned as a panacea: Sweden does not have a federally mandated minimum wage, but people are paid relatively handsomely. This is because of strong union protections. The solution could be unions but I guess the American people have a dim view of unions and companies aggressively crush them.
- strictfp 5y ago
  I live in Sweden and I can tell you that it's not so clear-cut. Rent control means that people have to queue for many years for decent rental apartments. We also have a lot of black market labour. The unions have historically had a strong grip, but are under attack by political forces that want to undermine that market with unskilled workers. And on top of all this I think that people simply always prioritize living expenses above all else. As long as there is less supply than demand, prices are going to rise until some are out-competed. People will have to pay, either with their time or with their money.
  - skohan 5y ago
    Imo some level degree of rent control is needed to prevent forces like housing speculation from causing housing prices to spike wildly in certain market conditions. Otherwise you end up with SF where it's impossible for anyone but the highest income earners to even exist. I think the vienna model seems to have been fairly successful: if you build lots of high-quality public housing, the incentive structure is good for putting roofs over people's heads in an affordable way.
    - deleted 5y ago
      [deleted]
    - strictfp 5y ago
      Speculation is a problem for sure. I think USA is experiencing the burn for not being the number one financial power anymore. If the global market is hurting you, you'll need to protect yourselves by regulation. It's easy to be pro-globalization when you're king of the hill, but not always so great when you're getting the short end of the stick. Oh, and I didn't know about the Vienna model, but Stockholm tried to massively expand housing in the 60s in something called the Million Program, as so many others did. Although that solved the immediate problem, it has been a catastrophy for the cityscape. Isn't lack of housing sort of a side-effect of the very concept of a city?
- mandmandam 5y ago
  > I’m not entirely sure how we got to this place Me neither, but I'm 100% sure it has a lot to do with golden circles teaming up to fuck the majority. At least it 100% for sure is in Ireland. We have captured newspapers and TV completely reliant on government spending to stay afloat running glossy, thick, full-colour property pull-outs and programs. At the same time our own government argues that building social housing would negatively affect the ability of property vultures to capitalise on their tax-free earnings. We have a concrete cartel, protected by our government and courts for decades. We have openly captured regulators, who stifle complaints and drag proceedings out for years or decades only to do nothing. We have lawyers who are perfectly content to make bank off the above, and the tribunals that come when someone's actually caught taking bribes. * We have > 230,000 unoccupied homes, at the same time as record-high homelessness and child deprivation. * We have politically connected assholes making huge sums of money offering hotel rooms as emergency accommodation to homeless families. I could go on and on. And, a huge amount of this is widely known among the population. But what the government has here is an easy scapegoat. Every time they get caught bribing newspapers for fake news, or throwing crowded golf parties during a pandemic with vulture fund owners and judges 100 to a room, they just point the finger at Sinn Fein - a political party that has never once been in power - and talk about things that happened 40 years ago to rile up their aged base. Oh, and our unions are weak and spineless. Not nearly as bad as American unions, but pretty bad all the same.
- nly 5y ago
  Wrt the UK. There was an article recently about "affordable" out-of-London commuter homes being built in Harrow. £300K for <40m^2, one bed, which is barely affordable to a couple both on median salaries.
- eurasiantiger 5y ago
  > how we got to this place Money laundering. It’s as easy as that. International organised and serious crime is buying up real estate to clean their money flows, typically from wholesale meth/cocaine/opioids and human trafficking. Then they started buying up businesses and politicians and now we are here. Construction companies build huge towers full of huge apartments nobody can afford, yet they are all bought up, and nobody lives in them.
- tazjin 5y ago
  It should be noted that in Swedish cities, especially Stockholm, there is also a completely dysfunctional housing market. I have personally rented long-term flats in a bunch of cities: Cologne, Stockholm, Oslo, London, Hurghada, Moscow. Out of these the housing market in Stockholm was by far the worst experience (with the easiest being Oslo & Hurghada). There's nothing on the market because of rent control, official queues are impossibly long (O(years) for anything) and second-hand (third-, ...) apartments are an absolute mess (few tenant rights, tons of short-term contracts, lots of random small issues). In Stockholm this hits foreigners especially hard as lots of Swedes have inherited a bostadsrätt or hyresrätt (the official equivalents of owning/renting property) and rarely deal with this directly. In comparison megacities like Moscow and London are much easier to deal with. The market is rough due to often fierce competition but there are tons of properties available for renting and buying at any quality & price point.
jokoon 5y ago
I'm not american and yahoo has a cookie wall. How exactly are those people managing to survive? My country has welfare that allows people to pay rent and food. I'm not really aware of how american welfare works, but I guess it varies a lot between states?
- thevagrant 5y ago
  I don't know answer but these spring to mind: Debt, overtime, multiple jobs, overcrowding, subletting rooms.
  - DoreenMichele 5y ago
    America also has a lot of homelessness. Yes, there are homeless people with jobs, contrary to what most people seem to think.
    - ravenstine 5y ago
      People underestimate the percentage of homeless who live in their cars and shower at the gym, and aren't just the unwashed "bums" sleeping on benches.
      - deleted 5y ago
        [deleted]
      - Ekaros 5y ago
        That is one solvable group, they just need reasonably priced housing in reasonable locations. The mentally ill and substance abusers(including alcohol), is much more complex issue. And then there is probably small group you will never house, because they prefer to be homeless. Still doesn't mean the two other groups should not be solved. It is just that there is no political will to build enough housing or solve the systematic issues.
  - incone123 5y ago
    Also people who are street homeless or living in their cars, but in many cases still holding down jobs.
bloodyplonker22 5y ago
Minimum wage is not the problem as this article seems to imply. People move up from those starter jobs, they don't stay there forever. The problem is that the politicians and local governments have enacted strict building and zoning laws which disallow for new housing construction. This, in combination with market forces has driven up the price of housing artificially fast.
- mandmandam 5y ago
  Minimum wage is absolutely a problem. Maybe not "the" problem, but it's a massive and highly solvable problem which only the profoundly ignorant could possible believe has no effect on low earners ability to rent a roof over their head. > People move up from those starter jobs, they don't stay there forever. Please explain to me how that's different from a serf paying off their ownership debt, or a slave winning his freedom by defeating 10 consecutive gladiators.
  - leppr 5y ago
    Why would there not be a market for housing people with low wages? There are markets for cheap food, cheap clothes, cheap entertainment, ... Everything except lodging. There's a hiccup somewhere in the "free market" of many countries that prevents it from providing cheap housing, even though there's clearly a huge business opportunity.
    - mandmandam 5y ago
      There are multiple hiccups, which don't seem quite independent of each other as they all make similar groups of people massive amounts of cash. Some words that come to mind are "cartel", "regulatory capture", "lobbying", "government contracts", and "artifical scarcity".
    - glassconclusion 5y ago
      Maybe there is a bare minimum on comfort what people are willing to accept? I lived in Asia for a while. There were some many options. From a 3m2 room (if you wanted to sit, you had to open the door and sit on your bed) to a full mansion. I'm back in a major capital in Europe and there is pretty much nothing you can rent under 1000EUR (70-80% of minimum wage)
tzs 5y ago
They compared minimum wage to median housing costs, and found that minimum wage is not enough to afford median housing. But isn't this exactly what we'd expect? You can't have everyone able to afford housing that is in the top 50% of housing costs (except possibly in Lake Wobegon). This seems like the housing equivalent of those periodic "richest N% have M% of the wealth" where M > N stories that present that as something obviously bad when in fact in any population where there are variations in wealth it is mathematically necessary that the top N% has more than N% of the wealth.
- nickthemagicman 5y ago
  This is the best point of all.
thunderbird120 5y ago
This is the actual source of the article[1]. The methodology does not support the claim the title makes. >LendingTree used U.S. Department of Labor and U.S. Census Bureau data to determine whether owning or renting a home is affordable to a person working a full-time minimum wage job. Assuming a person could afford to spend up to 30% of their gross monthly income on housing, LendingTree calculated how much in monthly housing costs a person working 40 hours a week for 52 weeks a year at an hourly wage equivalent to their state’s minimum wage could afford. Researchers then compared that figure to the median monthly homeowner costs for homes with a mortgage and the median monthly gross rent payment in each state. So, to recap. This study assumes you must spend less than 30% of your income on housing and assumes that all housing costs the median homeowner/rent payment. These are both independently terrible assumptions but combined you get total nonsense. People earning in the bottom 5 percentiles of the income distribution do not rent places that charge 50th percentile rent. They also are not arbitrarily constrained to follow good budgeting guidelines which specify not more than 30% of income to housing. I know this because according to this methodology, the arrangement which I very comfortably made it through grad school in is apparently not possible. [1]https://www.lendingtree.com/home/mortgage/minimum-wage-workers-study/ https://www.lendingtree.com/home/mortgage/minimum-wage-worke...
- bombcar 5y ago
  Yeah see my comment - this is basically useless without additional data. Minimum to median is a big flag.
- pydry 5y ago
  >This study assumes you must spend less than 30% of your income on housing As long as I can remember a reasonable budget has been assumed to be 1/3 on housing, 1/3 on living expenses and 1/3 on savings. I never really saw that as unreasonable. Are there people who think it's reasonable for an average household budget to be 40% living expenses and 60% housing?
  - brailsafe 5y ago
    I had the same thought. It's a reasonable choice for a definition of "to afford rent". Ya you can spend all of your money on rent, but then you'll have nothing left.
Aeolun 5y ago
> The researchers defined a maximum of 30% of gross monthly income on housing as affordable. By that measure rents are unaffordable even to SV workers.
- trhway 5y ago
  >By that measure rents are unaffordable even to SV workers. The rents in MV are $4K ballpark for 2/2 which is a minuscule part of all those $300-600K+ compensations around. Today for tech workers the situation is much more affordable, be it rent or buy, than it was 20 years ago when i first came here. 13 years ago i bought townhouse at the peak for almost 6x my salary back then at 5.25%, and it was a bit of uncomfortable stretch. Today a tech worker for 6x yearly comp at 3% can very comfortably afford a pretty nice house here. In the recent years a bunch of tech neighbors and acquaintances have already bought their second [town]house. Of course the tech workers with these money sloshing around have been the major factor making it much less affordable for everybody else.
- joeberon 5y ago
  Yeah that's really low. I just moved to Hamburg as a postdoctoral researcher and our international housing office said to expect to spend around 60% of our salary on rent. Then again rent here includes heating which changes it a little
  - eurasiantiger 5y ago
    Don’t compare things like that. 60% of your income is going straight into funding someone else’s investments and you have no choice but to pay. It is a sickness, a malaise of society.
    - joeberon 5y ago
      I'm not sure what you're getting at. Sure, I don't like landlords as a "profession", but on the other hand it is not unaffordable, which was the point in the article. It is a mistake to conflate whether or not it is morally okay to whether or not it is affordable. Even if it were affordable that doesn't mean that it is okay. Then again, in terms of my own life and living situation, I honestly can say I do not mind renting.
bombcar 5y ago
> They calculated how much in monthly housing costs a person working 40 hours a week for 52 weeks a year at the minimum wage hourly rate in their state could afford. They then compared that to the median monthly homeowner and rent costs derived from the U.S. Census Bureau’s 2019 American Community Survey. This … signifies nothing? Take a hypothetical state that consists of three people and three houses, one rented by me at my minimum wage job for $350 a month, and the other two rented by Bill Gates and Warren Buffett at $55m/month. The median is way unaffordable to me, yet I have a comfortable rent payment. Comparing minimum to minimum would be a more useful metric.
- reilly3000 5y ago
  https://reports.nlihc.org/oor https://reports.nlihc.org/oor Yep, it’s still not affordable in 93% of US counties for full time minimum wage workers to afford a modest 1BD apartment. Full time work even at minimum wage can be hard to get in many places, where employers like Walmart deliberately schedule workers less than full time to avoid paying benefits.
  - bombcar 5y ago
    That shows modest two bedroom but is still a much better dataset than the one originally posted. Interestingly enough around here they’re advertising double to almost triple the legal minimum for entry-level service jobs such as McDonalds or gas station clerk and apparently are not having many takers.
    - reilly3000 5y ago
      Sorry I pulled a quote from an article that referenced that link, but in retrospect that landing page wasn’t citing my claim very well. The full report on page 17 shows hours needed to work per week to afford a 1BD apartment at minimum wage. The 93% number came from a prior year. > No local minimum wages are sufficient to afford a one-bedroom rental home at the Fair Market Rent with a 40 hour work week. https://nlihc.org/sites/default/files/oor/2021/Out-of-Reach_2021.pdf https://nlihc.org/sites/default/files/oor/2021/Out-of-Reach_...
throwaway98797 5y ago
Earning bottom percentile wage makes occupying median value housing impossible. …
eurasiantiger 5y ago
It’s worrying that people can’t afford their own home. That feeling of security cannot be understated: knowing where you can sleep for the next night. Everyone living in a rented apartment is under constant survival stress, with a subconscious fear of joblessness and eviction.
- mmarq 5y ago
  This is only true in places like the UK or, I understand, the US, where renters do not enjoy the same protection they would in other countries. My brother rents a flat in Germany, he can't be evicted (unless he stops paying rent) and rent increases are pre-determined and tied to inflation (ie, the landlord can't ask for a 5% rent increase each year). In Italy contracts have a minimum 4 year duration, during which rent increases are capped at three quarters of inflation.
  - kcplate 5y ago
    > unless he stops paying rent Which,,,is the reason that probably 99/100 people get evicted in the US. The remaining is generally due to property destruction or neglect of the property specifically counter to the lease agreement. A landlord not renewing a lease to a tenant at the one of a lease term is not an eviction.
- slfnflctd 5y ago
  Homeowners have the same fears, they're just pushed a little further out. Even if your house is paid off, you still have to worry about property taxes, basic upkeep, insurance (unless you go without and risk losing it all, which leads right back to that stress), possibly large HOA fees... the fact is, unless you have a lot of savings or are 100% certain you'll always have money coming in, no one's safe from anxieties about being able to stay where they live. I agree that it's worse for renters, but owning a house is not what it once was and definitely doesn't make the stress go away. I have thought for a long time now that basic housing (your own private room with a door, heating/cooling, water and electricity) should be considered a fundamental human right and guaranteed as such by the powers that be. Without such a guarantee, the vast majority of us are going to continue to feel existential dread over the possibility that losing our ability to generate income could lead to being homeless.
rasz 5y ago
In other news: Investing in real estate has never been better! Just buy couple of properties and money starts flowing from every direction. Dont want annoying tenants? Dont even bother renting long term. Airbnb that bitch or just sit on it and watch house prices go up and up and uuuuup.
shalmanese 5y ago
Previous discussions: https://news.ycombinator.com/item?id=23863899 https://news.ycombinator.com/item?id=23863899 https://news.ycombinator.com/item?id=27841355 https://news.ycombinator.com/item?id=27841355 https://news.ycombinator.com/item?id=27852220 https://news.ycombinator.com/item?id=27852220 https://news.ycombinator.com/item?id=27850918 https://news.ycombinator.com/item?id=27850918 https://news.ycombinator.com/item?id=27852875 https://news.ycombinator.com/item?id=27852875 https://news.ycombinator.com/item?id=20225313 https://news.ycombinator.com/item?id=20225313 https://news.ycombinator.com/item?id=23854403 https://news.ycombinator.com/item?id=23854403
refurb 5y ago
They compared minimum wage to median rent. Why? Of course someone making the legal minimum wage can’t afford the median rent. Median rent in SF is $2,600 [1]. That’s a pretty nice 1-bedroom in a nice part of town. You can find single rooms to rent for less than half that. That would seem like a better benchmark than the median? This analysis was intentionally sandbagged.
drran 5y ago
x=[1, 2, 3, 4, 5] min(x) < avg(x) true OMG!!!
- drran 5y ago
  What happened with HACKER news?
sys_64738 5y ago
Minimum wage != livable wage.
- danaris 5y ago
  We know that is true. A lot of us think it should not be true.

69 points by anderson1993 5y ago

It would be super cool if we could stop domestic and foreign investment companies from buying everything. We need better renter and buyer protections and assistances

dijit 5y ago

I’m not entirely sure how we got to this place but it definitely feels this way in the UK too at times, though the circumstances might be different. Housing as an absolute expense has risen faster than income in nearly every developed country that I can think of. But, something that I always bring up when minimum wage is mentioned as a panacea: Sweden does not have a federally mandated minimum wage, but people are paid relatively handsomely. This is because of strong union protections. The solution could be unions but I guess the American people have a dim view of unions and companies aggressively crush them.

strictfp 5y ago
I live in Sweden and I can tell you that it's not so clear-cut. Rent control means that people have to queue for many years for decent rental apartments. We also have a lot of black market labour. The unions have historically had a strong grip, but are under attack by political forces that want to undermine that market with unskilled workers. And on top of all this I think that people simply always prioritize living expenses above all else. As long as there is less supply than demand, prices are going to rise until some are out-competed. People will have to pay, either with their time or with their money.
- skohan 5y ago
  Imo some level degree of rent control is needed to prevent forces like housing speculation from causing housing prices to spike wildly in certain market conditions. Otherwise you end up with SF where it's impossible for anyone but the highest income earners to even exist. I think the vienna model seems to have been fairly successful: if you build lots of high-quality public housing, the incentive structure is good for putting roofs over people's heads in an affordable way.
  - deleted 5y ago
    [deleted]
  - strictfp 5y ago
    Speculation is a problem for sure. I think USA is experiencing the burn for not being the number one financial power anymore. If the global market is hurting you, you'll need to protect yourselves by regulation. It's easy to be pro-globalization when you're king of the hill, but not always so great when you're getting the short end of the stick. Oh, and I didn't know about the Vienna model, but Stockholm tried to massively expand housing in the 60s in something called the Million Program, as so many others did. Although that solved the immediate problem, it has been a catastrophy for the cityscape. Isn't lack of housing sort of a side-effect of the very concept of a city?
mandmandam 5y ago
> I’m not entirely sure how we got to this place Me neither, but I'm 100% sure it has a lot to do with golden circles teaming up to fuck the majority. At least it 100% for sure is in Ireland. We have captured newspapers and TV completely reliant on government spending to stay afloat running glossy, thick, full-colour property pull-outs and programs. At the same time our own government argues that building social housing would negatively affect the ability of property vultures to capitalise on their tax-free earnings. We have a concrete cartel, protected by our government and courts for decades. We have openly captured regulators, who stifle complaints and drag proceedings out for years or decades only to do nothing. We have lawyers who are perfectly content to make bank off the above, and the tribunals that come when someone's actually caught taking bribes. * We have > 230,000 unoccupied homes, at the same time as record-high homelessness and child deprivation. * We have politically connected assholes making huge sums of money offering hotel rooms as emergency accommodation to homeless families. I could go on and on. And, a huge amount of this is widely known among the population. But what the government has here is an easy scapegoat. Every time they get caught bribing newspapers for fake news, or throwing crowded golf parties during a pandemic with vulture fund owners and judges 100 to a room, they just point the finger at Sinn Fein - a political party that has never once been in power - and talk about things that happened 40 years ago to rile up their aged base. Oh, and our unions are weak and spineless. Not nearly as bad as American unions, but pretty bad all the same.
nly 5y ago
Wrt the UK. There was an article recently about "affordable" out-of-London commuter homes being built in Harrow. £300K for <40m^2, one bed, which is barely affordable to a couple both on median salaries.
eurasiantiger 5y ago
> how we got to this place Money laundering. It’s as easy as that. International organised and serious crime is buying up real estate to clean their money flows, typically from wholesale meth/cocaine/opioids and human trafficking. Then they started buying up businesses and politicians and now we are here. Construction companies build huge towers full of huge apartments nobody can afford, yet they are all bought up, and nobody lives in them.
tazjin 5y ago
It should be noted that in Swedish cities, especially Stockholm, there is also a completely dysfunctional housing market. I have personally rented long-term flats in a bunch of cities: Cologne, Stockholm, Oslo, London, Hurghada, Moscow. Out of these the housing market in Stockholm was by far the worst experience (with the easiest being Oslo & Hurghada). There's nothing on the market because of rent control, official queues are impossibly long (O(years) for anything) and second-hand (third-, ...) apartments are an absolute mess (few tenant rights, tons of short-term contracts, lots of random small issues). In Stockholm this hits foreigners especially hard as lots of Swedes have inherited a bostadsrätt or hyresrätt (the official equivalents of owning/renting property) and rarely deal with this directly. In comparison megacities like Moscow and London are much easier to deal with. The market is rough due to often fierce competition but there are tons of properties available for renting and buying at any quality & price point.

jokoon 5y ago

I'm not american and yahoo has a cookie wall. How exactly are those people managing to survive? My country has welfare that allows people to pay rent and food. I'm not really aware of how american welfare works, but I guess it varies a lot between states?

thevagrant 5y ago
I don't know answer but these spring to mind: Debt, overtime, multiple jobs, overcrowding, subletting rooms.
- DoreenMichele 5y ago
  America also has a lot of homelessness. Yes, there are homeless people with jobs, contrary to what most people seem to think.
  - ravenstine 5y ago
    People underestimate the percentage of homeless who live in their cars and shower at the gym, and aren't just the unwashed "bums" sleeping on benches.
    - deleted 5y ago
      [deleted]
    - Ekaros 5y ago
      That is one solvable group, they just need reasonably priced housing in reasonable locations. The mentally ill and substance abusers(including alcohol), is much more complex issue. And then there is probably small group you will never house, because they prefer to be homeless. Still doesn't mean the two other groups should not be solved. It is just that there is no political will to build enough housing or solve the systematic issues.
- incone123 5y ago
  Also people who are street homeless or living in their cars, but in many cases still holding down jobs.

bloodyplonker22 5y ago

Minimum wage is not the problem as this article seems to imply. People move up from those starter jobs, they don't stay there forever. The problem is that the politicians and local governments have enacted strict building and zoning laws which disallow for new housing construction. This, in combination with market forces has driven up the price of housing artificially fast.

mandmandam 5y ago
Minimum wage is absolutely a problem. Maybe not "the" problem, but it's a massive and highly solvable problem which only the profoundly ignorant could possible believe has no effect on low earners ability to rent a roof over their head. > People move up from those starter jobs, they don't stay there forever. Please explain to me how that's different from a serf paying off their ownership debt, or a slave winning his freedom by defeating 10 consecutive gladiators.
- leppr 5y ago
  Why would there not be a market for housing people with low wages? There are markets for cheap food, cheap clothes, cheap entertainment, ... Everything except lodging. There's a hiccup somewhere in the "free market" of many countries that prevents it from providing cheap housing, even though there's clearly a huge business opportunity.
  - mandmandam 5y ago
    There are multiple hiccups, which don't seem quite independent of each other as they all make similar groups of people massive amounts of cash. Some words that come to mind are "cartel", "regulatory capture", "lobbying", "government contracts", and "artifical scarcity".
  - glassconclusion 5y ago
    Maybe there is a bare minimum on comfort what people are willing to accept? I lived in Asia for a while. There were some many options. From a 3m2 room (if you wanted to sit, you had to open the door and sit on your bed) to a full mansion. I'm back in a major capital in Europe and there is pretty much nothing you can rent under 1000EUR (70-80% of minimum wage)

tzs 5y ago

They compared minimum wage to median housing costs, and found that minimum wage is not enough to afford median housing. But isn't this exactly what we'd expect? You can't have everyone able to afford housing that is in the top 50% of housing costs (except possibly in Lake Wobegon). This seems like the housing equivalent of those periodic "richest N% have M% of the wealth" where M > N stories that present that as something obviously bad when in fact in any population where there are variations in wealth it is mathematically necessary that the top N% has more than N% of the wealth.

nickthemagicman 5y ago
This is the best point of all.

thunderbird120 5y ago

This is the actual source of the article[1]. The methodology does not support the claim the title makes. >LendingTree used U.S. Department of Labor and U.S. Census Bureau data to determine whether owning or renting a home is affordable to a person working a full-time minimum wage job. Assuming a person could afford to spend up to 30% of their gross monthly income on housing, LendingTree calculated how much in monthly housing costs a person working 40 hours a week for 52 weeks a year at an hourly wage equivalent to their state’s minimum wage could afford. Researchers then compared that figure to the median monthly homeowner costs for homes with a mortgage and the median monthly gross rent payment in each state. So, to recap. This study assumes you must spend less than 30% of your income on housing and assumes that all housing costs the median homeowner/rent payment. These are both independently terrible assumptions but combined you get total nonsense. People earning in the bottom 5 percentiles of the income distribution do not rent places that charge 50th percentile rent. They also are not arbitrarily constrained to follow good budgeting guidelines which specify not more than 30% of income to housing. I know this because according to this methodology, the arrangement which I very comfortably made it through grad school in is apparently not possible. [1]https://www.lendingtree.com/home/mortgage/minimum-wage-workers-study/ https://www.lendingtree.com/home/mortgage/minimum-wage-worke...

bombcar 5y ago
Yeah see my comment - this is basically useless without additional data. Minimum to median is a big flag.
pydry 5y ago
>This study assumes you must spend less than 30% of your income on housing As long as I can remember a reasonable budget has been assumed to be 1/3 on housing, 1/3 on living expenses and 1/3 on savings. I never really saw that as unreasonable. Are there people who think it's reasonable for an average household budget to be 40% living expenses and 60% housing?
- brailsafe 5y ago
  I had the same thought. It's a reasonable choice for a definition of "to afford rent". Ya you can spend all of your money on rent, but then you'll have nothing left.

Aeolun 5y ago

> The researchers defined a maximum of 30% of gross monthly income on housing as affordable. By that measure rents are unaffordable even to SV workers.

trhway 5y ago
>By that measure rents are unaffordable even to SV workers. The rents in MV are $4K ballpark for 2/2 which is a minuscule part of all those $300-600K+ compensations around. Today for tech workers the situation is much more affordable, be it rent or buy, than it was 20 years ago when i first came here. 13 years ago i bought townhouse at the peak for almost 6x my salary back then at 5.25%, and it was a bit of uncomfortable stretch. Today a tech worker for 6x yearly comp at 3% can very comfortably afford a pretty nice house here. In the recent years a bunch of tech neighbors and acquaintances have already bought their second [town]house. Of course the tech workers with these money sloshing around have been the major factor making it much less affordable for everybody else.
joeberon 5y ago
Yeah that's really low. I just moved to Hamburg as a postdoctoral researcher and our international housing office said to expect to spend around 60% of our salary on rent. Then again rent here includes heating which changes it a little
- eurasiantiger 5y ago
  Don’t compare things like that. 60% of your income is going straight into funding someone else’s investments and you have no choice but to pay. It is a sickness, a malaise of society.
  - joeberon 5y ago
    I'm not sure what you're getting at. Sure, I don't like landlords as a "profession", but on the other hand it is not unaffordable, which was the point in the article. It is a mistake to conflate whether or not it is morally okay to whether or not it is affordable. Even if it were affordable that doesn't mean that it is okay. Then again, in terms of my own life and living situation, I honestly can say I do not mind renting.

bombcar 5y ago

> They calculated how much in monthly housing costs a person working 40 hours a week for 52 weeks a year at the minimum wage hourly rate in their state could afford. They then compared that to the median monthly homeowner and rent costs derived from the U.S. Census Bureau’s 2019 American Community Survey. This … signifies nothing? Take a hypothetical state that consists of three people and three houses, one rented by me at my minimum wage job for $350 a month, and the other two rented by Bill Gates and Warren Buffett at $55m/month. The median is way unaffordable to me, yet I have a comfortable rent payment. Comparing minimum to minimum would be a more useful metric.

reilly3000 5y ago
https://reports.nlihc.org/oor https://reports.nlihc.org/oor Yep, it’s still not affordable in 93% of US counties for full time minimum wage workers to afford a modest 1BD apartment. Full time work even at minimum wage can be hard to get in many places, where employers like Walmart deliberately schedule workers less than full time to avoid paying benefits.
- bombcar 5y ago
  That shows modest two bedroom but is still a much better dataset than the one originally posted. Interestingly enough around here they’re advertising double to almost triple the legal minimum for entry-level service jobs such as McDonalds or gas station clerk and apparently are not having many takers.
  - reilly3000 5y ago
    Sorry I pulled a quote from an article that referenced that link, but in retrospect that landing page wasn’t citing my claim very well. The full report on page 17 shows hours needed to work per week to afford a 1BD apartment at minimum wage. The 93% number came from a prior year. > No local minimum wages are sufficient to afford a one-bedroom rental home at the Fair Market Rent with a 40 hour work week. https://nlihc.org/sites/default/files/oor/2021/Out-of-Reach_2021.pdf https://nlihc.org/sites/default/files/oor/2021/Out-of-Reach_...

throwaway98797 5y ago

Earning bottom percentile wage makes occupying median value housing impossible. …

eurasiantiger 5y ago

It’s worrying that people can’t afford their own home. That feeling of security cannot be understated: knowing where you can sleep for the next night. Everyone living in a rented apartment is under constant survival stress, with a subconscious fear of joblessness and eviction.

mmarq 5y ago
This is only true in places like the UK or, I understand, the US, where renters do not enjoy the same protection they would in other countries. My brother rents a flat in Germany, he can't be evicted (unless he stops paying rent) and rent increases are pre-determined and tied to inflation (ie, the landlord can't ask for a 5% rent increase each year). In Italy contracts have a minimum 4 year duration, during which rent increases are capped at three quarters of inflation.
- kcplate 5y ago
  > unless he stops paying rent Which,,,is the reason that probably 99/100 people get evicted in the US. The remaining is generally due to property destruction or neglect of the property specifically counter to the lease agreement. A landlord not renewing a lease to a tenant at the one of a lease term is not an eviction.
slfnflctd 5y ago
Homeowners have the same fears, they're just pushed a little further out. Even if your house is paid off, you still have to worry about property taxes, basic upkeep, insurance (unless you go without and risk losing it all, which leads right back to that stress), possibly large HOA fees... the fact is, unless you have a lot of savings or are 100% certain you'll always have money coming in, no one's safe from anxieties about being able to stay where they live. I agree that it's worse for renters, but owning a house is not what it once was and definitely doesn't make the stress go away. I have thought for a long time now that basic housing (your own private room with a door, heating/cooling, water and electricity) should be considered a fundamental human right and guaranteed as such by the powers that be. Without such a guarantee, the vast majority of us are going to continue to feel existential dread over the possibility that losing our ability to generate income could lead to being homeless.

rasz 5y ago

In other news: Investing in real estate has never been better! Just buy couple of properties and money starts flowing from every direction. Dont want annoying tenants? Dont even bother renting long term. Airbnb that bitch or just sit on it and watch house prices go up and up and uuuuup.

shalmanese 5y ago

Previous discussions: https://news.ycombinator.com/item?id=23863899 https://news.ycombinator.com/item?id=23863899 https://news.ycombinator.com/item?id=27841355 https://news.ycombinator.com/item?id=27841355 https://news.ycombinator.com/item?id=27852220 https://news.ycombinator.com/item?id=27852220 https://news.ycombinator.com/item?id=27850918 https://news.ycombinator.com/item?id=27850918 https://news.ycombinator.com/item?id=27852875 https://news.ycombinator.com/item?id=27852875 https://news.ycombinator.com/item?id=20225313 https://news.ycombinator.com/item?id=20225313 https://news.ycombinator.com/item?id=23854403 https://news.ycombinator.com/item?id=23854403

refurb 5y ago

They compared minimum wage to median rent. Why? Of course someone making the legal minimum wage can’t afford the median rent. Median rent in SF is $2,600 [1]. That’s a pretty nice 1-bedroom in a nice part of town. You can find single rooms to rent for less than half that. That would seem like a better benchmark than the median? This analysis was intentionally sandbagged.

drran 5y ago

x=[1, 2, 3, 4, 5] min(x) < avg(x) true OMG!!!

drran 5y ago
What happened with HACKER news?

sys_64738 5y ago

Minimum wage != livable wage.

danaris 5y ago
We know that is true. A lot of us think it should not be true.