New Study Says Decent Housing in California is Out of Reach for Minimum-Wage Earners -- California Capitol Hill Bulletin -- Volume 10, Bulletin 25 -- September 12, 2003

For the fifth year in a row, according to a September 8, 2003 national study by the National Low Income Housing Coalition, nowhere in the United States is the minimum wage generous enough to cover the fair market rent (FMR) for a two-bedroom apartment. Titled "Out of Reach, 2003 - America's Housing Wage Climbs", the study discusses the crisis in rental housing across the nation by comparing housing costs with minimum wages.

The study contains data for every jurisdiction in the nation based on housing wage, defined as the hourly rate needed to afford a two-bedroom apartment at the FMR value. The FMR, which is also used to determine the dollar amount of Section 8 vouchers, represents the cost of adequate "low-end" rental housing.

The study places the national median housing wage (HW) at $15.21, an amount that is 3.74 percent higher than the year before and 37 percent higher than it was in 1999. However, the housing wage for California is $21.18, making it the second least affordable state in the nation after Massachusetts ($22.40). The study also found that California is home to five out of ten least affordable metropolitan areas, including San Jose (which is also the least affordable metropolitan area in the U.S. with a housing wage of $35.02), followed by San Francisco ($34.13), Oakland ($27.31), Santa Cruz-Watsonville ($25.79), and Orange County ($23.46). California also leads the nation in the number of least affordable counties; among the ten listed, Santa Clara (HW of $35.02), San Mateo ($34.13), San Francisco ($34.13), and Marin ($34.13) counties are the least affordable counties in that order, followed by Contra Costa (6th least affordable, with HW of $27.31), Alameda (7th, $27.31), and Santa Cruz (8th, $25.79). On the other hand, California ranks 10th (HW of $12.20) on the list of states with least affordable combined nonmetro areas.

The study also offers statistical information and a state-by-state-analysis of the percentage change in housing wage in 2002-2003. California, with an annual change of 7.59 percent, placed third as a state with the largest changes in housing wage, preceded only by Maryland (12.09 percent) and Virginia (9.07 percent), while Oklahoma was the only state with a negative percentage change of minus 1.25. The study reveals yet another interesting statistic about California; Sacramento leads the nation as the metropolitan area with the largest changes in housing wages, with a 27.18 percent change in 2002-2003, while San Francisco leads as the metropolitan area with the nation's largest decrease (-8.51 percent) in the HW. Of course, everything is relative -- the HW in San Francisco had been astronomically high, and it now has declined to just extremely high. The study estimates that in order to afford the FMR for a decent two-bedroom apartment in California, the minimum-wage worker would have to work 126 hours per week.

For more information, visit the National Low Income Housing Coalition website at http://www.nlihc.org .

To expand communications between Washington and California, the California Institute provides periodic bulletins regarding current activity on Capitol Hill that directly impacts our state. Bulletins are published weekly during sessions of Congress, and occasionally during other periods.

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