National Low Income Housing Coalition releases Out of Reach 2021
When families pay too much for rent, they’re forced to sacrifice to make ends meet — cutting back at the grocery store or delaying a trip to the doctor. Released last week, the National Low Income Housing Coalition’s Out of Reach 2021 report highlights state and county trends to reveal that households in every corner of Minnesota are spending thousands of dollars more than they can afford each year just to pay the rent for a modest apartment. Now more than ever, as evidenced by the rippling effects of the COVID-19 pandemic, housing security is central to overall health and well-being.
The annual Out of Reach report by the National Low Income Housing Coalition provides rental affordability data for every state, metro area, and county in the US.
Some Minnesota highlights from the 2021 report include:
- The Fair Market Rent (FMR) for a two-bedroom apartment in Minnesota is $1,133. In order to afford this level of rent and utilities — without paying more than 30% of income on housing — a household must earn $3,775 monthly or $45,301 annually.
- From 2020 to 2021, the amount a renter household needs to earn to afford a modest apartment (the state “housing wage”) increased by 6 percent.
- The lowest income households — those earning 30 percent or less of area median income — can afford a modest one-bedroom apartment in only seventeen of Minnesota’s 87 counties.
- Minnesota ranks #23 in the nation for the highest wages required to afford a modest two-bedroom apartment: The wage required to afford a modest two- bedroom apartment in Minnesota is the most expensive in the Midwest, including $3.89 higher than the Wisconsin housing wage, and $5.17 higher than North Dakota’s housing wage.
When rent is out of reach for those who are fully employed, our communities pay the price. We cannot afford to let housing costs continue to climb, while wages remain stagnant. Currently, nearly 30 percent of Minnesota residents — more than 620,700 households — live in a rental unit.
“HOUSING WAGE” — Wage necessary to afford a two-bedroom apartment
- The housing wage represents what Minnesota workers need to earn to afford rent without paying more than 30 percent of their income on housing. In 2021, a Minnesotan would need to earn an annual income of $45,301 to afford a modest two-bedroom apartment. Yet, the median renter in Minnesota earns approximately $41,414 — or is short by $3,887 annually. With the housing wage at $21.78 per hour for a modest two-bedroom apartment and $17.40 for a modest one-bedroom apartment, rent is out of reach for workers in the majority of Minnesota counties.
- Compared to the state average of $21.78, the housing wage in non-metro areas is more than $7 less per hour at $14.59 for a two-bedroom apartment.
- The highest housing wage in the state is located in the counties within the greater Minneapolis 5/ St. Paul metro area, at $25.15 per hour — or earning an annual salary of $52,320 — to afford a modest two-bedroom apartment.
Rent affordable to median-income renter
- For the median-income renter household in Minnesota, an affordable rent — one that does not exceed 30 percent of a household’s monthly income — is $1,035 per month.
- Median-income renters in Washington County can afford the highest rent in the state at $1,297 per month.
- Median-income renters in Itasca County can only afford $595 per month, the lowest level in the state.
- In contrast to the $1,035 affordable to the median-income renter at the statewide level, the median-income renter household in non-metro Minnesota can afford far less — just $799 per month.
What lowest income Minnesotans can afford (30% AMI)
- The lowest income households in Minnesota can afford just $704 per month in rent. Statewide, there is a $201 monthly gap between what a household at 30 percent of area median income earns and what would be required to pay for a modest one-bedroom apartment. Even efficiencies are out of reach; a household earning 30 percent of AMI would need to earn $936 more per year to afford a modest zero-bedroom apartment.
- An individual earning 30 percent of area median income can afford a modest one-bedroom apartment in only seventeen of Minnesota’s 87 counties.
- Rent for a one-bedroom apartment is too expensive for a household earning 30 percent of the area median income in all of the major metro areas in the state. The Minneapolis / St. Paul metro area contains the highest gap between fair market rent and what households earning under 30 percent of AMI can afford; these households would need to earn approximately $3,204 more per year to afford fair market rent.
Hours at minimum wage to afford 1 bedroom apartment
- A minimum wage earner in Minnesota must work more than 43 hours a week in every county in the state to be able to afford rent for a one-bedroom apartment. Statewide, a one-bedroom apartment costs $381 more per month, or $4,572 annually, than a minimum wage earner can afford.
- In non-metro areas, minimum wage workers must work 45 hours per week to afford a modest one-bedroom apartment, and 58 hours per week for a two-bedroom.
- Minimum wage workers in the Twin Cities metropolitan area must work 80 hours per week to afford a modest one-bedroom apartment and 100 hours per week for a two-bedroom — the highest number of hours for major metropolitan areas in the state. This represents an increase in an additional 5-7 hours per week needed from just last year.
Out of Reach data is available for every county and metro area in the country. Click here to see how Minnesota counties compare with each other.