Uncategorized Rental housing costs further "Out of Reach" for low-income Hoosiers

Rental housing costs further "Out of Reach" for low-income Hoosiers

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According to a report released this week, the Housing Wage for Indiana has increased to $13.58, meaning the average Hoosier family must earn this hourly wage to be able to afford rent and utilities for the average two-bedroom apartment. The rate increased from $13.41 in 2009.

The Out of Reach 2010 report was released jointly by The National Low Income Housing Coalition and the Indiana Association for Community Economic Development (IACED).

Indiana’s Housing Wage ranked 20th among the states, D.C. and Puerto Rico. Indiana’s rate was average for Midwest states, falling in the middle of neighboring states Ohio ($13.39), Kentucky ($12.19), Michigan ($14.34) and Illinois ($17.44).

A release issued on Thursday by the Indiana Association for Community and Economic Development provided greater insight into what this number represents for Hoosiers:

In Indiana, a minimum wage worker earns an hourly wage of $7.25.  In order to afford the FMR (Fair Market Rent) for a two-bedroom apartment, a minimum wage earner must work 75 hours per week, 52 weeks per year; or, a household must include 1.9 minimum wage earner(s) working 40 hours per week year-round in order to make the two bedroom FMR affordable.

In Indiana, the estimated mean (average) wage for a renter is $11.68 an hour.  In order to afford the FMR for a two-bedroom apartment at this wage, a renter must work 46 hours per week, 52 weeks per year.  Working 40 hours per week year-round, a household must include 1.2 worker(s) earning the mean renter wage in order to make the two-bedroom FMR affordable.

Find the data for your area

Data for specific counties or metropolitan areas is available on the National Low Income Housing Coalition’s website. The local information is based on the Fair Market Rent for a two-bedroom apartment.

How is the Housing Wage determined?

Indiana’s Housing Wage is based on the Fair Market Rent for a two-bedroom apartment of $706.  In order to afford this level of rent and utilities, without paying more than 30% of income on housing, a household must earn $2,353 monthly or $28,241 annually.  Assuming a 40-hour work week, 52 weeks per year, the result is the Housing Wage of $13.58.