LOS ANGELES (CNS) - Los Angeles metropolitan area residents need to work 60.9 hours per week to pay the rent on a one-bedroom household in the city, according to a report released today that identified the toughest cities for residents to make rent across the country.
Analyzing the median cost of rent as well as the median hourly wage in major cities, researchers at Self Financial determined that Los Angeles residents need to work the third most hours per week to afford rent, compared to other large metro areas nationwide.
Self Financial, a Texas-based financial technology company, found that residents in Los Angeles today must work 60.9 hours per week to afford a one-bedroom and 78.6 hours per week for a two-bedroom dwelling.
Fair market rent in the Los Angeles area -- including Long Beach and portions of Orange County, including Anaheim -- is $1,517 for a one-bedroom residence, or $1,956 for a two-bedroom, according to the report, with a year- over-year increase of roughly 9%. Meanwhile, median hourly wages are $20.52, and median annual wages are $42,680.
"Housing affordability has been a persistent issue in several parts of the country due to the rise in rental costs outpacing wage growth. This is especially true in some of the largest U.S. cities, many of which are bearing the brunt of COVID-19," Self Financial's experts said. "At the national level, rent increases have only slightly exceeded wage growth over the past decade."
According to the report, which culled data from Zillow and the U.S. Bureau of Labor Statistics, between 2010 and 2019, the median monthly rent nationwide increased by 20.5%, while the median hourly wage only rose by 17.6%. New data from the U.S. Department of Housing and Urban Development reported fair market rents to be approximately $980 for a one-bedroom and $1,200 for a two-bedroom rental in 2020; meanwhile, the most recent median hourly wage estimate was $19.14 nationwide.
A common rule of thumb is that renters should spend no more than 28% of their income on housing, Self Financial's experts said. Using that rule, a person in the U.S. earning the median wage would have to work 42.2 hours per week in order to afford a one-bedroom rental, or 51.8 hours per week to afford a two-bedroom rental.
In certain states and cities, especially those along coastlines, the larger gap between wages and rents has led to greater housing affordability issues, according to the report. In Hawaii, California, New York, and Massachusetts, someone earning the median hourly wage would need to work between 50 and 60 hours a week to afford a one-bedroom rental without being considered cost-burdened.
By contrast, states in the Midwest and the South have the most affordable housing. Based on median wages and housing costs, workers in states like Iowa, Ohio and Kentucky can afford a one-bedroom rental working fewer than 30 hours per week
For complete results for all metro areas included in the study, visit www.self.inc/blog/work-hours-to-pay-rent.