The classic rule of thumb for budgeting rent is to allocate no more than one-third of your income. However, in today’s rental market, this guideline is becoming increasingly difficult to follow. The National Low Income Housing Coalition (NLIHC) has revealed a stark reality: the gap between what people earn and what they need to afford rent is widening. This article will explore this issue, highlighting the disparity between the living wage and rental costs across the United States.
Understanding the Housing Wage

The Housing Wage, as defined by the NLIHC, is the hourly wage a full-time worker must earn to afford a modest rental unit without spending more than 30% of their income on housing. In 2023, the national average Housing Wage was $28.58 for a two-bedroom rental and $23.67 for a one-bedroom rental. However, this national average masks significant variations across states.
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Extreme Variations by State

The NLIHC’s study reveals a vast range in Housing Wages across the United States. In California, for instance, the required hourly wage for a two-bedroom rental is a staggering $42.25, while in Arkansas, it’s a comparatively lower $16.27. These disparities underscore the impact of location on rental affordability.
Minimum Wage vs. Housing Wage

The federal minimum wage of $7.25 per hour falls far short of the Housing Wage in most states. This discrepancy creates a challenging situation for low-income renters, who often struggle to find housing they can afford. Compounding the issue is the shortage of affordable rental units. The NLIHC reports that there were only 34 affordable units available for every 100 extremely low-income renters. To provide a comprehensive overview, we have the 25 states where exact wage required to rent a two-bedroom apartment is the most expensive. (The average hourly wages are taken according to ZipRecruiter):
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California – $42.25

The sunny state tops the list with the highest wage required to rent a two-room apartment. However, the average wage of the state is only $38.10.
Hawaii – $41.83

The globally popular tourist destination has a pretty big gap between the hourly wage and the minimum wage required. The hourly wage for this state is only $26.48.
Massachusetts – $41.64

The state that is home to Boston has the third highest cost of renting a two bedroom apartment. The average hourly wage in the state is $20.51.
New York – $40.08

The popular conception is that this is one of THE costliest states to live in. It is not far off from the truth. Moreover, the average hourly wage here is $31.31.
Washington – $36.33

Not to be confused with the country’s capital, Washington is a completely separate state. It is home to Mount Rainier. The average hourly wage here is $27.66.
Wyoming – $36.33

The landlocked state boasts grand adventures in the wilderness. However, for the inhabitants, life is bit hard. The average hourly wage here is $27.32.
District of Columbia – $35.35

If you didn’t know, the DC in Washington DC stands for “District of Columbia”. The average hourly wage at the capital of the country is $35.43. The gap here is not as much.
New Jersey – $33.25

The home state of the iconic Statue of Liberty does not have the most expensive rent required. However, the gap is still considerable, with the average hourly wage at $27.72.
Colorado – $32.13

Denver, with its vibrant downtown, belongs to this state, as does the Rocky Mountain National Park. The average hourly wage here is $23.93.
Connecticut – $31.93

The state has a reputation for its coastal cities and its many small towns. Even then, the gap is quite significant with the average hourly wage here being $24.64.
Maryland – $31.08

The abundant coastlines and waterways mark out this state, traversing between Chesapeake Bay and the Atlantic Ocean. The average hourly wage here is $24.03.
Florida – $30.59

Some would argue that it is the sunnier state, compared to California. The gap, though, is definitely comparable. The average hourly wage here is $19.89.
Arizona – $29.93

Arizona is where the Colorado River carved behind the Grand Canyon. The gap can be comparable to the grandness, as the average hourly wage is $18.45.
New Hampshire – $29.86

The state’s characteristics are its quaint towns and large expanses of wilderness. The average hourly wage here is $19.47.
Oregon – $29.72

This unassuming state has a cost of living that is, on average, 10% higher than the rest of the country. But the average hourly wage here is $27.05.
Nevada – $27.99

The home of Las Vegas, and the Hoover Dam! This state, with a lot of its area bordering the desert, has an average hourly wage of $19.21.
Rhode Island – $27.78

Colonial towns on the seaside are the highlights of this state in the New England region. The average hourly wage of this state is $18.55.
Virginia – $26.84

It is one of the original 13 colonies that made up the United States, and it is also considered one of the best places to live. The average hourly wage here is $19.90.
Alaska – $26.32

The snowy and wintry landscape of Alaska is not for the faint-hearted or the cold-blooded. The average hourly wage in this state is $27.29.
Delaware – $26.09

The state is also known as the chemical capital, the credit card capital, and the corporate capital. The average hourly wage here is $24.79.
Vermont – $25.54

The stunning natural landscape of the region draws in many and all, as well as the 100-odd covered old wooden bridges. The average hourly wage here is $30.88. For once, the rates are not worrying.
Texas – $25.06

One of the states bordering Mexico has a cost of living that is 7% lower than the national average. The average hourly wage here is $22.71.
Utah – $24.93

Utah has maintained a consistent ranking of being one of the safest US states and cities. The average hourly wage here is $24.11.
Georgia – $24.75

Georgia boasts incredible overall affordability, and is one of the best places to buy a home and raise a family. The average hourly wage here is $23.76.
Maine – $24.73

Maine’s beautiful coastline scenery is rivalled by its historic lighthouses and other sites. The average hourly wage in this coastal state is $23.50.
Minimum Wage Workers and the Rental Market

For minimum wage workers, the situation is even more dire. In some states, they would need to work an impractical number of hours per week to afford a one-bedroom apartment. For example, the NLIHC found that minimum living wage earners in Hawaii would need to work 107 hours per week, while those in New York would need to work 98 hours.
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