Exhibiting Wage Levels for Affordable Rentals
In a recent analysis, the affordability gap between median wages and affordable rent wages for studio apartments has become increasingly evident in major U.S. cities. The findings, presented in visualizations by The Economist, reveal that New York City and San Francisco have the most significant disparities, while Portland, Oregon, stands out as one of the more affordable cities.
In New York City, the median wage for a studio apartment is $82,610, but renters would need to earn an additional $31,400 to meet the affordable rent wage. This substantial difference is reflected in the city's housing market, where median household income is around $95,000, yet median-priced homes require an annual mortgage payment exceeding $63,000, taking up roughly 67% of median income just for housing costs.
Conversely, Portland, Oregon, represents one of the more affordable major U.S. cities, where the gap between median wages and affordable rent is much smaller. Although specific numbers for Portland were not detailed in the available data, it is noted in housing affordability studies that cities like Portland have far less severe gaps compared to Northeast metros like NYC. To afford a studio apartment in Portland, renters would only need to earn $20 more than the median wage.
The wages necessary for affordable rent of a studio apartment represent the income a renter would need to earn to spend only 30 percent of their salary on rent. This threshold ensures that housing costs remain within a manageable portion of a renter's income.
In Washington, D.C., the median wage for a studio apartment is $80,670, requiring renters to earn an additional $27,700 to meet the affordable rent wage. In Atlanta, the median wage for a studio apartment is $57,740, necessitating renters to earn an additional $2,300 to meet the affordable rent wage. In Dallas, the median wage for a studio apartment is $57,250, requiring renters to earn an additional $2,600 to meet the affordable rent wage.
In Los Angeles, renters need to earn $87,090 to afford a studio apartment, a difference of $31,400 from the median wage. In Miami, the median wage for a studio apartment is $51,460, requiring renters to earn an additional $1,500 to meet the affordable rent wage. In Austin, the median wage for a studio apartment is $65,690, necessitating renters to earn an additional $6,700 to meet the affordable rent wage.
In Denver, the median wage for a studio apartment is $72,570, requiring renters to earn an additional $12,100 to meet the affordable rent wage. In San Francisco, the median wage for a studio apartment is $106,730, requiring renters to earn an additional $34,600 to meet the affordable rent wage.
These findings underscore the extreme challenges faced by renters in cities like New York City, where the gap between median wages and affordable rent is the most significant. Meanwhile, cities like Portland, Oregon, offer a more manageable difference between income and housing costs, making them relatively affordable compared to other major U.S. cities.
AI analysis of personal-finance data reveals that in New York City, the income required for an affordable studio apartment is significantly higher than the median wage, with renters needing to earn $82,610 and an additional $31,400 to meet the affordable rent wage. On the other hand, Portland, Oregon, shows a much smaller gap, as renters only need to earn $20 more than the median wage to afford a studio apartment. This discrepancy illustrates the differing affordability levels for personal-finance management in these cities.
