False: Full-time low income wage earners cannot afford a 2 bedroom rental anywhere in the U.S.

False: Full-time low income wage earners cannot afford a 2 bedroom rental anywhere in the U.S.

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Full-time minimum wage workers cannot afford a two-bedroom rental anywhere in the U.S. and cannot afford a one-bedroom rental in 95% of U.S. counties, according to the National Low Income Housing Coalition’s annual “Out of Reach” report.

Source: Minimum wage workers cannot afford rent in any U.S. state

This report is an amazing bit of obfuscated definitions intended to mislead. This study comes from an activist lobbying organization that issues basically the same report year after year. And year after year, the media falls for the misdirection.

The study says low wage earners cannot afford “HUD’s fair market rent without spending more than 30% of their incomes”. You need to dig into the details to determine what that actually means. From their study,

The report’s Housing Wage is an estimate of the hourly wage full-time workers must earn to afford a rental home at HUD’s fair market rent without spending more than 30% of their incomes. Fair market rents are estimates of what a family moving today can expect to pay for a modestly priced rental home in a given area. The kind of home that can be rented for the fair market rent is in decent condition, but it is not luxury housing.

The sleight of hand is to understand the definition of “HUD’s fair market rent”. Their “report” does not define this but the definition is readily available.

Fair Market Rent (FMR) is defined as the 40th percentile of rents paid by recent movers (renters who moved in the last 24 months) in a given FMR area.

Thus, this consumer cannot afford to live in a home rented at the 40th percentile of the market. It says nothing about renting homes at the lower end of the market, costing less than those at the 40th percentile. It says nothing about the size of the market at different price points. It ignores that a majority states set their own, much higher minimum wage, up to more than twice the Federal level.

The implication that they can not rent any home is false – specifically, what it actually says is that someone earning less income can only afford to rent a home at the lower end of the market. This is hardly a dramatic conclusion!

This activist group puts out essentially the same study every year, and every year, the reporters read the press release – and not the report – and fail to report accurately on the sleight of hand being done here.

This blog has covered this item twice before. This topic is a great example of effective propaganda messaging – and highlights poor reporting by the media at the same time.

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