Housing-Wage Gap



Housing-Wage Gap, Portland MSA, 2017

  Studio One Bedroom Two Bedroom Three Bedroom Four Bedroom
Fair Market Rent ($ per month) $946 $1,053 $1,242 $1,808 $2,188
Annual income needed to afford FMR** ($) $37,836 $42,116 $49,675 $72,313 $87,511
Hourly Wage needed to afford FMR at 40 hours per week ($) $18.19 $20.25 $23.88 $34.77 $42.07
Oregon minimum wage as percentage of wage needed to afford FMR 50.9% 45.7% 38.7% 26.6% 22%
Weekly Hours of work at Oregon minimum wage needed to afford FMR 78.7 87.6 103.3 150.3 181.9
Washington minimum wage as percentage of wage needed to afford FMR 60.5% 54.3% 46.1% 31.6% 26.1%
Weekly Hours of work at Washington minimum wage needed to afford FMR 76.8 85.5 100.9 146.8 177.7

Source: US Department of Housing and Urban Development, Department of Labor

*The U.S. Department of Housing and Urban Development (HUD) annually estimates Fair Market Rents (FMR) for 530 metropolitan areas and 2,045 non-metropolitan county FMR areas. FMRs are gross rent estimates. They include the shelter rent plus the cost of all tenant-paid utilities, except telephones, cable or satellite television service, and internet service. The current definition used is the 40th percentile rent in a metropolitan area, the dollar amount below which 40 percent of the standard-quality rental housing units are rented. The 40th percentile rent dollar amount is drawn from the distribution of rents of all units occupied by recent movers (renter households who moved to their present residence within the past 15 months).
**Calculation based on the assumption that 30 percent of a person's annual income is used to pay rent.

Why is this important?

An inadequate supply of affordable housing for low-income families often results in social, racial, and economic segregation. Specifically, a high housing-wage gap can lead to increases in the concentration of poverty. Residents living in areas of concentrated poverty tend to have fewer opportunities for employment, less access to quality education, and less safe neighborhoods. Neighborhood affluence is also one of the most powerful predictors of physical health.[i]


[i] C. Browning and K. Cagney, "Moving Beyond Poverty: Neighborhood Structure, Social Processes and Health," Journal of Health and Social Behavior 44 (2003): 552-571.