Louisvillians must earn $14.07 per hour at a full-time job to afford the $731 cost for a two-bedroom apartment in the metro area, said a recent study from the National Low Income Housing Coalition.
Louisville minimum-wage earners need nearly two full-time jobs to cover those rent costs—a difficult proposition for single parents.
The analysis considers fair market rent for a “decent” apartment, which calculating that renters would spend no more than 30 percent of their earnings on housing.
Louisville is still cheaper than most surrounding cities. In Indianapolis, minimum-wage earners need two full-time jobs to afford $765 in rent for a two-bedroom apartment. In Nashville, it’s 2.2 full-time minimum wage jobs to afford the $819 rent for a two-bedroom apartment.
Here’s a graphic with a little more detail. Click the icon over the city for more on how they compare to Louisville:
“The rental housing market is booming,” the National Low Income Housing Coalition said in the study.
People are waiting to buy a home, an effect of the recession and its aftermath. Meanwhile, the cost of rent has increased in recent years, the study said.
A poll released in September 2012 suggests that 61% of U.S. renters have been deterred from homeownership for financial reasons, primarily citing difficulty saving for a down payment as a barrier.
With demand for rental apartments accelerating, the national rental vacancy rate fell from 8% directly after the financial crisis to 4.5% by the third quarter of 2012. Falling vacancy rates are a nationwide phenomenon, with two-thirds of all large metro areas experiencing a tightening rental market. Landlords also began to increase rents in 2012, raising prices an average of 3.8% from 2011.
Here’s a state-by-state breakdown of how many jobs minimum-wage earners need to afford a “decent” apartment.
Affordable housing was an issue in February with a Louisville Metro Council proposal to increase the city’s tax on insurance premiums by 1 percentage point. The money raised—an estimated $9.7 million—would go to the Affordable Housing Trust Fund, which was established in 2007 to help address housing needs of low-income and working families.