A new report out today by "Out of Reach" shows Minnesota has the worst housing affordability gap in the Midwest.
In order to afford a modest, two-bedroom apartment, a person would have to make at least $16.08 an hour because Fair Market Rent is estimated at $836. Add in utilities to that sum, and a household must earn $2,786 monthly -- or $33,438 annually -- to afford the rental without paying more than 30 percent of total income on housing.
A minimum wage earner must work 89 hours per week, 52 weeks per year to afford the same unit. A household including 2.2 minimum wage earners would need to work 40 hours per week year-round in order to make the two-bedroom affordable.
Housing is considered affordable if the household spends no more than 30 percent of its income on housing expenses including basic utilities. Those paying more than that are considered cost-burdened.
The highest rents are in the Twin Cities area, with many requiring an hourly wage of $17.69. Furthermore, the Twin Cities is a tough market for renters right now. The 2.8 percent vacancy rate is one of the lowest in the country, which means demand is up -- and so is the cost.
Minimum wage has been a big topic lately, both locally and nationally. Is that part of the solution to help people meet the basic need of finding a home? Only 6 percent of Minnesotans earn minimum wage, but 50 percent of renters are cost-burdened by their housing.
It's estimated that 278,000 Minnesota households -- both renters and homeowners -- spend more than half of their income on housing, far beyond what they can afford. So, what strategies can be taken for families and communities to make sure housing is more affordable and not the thing that pushes people to the brink of their finances?
FOX 9 News will speak with Colleen O'Connor Toberman, a Minnesota 2020 Community Fellow, about the issue at 9 p.m.