High rents: How much do you have to make to afford a two-bedroom home?

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by Jaime Cerreta and Catherine Holland

Bio | Email | Follow: @CerretaNews

Video report by Jaime Cerreta

Posted on March 27, 2014 at 12:07 PM

Updated Thursday, Mar 27 at 12:22 PM

PHOENIX -- While Arizona has a reputation for being a relatively affordable place to live compared to the rest of the country, a new study shows that it's not quite affordable enough for many who live paycheck to paycheck.

In its Out of Reach 2014 report, the National Low Income Housing Coalition says Arizona housing costs more than low-wage earners can afford.

In order to rent a two-bedroom home at the fair market value of $911 in Arizona, an individual needs to make $17.52 an hour, $3,037 per month or $$36,447 per year. That's more than twice the minimum wage in Arizona, which went up to $7.90 at the start of the year. The federal minimum wage is less -- $7.25 an hour.

Even though Arizona's minimum wage is slightly more than the federal mandate, a person making $7.90 an hour would have to work 89 hours a week, 52 weeks a year to afford that two-bedroom home.

The annual Out of Reach report looks at what it calls a "housing wage," which is what a person needs to make per hour to afford fair market rent for a two-bedroom home without spending more than 30 percent of his or her income on housing.

"The Housing Wage has become a standard indicator of housing affordability," Sheila Crowley, president and CEO of the National Low Income Housing Coalition, wrote in the report's introduction.

Using that housing wage as the point of comparison, Out of Reach 2014 ranks all 50 states, the District of Columbia and Puerto Rico from most expensive to least expensive. Arizona is No. 19 on that list, making it one of the most expensive states in which to rent a home.

When you break Arizona down into its 15 counties, the most and least expensive locales in the Grand Canyon State emerge.

  • Coconino County: $19.63
  • Maricopa County: $18.40
  • Pinal County: $18.40
  • Pima County: $16.38
  • Cochise County: $15.92
  • Yuma County: $15.62
  • Yavapai County: $15.08
  • Mohave County: $14.40
  • Gila County: $13.90
  • Santa Cruz County: $12.79
  • La Paz County: $12.75
  • Navajo County: $12.71
  • Graham County: $12.42
  • Greenlee County: $12.25
  • Apache County: $12.25

Looking at the U.S. as a whole, the housing wage is $18.92 an hour, more than 2.5 times the federal minimum wage and nearly $1.50 more than the housing wage in Arizona.

"At the current federal minimum wage of $7.25, Out of Reach 2014 calculated that it would take more than two people working full-time minimum wage jobs to afford a decent two-bedroom rental home for their family," according to the National Low Income Housing Coalition.

"Raising the federal minimum wage to $10.10 an hour would benefit millions of low income Americans; however, it unfortunately would an insufficient response to America’s housing affordability crisis," Crowley said in a news release.

Based on the Out of Reach 2014 data, the five most expensive states in which to rent a home (those with the highest housing wage) are Hawaii ($31.54), D.C. ($28.25), California ($26.04), Maryland ($24.94) and New Jersey ($24.92).

The five states with the lowest housing wages are South Dakota ($13.09), West Virginia ($12.80), Kentucky ($12.69), Arkansas ($12.56) and Puerto Rico ($10.19). Even in those states, the housing wage is well above the federal minimum wage.

Out of Reach 2014 is the 25th edition of the National Low Income Housing Coalition's annual study.

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