More than one-third of households across the nation live in rental housing. Some households have chosen rental housing due to convenience, cost, or other reasons. Others, particularly lower-income families, live in rental housing because homeownership is out of reach. Affordable rental housing for this population is very important not only for the families themselves but for our communities as a whole.
A housing wage gap exists when median household income differs from the income needed to afford the median rent in a given area. This gap is determined by subracting the income needed to afford the area median rent from renter median income, or: (Renter Median Household Income) - (Income Required to Afford Median Market Rent). A negative gap infers that rental rates are less affordable for the rental population; a positive wage gap infers that shelter costs are affordable.
How is the term Income Required etc. defined? At least since the early 1980s, federal housing authorities have suggested that 30% of a household's income is the threshold under which housing is considered "affordable." This 30%-of-income standard says that non-housing needs, i.e. costs for basic necessities such as clothing, food, and other non-housing monthly bills that do not include gross rent or shelter costs, can be met with 70% of a household's annual income. With median rent data and assuming the rent affordability threshold of 30% of household income, one can arrive at the value of the Income Required term. The calculation is complete with values for renter median income, provided by Census. According to the US Census Bureau, the pandemic made the collection of accurate one-year estimates for the American Community Survey (ACS) impossible in 2020, so those estimates are unavailable.
This indicator measures the Housing Wage Gap in Walla Walla County. Washington State and the U.S. are offered as benchmarks.
