California livin' is expensive for those making minimum wage. Very expensive.
The National Low Income Housing Coalition (NLIHC) released the 2017 "Out of Reach" report and found, a person making the $10.50/hour state minimum wage would have to work 92 hours per week to afford a one-bedroom rental at Fair Market Rent (FMR), without paying more than 30 percent of their income on housing.
At that rate, a person would have to work two full-time minimum wage jobs and at least one part-time job to afford a one-bedroom rental, which in California costs on average about $1,261.
Realistically, affordable rent for a minimum wage worker is $546 a month, according to the NLIHC. A worker earning average rent in California is paying $1,074, which translates to working at $20.66/hour, double the amount of minimum wage.
A two-bedroom rental has a median price of $1,608 at fair market, so a person making minimum wage would need to work 118 hours a week and work three jobs to afford to live.
Steep rental prices are now the norm in Sacramento. A Redfin report released last month found the Sacramento region is the number-one choice for people looking to move from their home metro city, to another big city. The majority of people looking to move to the region are from the Bay Area and are searching for more affordable living.
Although Bay Area transplants are often blamed for rising rent prices in the Sacramento region, the big reason for the rental market change is due to supply and demand. Sacramento is not building enough housing units for the influx of people moving into the area. Sacramento is the fastest growing large city in the state, according to the California Department of Finance.
In May, the average price for a one-bedroom rental in the Sacramento area was $1,116 while a two-bedroom cost $1,180, according to Yardi Matrix.
The median income in Sacramento, Placer, and Yolo counties is $75,000. With a median salary, a person in Sacramento can afford paying $1,880 in rent, according to the NLIHC.
However, the estimated average hourly renter rate in Sacramento for 2017 is $15.86, which is roughly about $30,500 a year, for a full-time job. Affordable prices for the average renter in Sacramento is $825 a month, much lower than the average rent price in the area.
Keep in mind, $15.86 is still about $5 more an hour than the minimum wage. A person making minimum wage in Sacramento wouldn't be able to pay the average rent of $1,116 to $1.180. In fact, they couldn't even afford to pay half the cost of the average rent.
Click HERE to see the two-bedroom housing wage in Sacramento by zip code.
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