Rental costs rose more than 3 percent in New Jersey over the last year, making the state the sixth most unaffordable when it comes to renting a typical two-bedroom apartment and prompting advocates to renew calls for the state to take steps to build more affordable housing and increase the minimum wage.
The average two-bedroom rental in the state costs $1,465 a month. To reasonably afford that, a person must earn at least $28.17 an hour, according to the annual “Out of Reach” report, released June 13 by the National Low Income Housing Coalition and the Housing and Community Development Network of New Jersey. That represents a $45-a-month jump in rent and a nearly $1-an-hour salary increase to cover the cost in the past year.
More than 450,000 New Jerseyans work in jobs in which the median salary is significantly less than the $58,603 annual wage needed to afford the average two-bedroom rental without spending more than 30 percent of income on housing, according to data from the network. These include a wide range of occupations — among them, cashiers, nursing assistants, security guards, preschool teachers, and accounting clerks.
Those earning the state’s median renter wage of $18.21 cannot even reasonably afford a studio apartment, which costs on average $1,040 a month and needs a $20-an-hour wage to support it without straining the budget.
Efforts to increase the state’s minimum wage from $8.60 an hour to $15, which was a major campaign promise made by Gov. Murphy, currently are stalled, even though both houses of the Legislature passed a bill to do just that two years ago.
Although someone earning $15 an hour still would not be able to afford the typical two-bedroom apartment, or even a studio apartment with an average monthly rent of $1,040, such an increase would likely have a ripple effect that would lead to wage increases for others making more than the minimum in other low-wage jobs.
Low salaries are only part of the problem, though. The other is the lack of affordable homes.
After more than a decade of inaction by the state to promote the widespread construction of low-income housing, more than 200 municipalities have reached court settlements to at least zone for and in some cases have started to build affordable homes to fulfill their obligations under the state Supreme Court’s Mount Laurel doctrine. That doctrine, in the form of a series of rulings, holds that all communities must provide their fair share of homes for those of limited means.
Last March, a state Superior Court judge overseeing two Mercer County housing cases calculated that New Jersey needs to build close to 155,000 affordable units through 2025.
Advocates said the Out of Reach report reemphasizes the critical need for the state to use its trust funds to build more homes where New Jersey workers can afford to live.
“Despite New Jersey’s housing-affordability crisis, resources intended to alleviate the problem continue to be diverted,” said Staci Berger, president and chief executive officer of the network. “The proposed state budget once again siphons the Affordable Housing Trust Fund, which is legally intended for the creation of affordable homes.”
The high cost of rentals is a problem that affects a large proportion of the state’s population. More than 1.1 million New Jerseyans, or about 36 percent of all residents, are renters, and their ranks are growing as more people are choosing to live in apartments.
According to the report, a resident earning the median renter wage would need to work 62 hours a week to afford a two-bedroom apartment. Someone earning the minimum wage would have to work 131 hours per week, or 3.3 full-time jobs, to afford the same unit.
Some parts of the state are more expensive than others. Bergen County is the most costly, with a two-bedroom rent averaging $1,691 a month. The most reasonable rents are in Cape May County, where a two-bedroom rents for $1,127 a month.
The problem is not unique to New Jersey, which ranked as the sixth-most expensive state last year behind California, New York, Maryland, Massachusetts, and Hawaii, where the average two-bedroom rents for $1,879 and demands a housing wage of $36.13 an hour to be affordable.
In Pennsylvania, rent for a two-bedroom averages $1,015 and requires a housing wage of $19.53 an hour to be affordable. The Philadelphia area is more expensive, with a $1,266 rent average, requiring a $24.35 hourly wage.