The Average Renter Can't Afford A Chicago-Area Two-Bedroom, Study Says
What does it take to comfortably rent a two-bedroom apartment in Chicago? An income of $47K, according to a study released Wednesday by the National Low Income Housing Coalition (NLIHC). In other words, the rent is too damn high. The coalition's study, titled "Out of Reach 2016," persuasively argues that—per its title—affording a two-bedroom apartment in the Chicago area is out of reach for many, many renters.
The fair market rate for a "modest" two-bedroom apartment in the Chicago area (which includes Naperville and Joliet) is $1,176, according to estimates the study pulled from the U.S. Department of Housing and Urban Development (HUD). To afford that, workers need to make $22.62 an hour (or $47,040 annually), but a Chicago area renter makes, on average, $17.03 an hour.
Chicago minimum wage, meanwhile, is $10 an hour (though it rises to $10.50 on July 1). A minimum wage worker would have to work 2.7 full-time jobs, or 108 hours a week, to afford a Chicago area two-bedroom.
"Affording an apartment," by the study's definition, means spending less than 30 percent of income on rent and utilities. The study's wage calculations are based on an assumed 40-hour work week, 52 weeks a year.
One-bedrooms, obviously, are more manageable than two-bedrooms. The wage required to afford the fair market rate for a Chicago area one-bedroom is $19.25, according to the study, which is much closer to what the average Chicago area renter makes. However, the study focuses particularly on the needs of families—hence its laser focus on two-bedroom units.
There are various reasons this study's results could be slightly off. For one, measuring affordability by the average renter wage, rather than the median, allows the ultra-high-wage renters planning to live in say, Vista, to skew the average upwards. For another, though the study focuses on families, it measures affordability by assuming just one working parent per household—overstating the direness of the rental market for households with two working parents.
However, it's hard to argue with the study's core argument. Rents are definitely spiking in Chicago, and lower-income renters are bearing the brunt of the change. NLIHC might even be underselling the problem. According to another recent rent study from personal finance site SmartAsset, the income required to comfortably rent a Chicago two-bed is $76K, almost twice the NLIHC estimate.