The latest edition of the annual report on rental housing affordability from the National Low Income Housing Coalition and the Vermont Affordable Housing Coalition has found that Vermont has one of the highest gaps in the nation between the cost of rent and renter wages. Out of Reach: The High Cost of Housing reports that for a Vermont renter to be able to afford a modest two bedroom apartment, he or she would need to earn $22.40 per hour, well above the average renter wage.
This estimate is known as the Housing Wage. The Housing Wage is the hourly wage a household must earn while working 40 hours a week to be able to rent an apartment at HUD's Fair Market Rent and pay no more than 30% of its income towards housing costs including utilities. In Vermont, Fair Market Rent is $1,165 for a two bedroom apartment. When households pay more than 30% of their income on rent, it can be difficult to afford other basic necessities such as food, transportation, and healthcare.
To afford a two bedroom apartment at Fair Market Rent, a Vermont renter would need to earn $22.40 per hour, or about $46,600 annually. Some areas of Vermont are even less affordable, with Chittenden County’s Housing Wage at $27.32 per hour. For context, Vermont minimum wage is $10.50 per hour, with the average Vermont renter earning just $12.85 per hour. This means that thousands of working Vermont households are struggling to find decent, affordable apartments.
Although this problem is widespread throughout the country, Vermont’s affordability gap is particularly severe. The $9.55 gap between the two bedroom Housing Wage in Vermont and the average renter wage is the 5th highest in the nation, higher than in Massachusetts, Connecticut, Maine, and New Hampshire. As in other states, Vermont’s lack of affordable rental housing is driven by a lack of existing rental housing stock and limited new development of non-luxury properties.
Vermont Senator Bernie Sanders, who wrote the preface to the report, argued that, “The affordable housing crisis demands that we think big and act boldly. We must make a historic and sustained commitment to ensure that every family has an affordable place to live and thrive. This starts with significantly expanding federal investments in affordable housing through programs like the National Housing Trust Fund, the HOME program and other critically important resources.”
For more information, read the Vermont Affordable Housing Coalition’s (VAHC) analysis.