The minimum wage in Chicago is still not enough for many people to afford rental housing in 2023, a new report from Housing Action Illinois and the National Low Income Housing Coalition says.
In the Chicago metro area, which has the most expensive housing in the state, a person would need to earn $27.69 an hour working 40 hours a week, or about $57,600 a year, to afford a two-bedroom apartment, or work 85 hours a week if they make minimum wage. To afford a one-bedroom, they would need to earn $24.13 an hour or work 74 hours a week at minimum wage, the report released Wednesday found.
The minimum hourly wage in Chicago increases every year and is set to go up another 40 cents July 1 — reaching $15.80 for non-tipped workers at the city’s largest employers — an amount that will help but not solve housing affordability issues, advocates say.
The new estimates come at a time when housing advocates are anticipating reduced support for federally funded housing programs next year, stemming from the debt ceiling deal between Congress and President Joe Biden. And while the rental market is stabilizing nationally after skyrocketing price increases in 2021 and 2022, Chicago’s rental market is seeing some of the fastest price increases in the U.S.
“The debt ceiling deal is extremely damaging for federally funded housing programs, such as Housing Choice Vouchers, public housing and Homeless Assistance Grants,” said Bob Palmer, policy director for Housing Action Illinois. “Because the cost of providing housing in the private market has continued to go up, the spending caps that were part of the agreement to suspend the debt ceiling have the impact of a budget cut, reducing the number of people receiving assistance to help pay for a home.”
The U.S. Department of Housing and Urban Development declined to comment.
Chicago Housing Authority spokesperson Matthew Aguilar told the Tribune that CHA doesn’t think the debt ceiling agreement will affect the agency at this time.
“That being said, we recognize that the demand for affordable housing in Chicago consistently exceeds the amount of resources that CHA and other agencies can provide due to the already limited federal funding,” Aguilar said in a statement. “This problem is not unique to Chicago, and we join other affordable housing providers, advocates, and industry groups nationwide in calling for more resources from the federal level.”
The study bases apartment costs on fair market rent values, a HUD standard that represents the cost to rent a moderately priced unit in the local housing market. The average fair market values of one-bedroom and two-bedroom apartments in Chicago are $1,255 and $1,440, respectively.
Beyond the Chicago area, much of the state is more affordable, except for the central Illinois metro area and the area of southern Illinois near St. Louis.. The lowest hourly wage needed for an Illinois worker to afford a two-bedroom apartment in some counties is $14.88. With the Illinois minimum wage at $13 an hour, full-time workers can afford one-bedroom apartments in much of the state.
Housing is considered affordable if an individual spends no more than 30% of their income on rent.
Nationally, the study finds that millions of people cannot afford rental housing, with people of color being disproportionately affected because they are more likely to be renters and have low incomes compared with white households.
The most expensive jurisdictions are the Boston, Seattle and New York City metropolitan areas, as well as parts of California and one part of Connecticut.
Palmer said the country needs more public investment in affordable housing.
“Obviously, it’s not a new problem, but the cost of housing in the private market continues to go up, and it is most out of reach for people with the lowest incomes,” Palmer said. “We need to be increasing people’s incomes, but we also need to be increasing the supply of housing.”