Hawaii has highest gap between wages, rent required for a 2-bedroom

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HONOLULU — It’s no surprise that rent in Hawaii is higher than in most other states in the nation.

Hawaii’s rent is so high, though, it is inaccessible to the majority of residents working in the state’s largest occupations, according to the 2019 report by the National Low Income Housing Coalition, a Washington, D.C.-based advocacy group for affordable housing.

Hawaii is not only the most expensive state for two-bedroom renters to live in, according to the recently released report, but holds the distinction of having the greatest gap between what the average renter makes and what a tenant needs to occupy a two-bedroom unit at fair-market rent.

A renter in Hawaii needs to make at least $36.82 per hour, or $76,577 annually, to afford a two-bedroom residence at $1,914 a month, according to the report. The average renter in the state, however, only makes $16.68 per hour — a gap of $20 an hour.

The prospects are no better for a more modest one-bedroom rental.

To rent a one-bedroom unit in the state for $1,458 a month, a renter would need to make at least $28.04 per hour, or $58,316 annually.

At the state’s minimum wage of $10.10 per hour, a Hawaii renter would have to work 111 hours per week, or work 2.8 jobs, in order to afford a one-bedroom residence, according to the coalition. To afford rent for a two-bedroom unit at minimum wage, a renter would need to work 146 hours per week, or work 3.6 jobs.

The median wages for some of the largest occupations in the state, including fast-food prep workers, cooks, cashiers, home health aides, retail salespersons and teacher assistants, hover between about $11.50 and $15 per hour — far below what is needed to rent a one-bedroom place.

Approximately 42% of Hawaii’s residents are renters.

Nicole Woo, senior policy analyst for Hawaii Appleseed, said Hawaii has been at the top of the Out of Reach Report for many years, with a higher percentage of renters than the national average.

“We have very high housing costs,” said Woo. “We have the most overcrowded housing according to U.S. Census data, the highest homeless rate in the nation. That’s all connected to (the fact) that our housing is so expensive.”

She noted the Hawaii Legislature’s failure to raise the minimum wage to $15 an hour in this year’s session, as several other states have done, which exacerbated the problem.

The most expensive areas to live in Hawaii are urban Honolulu, followed by Maui County and Kauai County.

In urban Honolulu, a renter needs to make $39.75 per hour to afford a two-bedroom unit. In Maui County, a renter needs to make $32.21 per hour and in Kauai County, $29.44 an hour. In Hawaii County, the figure is $25.88 an hour.

Hawaii, however, is not alone in this gap between wages and rent, according to the coalition.

Every county, metropolitan area and state across the country has the same gap between what a worker can earn based on the prevailing state or federal minimum wage during a standard, 40-hour work week, and fair market rent for a two-bedroom.

Nationally, a full-time worker needs to earn an hourly wage of $22.96, on average, to afford a two-bedroom rental in the U.S., $15.71 higher than the federal minimum wage of $7.25.

Hawaii was the most expensive state to rent a two-bedroom, followed by California, Massachusetts, New York and New Jersey.

By metropolitan area, however, San Francisco was the most expensive, requiring housing wages of $60.96 per hour to rent a two-bedroom. Some areas of Kentucky have the lowest housing wages, at $11.88 per hour, for a two-bedroom rental.

For the report, the housing wages and fair market rental rates were based on numbers from U.S. Department of Housing and Urban Development. The housing wages were calculated as the estimated full-time, hourly wage a household must earn to afford a rental home at fair market rent, while spending no more than 30% of it on housing costs.