The best (and worst) cities for renters making minimum wage

These are the 10 most (and least) affordable U.S. cities for renters making minimum wage.

Nov 12, 2024 - 09:00

The best (and worst) cities for renters making minimum wage

(NewsNation) — Minimum wage won't cover the cost of a typical one-bedroom anywhere in the country, but some major cities are better for low-income workers than others.

A recent study by Clever, a real estate consultancy, found that Buffalo, New York, is the cheapest option for renters making the local minimum wage, though it's still considered unaffordable.

Minimum-wage workers in Buffalo can expect to pay 39% of their income for a typical one-bedroom unit. That's the lowest rent-to-income ratio of any major city in the country but still higher than the common affordability threshold of 30%.

Only two other cities in Clever's analysis — St. Louis, Missouri, and Hartford, Connecticut — had rent-to-income ratios under 50%, which is the percentage of a person's gross monthly income that goes toward rent.

Midwestern cities like Minneapolis, Cincinnati, Cleveland and Kansas City also ranked near the top for affordability. All of the cities at the top of the list had minimum wages that were higher than the federal minimum of $7.25 an hour.

Meanwhile, low-paid workers in Atlanta face the most significant challenges. A typical one-bedroom costs 132% of a minimum wage worker's monthly income. In other words, a worker would have to make almost $32 an hour to afford the typical one-bedroom — more than four times the current minimum wage.

Other southern cities, like Nashville, Charlotte, Dallas and Raleigh, were also near the bottom of the list. Much of that is because the minimum wage in those places is $7.25 per hour.

Clever put their findings like this: "Even if every metro in the nation increased the minimum wage by $10 per hour, a single minimum-wage worker could only affordably rent a one-bedroom apartment in five of the 50 largest cities."

The affordability situation isn't much better for couples and roommates. A pair of full-time workers making minimum wage could only afford to rent a one-bedroom apartment in nine of the 50 U.S. metros studied, the report found.

San Jose, California — one of the most expensive areas for housing — has the widest gap between the local minimum wage and the amount needed to affordably rent a one-bedroom unit. The minimum wage ($17.55 an hour) and the hourly income required for a one-bedroom ($57.21) are roughly $40 per hour apart.

The federal minimum wage of $7.25 an hour hasn't changed since 2009, although the share of workers making that amount has steadily fallen over time. In 2023, 1.1% of hourly paid workers had wages at or below the federal minimum.

American workers have seen their paychecks grow since the pandemic, but in most cities, those gains haven't kept up with rent prices. Between 2019 and 2023, rents surged 30.4% nationwide while wages rose 20.2% over the same period, according to a recent analysis by Zillow and StreetEasy.

Clever's findings are based on an analysis of federal and local housing and wage data.

The ten most affordable U.S. cities for renters making minimum wage, according to Clever.

Percentage reflects the share of income required for a typical one-bedroom.