Indicator HH.1.f Housing wage as a percent of minimum wage

Housing wage as percentage of minimum wage, 2009
  2009 Fair market rent (FMR) for 2-bedroom Annual income needed to afford FMR 2008 Housing wage for 2-bedroom FMR 2009 SF minimum hourly wage Housing wage as % of minimum wage (1-worker) Housing wage as % of minimum wage (2-worker)
San Francisco  $ 1,658  $ 66,320  $ 31.88  $ 9.79 326% 163%
2009 Fair market rent (FMR) for 2-bedroom = Fiscal Year 2009 Fair Market Rent (HUD, 2009, http://www.huduser.org/datasets/fmr.html)
Annual income needed to afford FMR = Multiply the FMR for a unit of a particular size by 12 to get the yearly rental cost (2BR: $1,592 x 12 = $19,104). Then divide by .3 to determine the total income needed to afford $19,104 per year in rent ($19,104 / .3 = $63,680)
Housing wage = Divide income needed to afford the FMR for a particular unit size (2BR:$63,680) by 52 (weeks per year), and then divide by 40 (hours per work week) ($63,680 / 52 / 40 = $30.62)
Housing wage as % of minimum wage (1-worker) = Divide the Housing Wage for a particular unit size (2BR: $30.62) by any locality's minimum wage ($9.79), and then multiply by 100 ($30.62 / $9.79 x 100 = 327%) - for two workers, multiple minimum wage by two

Data Source

Housing Wage Calculations: Out of Reach, 2007-2008, National Low Income Housing Coalition. Accessed online at: http://www.nlihc.org/oor/oor2008/

Minimum Wage in SF: Minimum Wage Ordinance. Office of Labor Standards Enforcement. SF City Gov. Accessed online at: http://www.ci.sf.ca.us/site/olse_index.asp?id=27605

Explanation and Limitations

The National Low Income Housing Coalition (NLIHC) calculates the "housing wage" for each county and state. The housing wage is the hourly income of an individual working 40 hours per week for 52 weeks necessary to pay 30 percent of total annual income on housing.

Fair Market Rent (FMR) is a gross rent estimate; it includes shelter rent and the cost of utilities, except telephone. The FMR is an amount calculated by the Department of Housing and Urban Development (HUD) for Section 8 housing assistance. It is set at a level high enough to permit a selection of units and neighborhoods and low enough to serve as many low income families as possible.

The current definition used is the 40th percentile rent, the dollar amount below which 40% of standard quality rental housing units rent.

Housing wage as a percent of minimum wage for a one worker household is calculated by dividing the housing wage for a 2 bedroom FMR by the minimum hourly wage. For a two-worker household, the denominator (minimum wage for one person) is doubled.

Beginning January 1, 2009, all San Francisco employers must pay to each employee who performs work in the City (including temporary and part-time employees) wages not less than $9.79 per hour. In accordance with the SF Minimum Wage Ordinance, the Minimum Wage shall increase by an amount corresponding to the prior year's increase, if any, in the Consumer Price Index for urban wage earners and clerical workers for the San Francisco-Oakland-San Jose, CA metropolitan statistical area.

Why is this a Community Health Indicator?

High housing costs relative to the income of an individual or household result in one or more outcomes with adverse health consequences: spending a high proportion of income on housing, sharing housing with other individuals or families, accepting lower cost substandard housing, moving to where housing costs are lower, or becoming homeless. Spending a high proportion of income on rent or a mortgage means fewer resources for food, heating, transportation, health care, and child care. Sharing housing can mean crowded conditions, with risks for infectious disease, noise, and fires. Lower cost housing is often substandard with exposure to waste and sewage, physical hazards, mold spores, poorly maintained paint, cockroach antigens, old carpeting, inadequate heating and ventilation, exposed heating sources and wiring, and broken windows. Moving away can result in the loss of job, difficult school transitions, and the loss of health protective social networks.

For additional information on the connections between housing and health, visit: The Case for Housing Impacts Assessment by SFDPH, Program on Health Equity and Sustainability. Accessed online on October 19, 2006: http://www.thehdmt.org/etc/004_HIAR-May2004.pdf