You might need 3 roommates to afford a North Texas apartment, study says
FORT WORTH, Texas (CBSDFW.COM) — A new study conducted by a popular real estate website has found that the five biggest cities in Texas are among the least affordable in the country for renters making minimum wage.
Online real estate platform Zillow analyzed the 50 largest cities in the U.S. and compared local minimum wages to rent price increases to find out how many jobs or roommates it would take to afford a one-bedroom or two-bedroom apartment if no more than 30% of household income per month is spent on rent. In each case, they found all five of the largest cities in the state - including two in North Texas - were among the least affordable in the nation for minimum wage workers.
For a one-bedroom apartment, all fell in the top ten least affordable for minimum wage workers in the U.S. Dallas ranked sixth with an average of 3.3 full-time minimum wage jobs needed to afford a month's rent. Fort Worth was close behind with an average of 3.1. Austin was the second worst in the country, falling just under Atlanta with an average of 4.0. San Antonio was ranked eighth with an average of 3.1 and Houston ninth with an average of 3.0. With the exception of Austin, all five Texas cities fell at or below the U.S. average of 3.3.
When considering two-bedroom apartments, however, one city managed to fall just shy of the top ten. Dallas rose to number five with an average of 4.1 while Fort Worth was a distant ninth with an average of 3.8. San Antonio was slightly more expensive than Fort Worth and ranked eighth, also with an average of 3.8. Austin was found to be the most expensive, with an average of 5.1 minimum wage jobs needed to pay for a two-bedroom. Houston was the only Texas city to escape the top ten, falling in 11th place with an average of 3.6. The U.S. average was found to be 3.8 - between San Antonio and Fort Worth.
Although these numbers are high, Zillow notes that only 10 cities required on average two or fewer minimum wage workers to afford a two-bedroom apartment. In none of the cities analyzed was a single minimum wage worker able to afford a one-bedroom.
CITIES AT FEDERAL MINIMUM WAGE FARE WORSE ON AVERAGE
Zillow's analysis noted that overall, cities with minimum wages over the federal minimum of $7.25 tended to fare better than those with higher wages. On average, 2.5 full-time workers were needed to afford a two-bedroom rental in cities with minimum wages higher than $7.25 per hour compared to 3.5 in cities at federal minimum despite lower average rent prices.
Under state law, Texas follows the federal minimum wage.
Of course, a higher minimum wage alone isn't a guarantee that works will be able to easily afford rent. In San Francisco, where the minimum is $16.99 an hour, a worker would need to make almost three times that amount to afford a one-bedroom on their own. In Seattle and Denver, where minimum wages are $18.69 and $17.29 respectively, an average one-bedroom costs about twice as much according to Zillow.
Still, the trends are clear. For both one- and two-bedroom rentals, none of the 20 most affordable cities have a $7.25 per hour minimum wage.
Zillow said that it's important to also consider basic supply and demand, which they claim is the primary driver of growing housing costs. Building more homes is one possible solution to the problem, but Zillow notes that "even modest densification measures — such as allowing two units of housing on a fraction of single-family lots in large metros — could add 3.3 million homes and meaningfully slow housing price growth over the long term."
There are some important shortcomings of the study to consider, however. For one, few jobs in Texas actually pay the bare minimum wage. According to the online jobs board ZipRecruiter, the average hourly rate in Texas based on employer job postings and third-party data as of Feb. 2, 2023 is $23.11 - just over three times the federal minimum.
Using average rather than minimum wage numbers might more accurately reflect the actual state of rentals in Texas.
