To rent an average one-bedroom apartment with utilities affordably in the Columbia metro area, a person would have to earn more than $12 an hour in a 40-hour work week or work 70 hours a week earning minimum wage of $7.25 an hour.
Those facts are gleaned from the latest fair market rent values determined by the U.S. Department of Housing and Urban Development for fiscal year 2015, which are an important factor in determining government rent assistance for low-income people and bring an interesting angle to continuing debates on minimum wage, affordable housing advocates say.
Fair market rents in the Columbia metropolitan statistical area – which includes Calhoun, Fairfield, Kershaw, Lexington, Richland and Saluda counties – dropped not quite 2 percent from the previous year, with 40 percent of rents costing at or below these thresholds, which include the cost of utilities:
• For an efficiency unit: $605
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• One-bedroom unit: $656
• Two-bedroom unit: $778
• Three-bedroom unit: $1,026
• Four-bedroom unit: $1,301
Actual average rents in the city of Columbia itself – a narrower submarket – run slightly higher at about $675 for one-bedroom units and $800 for two bedrooms, according to data supplied to the Central Midlands Council of Governments by the independent Real Data Apartment Index.
“There needs to be more affordable housing,” said Nancy Stoudenmire, director of the Columbia Housing Authority, which provides Section 8 rent assistance to more than 13,000 people through a number of programs in Richland County. “You know, it’s great that we’ve got all this student housing going up all over Columbia ... but the thing is, that pushes the rents up.”
Twenty years ago, the fair market rent for a one-bedroom unit in the Columbia area was $425, $489 for a two-bedroom unit, $646 for three bedrooms and $743 for four.
“It just seems every year for me it gets worse,” Stoudenmire said. “I’m getting less and less available housing.”
Fair market rent costs highlight the hardship of living off minimum wage for low-income individuals and families. For a single person in Columbia, the discrepancy between minimum wage and what’s known as a living wage, or the hourly rate a person must earn to support the local cost of living, is about $2 an hour.
Without assistance, a single minimum wage worker paying the rent alone and spending the standard 30 percent of his income on housing couldn’t afford any of the average rents in the Columbia area. And even two people each earning minimum wage couldn’t together afford an average two-, three- or four-bedroom unit by themselves.
“It obviously reflects that it’s very difficult to live on minimum wage, whether you’re an individual or family,” said Frank Knapp, president and CEO of the South Carolina Small Business Chamber of Commerce, which advocates raising the federal minimum wage to $10.10 an hour from $7.25.
“If you’re spending a greater percentage of your take-home pay on housing – nobody’s working 80 hours a week – then there’s no money leftover for another type of spending,” Knapp said. “There’s no money to go shopping. There’s no money to invest back in the economy. That’s all going to housing, and the majority of what’s left is going to transportation and food.”
Raising the minimum wage not only is good for people with low income, Knapp said, but for the economy as a whole.
Knapp’s chamber, though, differs from other economic advocacy organizations in its support of raising the minimum wage. That’s not the solution to affordable housing, says the Greater Columbia Chamber of Commerce.
“As with any growing city, Columbia needs to be sensitive to the cost of living and how it relates to affordable housing,” Columbia Chamber spokeswoman Anna Burns said in an email. “However, raising minimum wage has been proven to stifle economic growth in other markets around the country. Our goal is to create and maintain a business environment where jobs are created and businesses can flourish throughout the Midlands.”
Fair market rent values help the housing authority determine how much aid it can give and to how many people. But fair market rent values also come with some problems, Stoudenmire said.
One issue is that fair market rent values include the presumed cost of utilities, so the actual rent threshold per unit may be lower than the calculated amounts, Stoudenmire said. With utility costs generally on the rise, finding apartments that fall below fair market rent thresholds can be difficult. For a one-bedroom unit, Stoudenmire said the more realistic rent estimate minus utilities is between $500 and $525.
“In downtown Columbia, there’s no way. You can’t find units for $500 a month, especially along a bus line,” she said.
And when there are units renting at or below those prices, finding the unoccupied ones is still the problem, Stoudenmire said. Only about 8 percent of rental units in the Columbia area are vacant, according to the Real Data Apartment Index.
Stoudenmire said among those seeking rent assistance, she has seen an increase in the number of elderly people, thanks to the overall aging population, and disabled people of all ages.