In the San Francisco metropolitan area, a household would need to make $126,480 per year to afford the median market-rate rental without spending more than 30 percent of income on housing, according to a new report by real estate website Zillow. That works out to a $63.24-per-hour wage for a single-earner household, or $31.62 for a dual-earner household. Not one single part of the Bay Area has a median market-rate rent that is affordable to a worker making the current California minimum wage of $9 per hour or the San Francisco minimum wage of $12.25 per hour (or the $15 per hour going into effect in SF in 2018). In San Francisco itself, single earners need to bring home $84.50 per hour, or $175,760, to afford the city's median market-rate rent, and each member of a dual-earner household would need to earn $42.25 an hour per person.
The cheapest place in the San Francisco metropolitan area is Pittsburg, where the minimum hourly wage necessary for two earners is $18.14 (per earner), or $36.28 for a single earner. And although San Francisco is pricey, there are plenty of even more expensive areas around Marin and San Mateo counties. Atherton comes out on top, with a whopping $103.80 per hour, per earner, for a household of two workers to afford the median rental (which in Atherton at least is a largely theoretical notion, because the town isn't exactly swimming in apartment complexes; rather, Zillow's estimated market-rate rent is based on what an Atherton house would rent for, if it were on the rental market). Belvedere, Hillsborough, and Portola Valley are close behind.
The Bay Area is undoubtedly expensive and very, very difficult for anyone who isn't making quite a bit of money to afford. That said, matching up minimum wages and median rentals seems a bit like stacking the statistical deck. By definition, a minimum-wage salary should not be expected to support a median rental, even in a more affordable city, unless a huge proportion of the city's workers are earning the minimum wage. But in other American cities, it is undoubtedly easier to afford the median level of housing on far fewer dollars than it is here in the San Francisco area. In Chicago, where the minimum wage will increase to $10 next month, a two-earner household would have to make $16.10 per hour per person to afford the median rental, and in Los Angeles the earning level would be $24.98 per hour for two ($49.96 per hour for one).
The figures above are all based on estimated market-rate rents from the Zillow Rent Index, which, as we have recently discussed, is an imperfect approximation of the current state of the rental market (and does not factor in rent control, for instance). Because the full picture of data on apartment rentals is not publicly available, Zillow estimates market-rate rent for the portion of the housing stock it can assess as a whole: single-family homes, condos, co-ops, and TICs. (If this sounds confusing, definitely read our explainer on the matter.) What Zillow's rent index does provide is a snapshot of how the market is changing, and there is no question that it is getting more expensive to live here. The last time that Zillow calculated these figures, in December 2014, someone living in San Francisco needed to make $152,960 per year to afford the median market-rate rental. Given that lots of San Franciscans have probably not received a $22,800 raise in six months, the city's current rents are affordable to even fewer people than they were at the end of last year.
· In Most Large Markets, Even $15 Minimum Wage Wouldn't Help Renters Much [Zillow Blog]
· Minimum Wage Ordinance (MWO) [Office of Labor Standards Enforcement]
· Is San Francisco's Median Rent of $4,225 For Real? Yes and No [Curbed SF]
· To Afford a Median Apartment, SF Renters Would Need to Make 7 Times the Minimum Wage [Curbed SF]