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As NJ Rents Continue to Climb, Finding an Apartment Becomes Even Tougher

Hundreds of thousands of residents don’t earn enough to cover the rent on an average two-bedroom, without struggling to pay other bills and meet routine expenses

Apartment

Rental costs rose more than 3 percent in New Jersey over the past year, making the state the sixth most-unaffordable when it comes to renting a typical two-bedroom apartment and prompting advocates to renew calls for the state to take steps to build more affordable housing and increase the minimum wage.

The average two-bedroom rental in the state costs $1,465 a month. In order to reasonably afford that, a person must earn at least $28.17 per hour, according to the annual Out of Reach report released on Wednesday by the National Low Income Housing Coalition and the Housing and Community Development Network of New Jersey. That represents a $45 per month jump in rent and a nearly $1 per hour salary increase to cover the cost in the past year.

More than 450,000 New Jerseyans work in jobs in which the median salary is significantly less than the $58,603 annual wage needed to afford the average two-bedroom rental without spending more than 30 percent of income on housing, according to data from the network. These include a wide range of occupations — among them, cashiers, nursing assistants, security guards, preschool teachers, and accounting clerks.

Those earning the state’s median renter wage of $18.21 cannot even reasonably afford a studio apartment, which costs on average $1,040 per month and needs a $20 per hour wage to support it without straining the budget.

No help from minimum wage

Efforts to increase the state’s minimum wage from $8.60 an hour to $15, which was a major campaign promise made by Gov. Phil Murphy, currently are stalled, even though both houses of the Legislature passed a bill to do just that two years ago, and Sen. President Stephen Sweeney (D-Gloucester) was one of its sponsors. Former Gov. Chris Christie vetoed that bill (A-15), in September 2016 to immediately increase the minimum wage to $10.10 and bring it up to $15 by 2021.

While someone earning $15 an hour still would not be able to afford the typical two-bedroom apartment, or even a studio apartment with an average monthly rent of $1,040, such an increase would likely have a ripple effect that would lead to wage increases for others making more than the minimum in other low-wage jobs.

Among other advocacy groups, the Poor People’s Campaign, has been holding rallies and other actions for the past five weeks in an effort to get lawmakers to pass a living wage and take other steps to reduce poverty. Dozens of participants have been arrested and hundreds have rallied in the state as part of this campaign.

Nowhere to call home

Low salaries are only part of the problem, though. The other is the lack of affordable homes.

After more than a decade of inaction by the state to promote the widespread construction of low-income housing, more than 200 municipalities have reached court settlements to at least zone for and in some cases have started to build affordable homes to fulfill their obligations under the Supreme Court’s Mount Laurel doctrine. That doctrine, in the form of a series of rulings, holds that all communities must provide their fair share of homes for those of limited means.

Last March, a state Superior Court judge overseeing two Mercer County housing cases calculated that New Jersey needs to build close to 155,000 affordable units through 2025.

Christie was no fan of the Mount Laurel mandates and used $306 million earmarked for affordable housing construction for other purposes. While candidate Murphy criticized Christie and pledged to stop those diversions, Gov. Phil Murphy is raiding nearly $80 million from two funds meant for affordable housing to pay for other programs. Lt. Gov. Sheila Oliver, who is also the director of the department responsible for affordable-housing programs, defended the administration’s actions at a budget hearing last month and said the diversions are necessary due to budget constraints.

Putting the money to work

Advocates said the Out of Reach report re-emphasizes the critical need for the state to use its trust funds to build more homes where New Jersey workers can afford to live.

“Despite New Jersey’s housing-affordability crisis, resources intended to alleviate the problem continue to be diverted,” said Staci Berger, president and chief executive officer of the network. “The proposed state budget once again siphons the Affordable Housing Trust Fund, which is legally intended for the creation of affordable homes.”

Earlier this month, a Rutgers-Eagleton Poll found that 86 percent of residents consider the cost of housing to be a serious problem in the state, and almost 80 percent said the state should not use the trust fund money for other purposes.

The high cost of rentals is a problem that affects a large proportion of the state’s population. More than 1.1 million New Jerseyans, or about 36 percent of all residents, are renters, and their ranks are growing as more people are choosing to live in apartments in the cities and smaller urban areas.

According to the report, a resident earning the median renter wage would need to work 62 hours a week to afford a two-bedroom apartment. Someone earning the minimum wage would have to work 131 hours per week, or 3.3 full-time jobs, to afford the same unit.

Some parts of the state are more expensive than others. Bergen County is the most costly, with a two-bedroom rent averaging $1,691 per month. The most reasonable rents are in Cape May County, where a two-bedroom rents for $1,127 per month.

NJ has plenty of company

The problem is not unique to New Jersey, which ranked as the sixth-most expensive state last year behind California, New York, Maryland, Massachusetts, and Hawaii, where the average two-bedroom rents for $1,879 and demands a housing wage of $36.13 an hour to be affordable.

“The housing crisis has reached historic heights, most negatively impacting the lowest income renters,” said Diane Yentel, president and CEO of the National Low Income Housing Coalition. “The struggle to afford modest rental homes is not limited to minimum-wage workers. Too often, a low-wage worker must choose between paying for rent, healthcare, childcare, and other basic necessities.”

The housing problem is only going to get worse without action. Yentel said that seven out of 10 of the jobs projected for the greatest growth over the next decade have wages that are too low to reasonably cover the cost of a one-bedroom apartment.

She called on Congress to “invest in expanding housing solutions that provide stable homes for the lowest income people in our country.”

>>
CountyRenter households Avg renter wage1-bedroom rentWage for 1-bedroom2-bedroom rentWage for 2-bedroom
New Jersey1,147,220$18.21$1,199$23.05$1,465$28.17
Atlantic 33,290$11.27$1,020$19.62$1,312$25.23
Bergen 119,028$19.15$1,439$27.67$1,691$32.52
Burlington 38,957$16.35$1,047$20.13$1,266$24.35
Camden 60,995$12.56$1,047$20.13$1,266$24.35
Cape May 9,468$8.79$930$17.88$1,127$21.67
Cumberland 18,086$11.20$873$16.79$1,155$22.21
Essex 156,180$19.45$1,082$20.81$1,314$25.27
Gloucester 21,617$10.12$1,047$20.13$1,266$24.35
Hudson 174,234$29.70$1,351$25.98$1,614$31.04
Hunterdon 7,813$14.67$1,268$24.38$1,627$31.29
Mercer 46,728$17.88$1,072$20.62$1,329$25.56
Middlesex 102,485$20.35$1,268$24.38$1,627$31.29
Monmouth 61,195$12.12$1,126$21.65$1,461$28.10
Morris 44,365$23.81$1,082$20.81$1,314$25.27
Ocean 44,233$12.01$1,126$21.65$1,461$28.10
Passaic 75,625$14.00$1,439$27.67$1,691$32.52
Salem 6,996$14.11$1,047$20.13$1,266$24.35
Somerset 28,199$25.20$1,268$24.38$1,627$31.29
Sussex 9,174$10.34$1,082$20.81$1,314$25.27
Union 76,959$19.69$1,082$20.81$1,314$25.27
Warren 11,593$13.35$1,020$19.62$1,228$23.62

Notes: The rents are median fair market rents; the wages for each unit represent the amount needed to pay rent without exceeding 30 percent of income.
Source: Housing and Community Development Network of NJ.

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