The issue.

Rent in the United States has more than tripled in the last 20 years, while Federal Minimum Wage has only increased by $2.10. The valuation of what a property is worth and the subsequent rent calculations are so vastly under regulated it should be criminal.

Rent in many places goes up every year. Or, if there is a change to the State or Federal Minimum Wages, the renewal of a lease is always right around the corner to absorb the difference, leaving people in the same situation they were in before, if not worse.

Who is impacted?

Every Renter in the United States is impacted. As an example, I will do some math of the income to rent ratio of a California resident. As of now, the State Minimum Wage of California is $16 an hour. Working a full time job, without overtime (40 hours a week), that equates to $2,560 a month, post tax take home is $2,312.

Average rent costs in California, according to Rental Real Estate's website are $2,345 a month. That is a rate of 101.4%. The rest of the Country is not that far off, varying by 10-20% up or down. A far reach from Economists and Schools teaching that rent should be "around" 30% of your income.

This same issue applies to potential home buyers. A 30 year mortgage on an "average" priced home in the US at $387,600 is $1,076 a month before a calculation on interest. With the current US average interest rate on a home purchase with a 740 credit score, at 7.73%, makes a monthly mortgage payment of $2,771. Using the same calculation against the aforementioned income, that is a spend to income ratio of 119.85%.

This means that with the average national mortgage prices, a prospective home buyer would need an income of $9,236.67 monthly, or make $57.73 an hour for that to be 30% of the home buyer's income. For a California renter, their income would have to be 7,816.66 to reach the same 30%.

What is at Stake?

The wellbeing of every renter and would be home buyer in the nation are sitting on a razor's edge. Homelessness has exploded, because it is more reasonable an option for an ever growing part of the population to sleep in a car or tent, so they can have food to eat than it is to starve in a house they cannot afford.

The US Constitution states "We hold these Truths to be self-evident, that all Men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty, and the pursuit of happiness".

The right to Life is in the decline as much of the population is forced to bargain between bills and healthy food, if not meals in general. Many people, have to skip meals to make the balance between cost and surviving. We know this with the epidemic of hungry children, where many are only able to eat food at School, if available. People have lower quality of life because they cannot afford to care for themselves the way they should.

The pursuit of happiness is also another large factor. Restricting renters and perspective home buyers to abandon the thought of home ownership. The ability to do anything in their lives outside of working and returning to a home that is substandard for living, trying to figure out their next meal, or ability to do anything recreationally outside of staring at a television.

These oppressive financial strains placed on so many people in the US are destroying not only the wellbeing of the Nation, they are a major factor in the US economy. With little to no money available beyond paying rent/mortgage, utilities and food, there is very little left for anything else. The media reports constantly on the slow incline on consumer spending. Despite the increase of population in the US, the rate of spending is still much slower than expected. This is an issue that is devastating the small business sector. While large corporations have access to billions of dollars to "weather the storm" and conduct layoffs to show a slightly larger profit margin to their shareholders, small businesses fail. Within the same issue, people lose their jobs and have even less ability to sustain themselves in an already difficult market.

Why is now the time to act?

We are well past the time to act. The broken system of housing has been an issue for well over a decade.

What can be done?

Firstly, The Federal Government, States and each County/Parish should be compelled to do an economic analysis on their average local Income to rent prices and establish a more accurate account of the Income class system. Not only Federally, but by state using a reasonable housing cost + average utility calculation for both. We already have semi recent data from the 2020 Census that can be used as a baseline on rent to determine where these statistics have increased in the 4 years since and get a better view on how quickly prices are climbing.

HUD, The Department of Housing and Urban Development already has set guidelines for housing costs. Not to say that every home is created equally, but it is a starting point.

In the same way we have a Lower, Lower-Middle, Middle, Upper-Middle and Upper class income categorization, a similar system needs to be established for homes. All homes should have their usable living space square footage calculated as well as condition of the home compared to a reasonable standard to classify them as to where they place regarding cost regulation. This is to cover landlords in that someone can't demand the same rent for a studio apartment as a 12 bedroom mansion. Some exceptions should be made in that regard.

Using the same system of housing class reporting, reasonable adjustments need to be made to the inflated overall pricing of houses. As well as adjustments made to which decade the house was built in, unless completely updated with an exemption. Things like grandfathering in a home that has lead paint, outdated electrical, plumbing, etc, needs to be reworked in a way to lower the sales price so that the new purchaser can afford to do any repairs, maintenance the previous owner did not.

Additionally, the cost of a plot of land itself needs a rework, as this closes a potential loophole where prices can be augmented to remain the same by saying "Oh, well the land is just worth that much, not the house".

Regulation and restrictions on Corporations/Businesses who are not locally situated in the area from owning single family dwellings needs to be developed to stop the housing market from being bled dry. As it stands, many businesses that manage property have full time employees that do nothing but identify and purchase properties to list at the highest possible rent. This puts a stopper on many people who house hunt, just to see it plucked off of the market by an entity. Exceptions can be made for LLCs established by a single home owner using that method to more easily consolidate their properties for tax reasons.

There is more that can be added to this list. These points make for a starting foundation to begin fixing an otherwise broken and out of control market that, as it exists, is the single biggest financial drain on the US Resident.

What will this accomplish?

By stabilizing prices with categorized baselines and defined limits, the average US renter or perspective home buyer will have more financial stability. Given that stability, they will not only have the power to better provide and care for their families but have more spending power to circulate back into the US Economy overall.

With housing prices stabilized to a manageable level, homelessness will go down as homes will actually be affordable.

By having States and Counties able to set specific rates, this will allow largely populated areas with a larger worker economy to still be more expensive than rural areas with less availability of income. It will also offset the cost of commuting to work if the need arises.

Crime and drug use will also be a factor. Much crime in the US is a result of not being able to afford anything. The same goes for many drug addicts who have simply given up because they feel their altered state of mind and running from reality is easier than the current struggle. By making things more affordable, desperate people will have options for the first time in a long time. 

More jobs will be created and less layoffs will happen, as consumers are able to spend more. Having more money circulating, this is a given. More small businesses will be created as they will actually have a share in the consumer market.

This will stop predatory renting practices, such as using algorithms to collude and inflate prices to an unsustainable level for a very large part of the population. Homes will instead be priced based on a more accurate level reflecting their quality and livability.

The setting of standards defined by categories will make the housing market more competitive.  Homes will start becoming better quality, reflecting their value rather than being nearly unlivable, while being listed at the same price as nearly every other location. This means that sub-standard homes will more often than not be unoccupied until they are brought up to a functional standard.

Establishing a standard for the price of properties for sale will reflect into new home construction. Our population is growing and we will need more housing. Many places in the US are grossly overpopulated, and with so many people in the US restricted to renting only as the ability to purchase is so out of reach, that there is a legitimate decision between renting and homelessness in overpopulated areas.

These changes will also allow restructuring of current Government Aid programs, like Hud, Welfare and Medicaid/Care as people will have more on hand financial stability that will lower Government spending in those areas, and allow that money to go to things like Infrastructure.

How Can We Start?

Contact your local Congressman, Senator, The Media or even Social Media Influencers. Talk to Friends and Family. Spread the word and bring attention to this issue and share this Change Petition with them.

The more people aware of this problem, and realize that this is more of an issue than demanding higher minimum wage, the more it can be picked apart for a solution.

Addition

I understand a lot of people simply want to be paid more. But, I will reiterate that it does not matter how much you are paid when rent hikes immediately follow that adjust for the increase. Yes, the Federal Minimum wage is terrible, and it should change. The issue is that as things are now, it will never matter how high Minimum Wage climbs unless having a roof over your head is no longer a predatory market. It simply can't.