The local resource in the state for affordable housing education, information and advocacy, Housing Colorado, released a report describing the comparison of wages and rents for jurisdictions in Colorado. The report "calculates the amount of money a household must earn in order to afford a rental unit in a range of sizes at that area’s fair market rent (FMR), based on the generally accepted affordability standard of paying no more than 30% of income for housing costs."

In Colorado, rents have risen 7% in the last year due primarily to low vacancy rates and increasing rental demand from the foreclosure crisis. The Fair Market Rent (FMR) for a two-bedroom apartment is $924. A household must earn $3,080 per month, or $36,957 per year to be able to afford a home in this price range. Based on the assumption of a 40-hour work week and 52 weeks per year, the Housing Wage to afford a home at FMR is $17.77.

Rental amounts are surpassing affordability rates at an alarming pace. With Colorado's minimum hourly wage at $7.25, a renter would need to work 98 hours per week to be able to afford a two-bedroom apartment at FMR, or have two minimum wage earners working 40 hours per week. The average wage in Colorado is $13.46 per hour, still below the affordability level of $17.77.

In Northern Colorado specifically, the hourly wage needed to afford a two bedroom is $16.33 in Fort Collins/Loveland and $13.71 in Greeley. However, the estimated mean renter hourly wage for 2011 in Fort Collins/Loveland is $9.94 and in Greeley, the mean is $9.84 - well below the income needed to meet the affordability standard. When looking at housing costs, the average two bedroom apartment will cost $849 in Larimer County and $713 in Weld County; and yet renter households in Larimer County can only afford $517 per month or $512 in Weld County.

It remains obvious that affordable housing and rental availability will continue to be an issue for Northern Colorado. Owners who have been unable to sell their homes in a tight real estate market are considering leasing their property or offering a lease to purchase option. If managed and negotiated with a knowledgeable real estate professional familiar with both property management and sales, and includes legal counsel, a lease to purchase is a viable option. Multi-family property will also be in high demand in the upcoming years due to affordability.

For more information on the Colorado Wage and Rent Data, follow this link.