Photo: Robert Clark
Despite some improvements in affordability, nearly half of all US renters are rent-burdened, according to a new report by the listing site ApartmentList.
Increased demand for rental units, combined with a lack of new rental construction has pushed rents upward while wages remain mostly stagnant.
Rent- or cost-burden refers to spending more than the recommended 30 percent of income on rent.
“The cost-burden rate fell for the sixth straight year and, more importantly, the number of cost-burdened households fell for the third straight year. That said, we still have a long way to go in dealing with our nation’s widespread housing affordability issues,” ApartmentList housing economist Chris Salviati tells Livabl.
At the national level, the share of renters who are rent-burdened fell from 49.7 percent in 2016 to 49.5 percent in 2017. Last year’s rent-burden rate was the lowest recorded in a decade.
Much of the decrease in the national rent-burden rate was attributed to an influx of high-income households to the rental market in 2017.
Even with the decrease the total number of rent-burdened households in 2017 was greater than the 2007 level by over 3 million households. Still, the number of rent-burdened households has decreased by over 770,000 households since its 2014 peak.
While national rents have outpaced wage growth, the median renter income grew faster than the median rent for the sixth consecutive year.
And although this too seems to be driven by a recent influx of high-income renters, ApartmentList says that there is some early indication that “renters further down the income distribution may be starting to experience gains.”
Florida is the state with the highest rent-burden rate at just over 56 percent. According to the report, nearly one in three cost-burdened renters lives in either California, New York or Florida.
At the metro level, at nearly 63 percent Miami, Florida has highest cost-burden rate of the country’s 100 largest metros. At the other end of the spectrum, Ogden, Utah has the lowest cost-burden rate at 39.4 percent.
Last year median income renters would be burdened by median housing costs in 20 of the 25 largest metros.
In New York City — the nation’s most expensive rental market — the cost-burden rate decreased from 53.3 percent in 2016 to 53 percent in 2017. The Big Apple ranked 24th on the cost-burden list of the top 100 largest metros.
Since 2007, the number of cost-burdened renter households in New York City has increased by 243,600.
Nearly 28 percent of all New York City renter households are “severely cost-burdened” and only about 25 percent are “moderately burdened.”
“The gap between rent growth and renter income growth in New York City has actually been narrowing. For the past three years, growth in the median renter income has outpaced median rent growth for the NYC metro,” says Salviati.
However, it’s important to point out again that much of this change is also being driven by an increase in the number of high-income renter households, rather than by income growth among existing renter households.
Click here to read the entire report.