Renters getting crushed by U.S. housing costs

TRD New York /
May.May 06, 2013 11:30 AM

In the grand scheme of personal finances, your take home pay is like an apple pie. Your bills are the hungry flock of kids banging their fists on the table to get their share.

For renters in America, housing is usually the hungriest of the bunch. Ideally, it would gobble up one-third of the pie –– anymore than that, and you likely wouldn’t have enough to feed the rest.

Unfortunately, one in four working renters watched housing devour more than half of their paycheck pie in 2011, according to the latest Housing Landscape Report from the Center for Housing Policy. The report analyzed the period between 2008 and 2011, when the rate of renters putting more than half their income toward housing jumped nearly 4%.

“The growing rate of severe housing cost burdens among renters is not a new trend, but it is clearly an unsustainable one,” said lead report author Janet Viveiros. “While rental costs have steadily risen over the last few years, wages for these working families have not fully recovered from the hit they took between 2008 and 2009. Spending most of your paycheck on rent means cutting back on other necessities, including health care and even food.”

Among working households earning less than 30 percent of their area’s median income (AMI), a whopping 80% spent more than half their pay on housing alone. Among the toughest states for renters are usual suspects like New York, California, Florida, Nevada, and Arizona (see map above).

Much of the strain on renters has to do with fallout from the housing crisis of 2009. Homeowners fled their underwater homes and flooded rental markets to downsize, driving up demand on a stagnant supply of properties and sending rental prices skyrocketing. At the same time, the job market floundered and people’s take home pays dwindled –– basically a perfect storm in personal finance hell.

Homeowners who stuck out the crisis haven’t fared much better, but their cost burden remained relatively stable throughout the economic recovery, according to CHP. One in five working homeowners experienced severe housing affordability challenges, versus one in four working renters. However, their income dropped 4% between 2008 and 2011.


Related Articles

arrow_forward_ios
(Image by Wolfgang & Hite via Dezeen)

Hudson Yards megadevelopment inspires a new line of sex toys

Cammeby's International Group founder Rubin Schron and, from top: 194-05 67th Avenue, 189-15 73rd Avenue and 64-05 186th Lane (Credit: Google Maps)

Ruby Schron lands $500M refi for sprawling Queens apartment portfolio

Wendy Silverstein (Credit: Getty Images)

Wendy Silverstein, co-head of WeWork’s real-estate fund, is out

Jumaane Williams (Credit: Getty Images)

Council to vote on bill to curb Mitchell-Lama cheating

Raizy Haas and Gary Barnett (Credit: Getty Images, iStock)

One of Gary Barnett’s longtime deputies is leaving Extell

Macklowe selling out of Midtown tower, Brooklyn lawmaker wants to rewrite federal housing rules

Macklowe selling out of Midtown tower, Brooklyn lawmaker wants to rewrite federal housing rules

Battle of the boroughs: Tallying the city’s top law firms by real estate sales

Battle of the boroughs: Tallying the city’s top law firms by real estate sales

Renderings of Waldorf Astoria

Inside the Waldorf Astoria’s condo conversion

arrow_forward_ios