Cities where rent eats up over half the pay­check

The Washington Post Sunday - - TAKING STOCK - BY JON­NELLE MARTE jon­nelle.marte@wash­

More peo­ple than ever are rent­ing in­stead of buy­ing homes, but be­ing a renter isn’t get­ting any eas­ier.

In many house­holds, the monthly rent eats up the ma­jor­ity of take-home pay — and the bur­den is grow­ing. Some 20.7 mil­lion rental house­holds — or about half of all renters — spent more than 30 per­cent of their in­come on hous­ing in 2013, ac­cord­ing to a re­port from the Har­vard Joint Cen­ter for Hous­ing Stud­ies. About 11 mil­lion of those house­holds spent more than half of their pay­check on rent and util­i­ties, up 37 per­cent from 2003. (Fi­nan­cial ad­vis­ers typ­i­cally rec­om­mend that peo­ple spend less than a third of their pay on hous­ing costs.)

As the map shows, renters in cities that peo­ple ex­pect to be ex­pen­sive, such as New York, San Fran­cisco and Washington, aren’t the only ones strug­gling.

“The rental hous­ing cri­sis is ev­ery­where,” says An­gela Boyd of En­ter­prise Com­mu­nity Part­ners, an or­ga­ni­za­tion that ad­vo­cates for af­ford­able hous­ing.

Take Mi­ami, where close to 36 per­cent of renters spent more than half of their pay on rent and util­i­ties in 2013, the high­est of the 100 metropoli­tan ar­eas stud­ied. Some­one earn­ing the me­dian house­hold in­come of $32,000 and pay­ing the me­dian monthly rent of $1,100 would spend 39 per­cent of their pay on hous­ing.

Even in cities where hous­ing is less ex­pen­sive, wages are of­ten not high enough to make the rents af­ford­able.

In New Or­leans, for in­stance, 35 per­cent of renters ded­i­cate more than half of their pay to hous­ing. Many peo­ple work­ing in tourism and hos­pi­tal­ity, a ma­jor in­dus­try for the area, might have low-pay­ing jobs that make it harder for them to af­ford the me­dian rent bill of $900, Boyd says.

Mid­dle-class fam­i­lies are among those strug­gling the most. The num­ber of peo­ple mak­ing $45,000 to $75,000 who spent more than 50 per­cent of their in­come on hous­ing in­creased by 72 per­cent from 2003 to 2013. For peo­ple mak­ing $30,000 to $45,000, the num­ber of renters in that po­si­tion in­creased by 69 per­cent.

The cheap­est apart­ments are snapped up quickly. The num­ber of avail­able units that cost less than $800 a month fell by 12 per­cent in 2014 from the year be­fore. In many metropoli­tan ar­eas like Washington, much of the new rental hous­ing cre­ated con­sists of lux­ury apart­ments, Boyd says.

Those higher rent costs make sav­ing for a down pay­ment dif­fi­cult. “You’re look­ing around and say­ing, ‘I can’t af­ford to buy a home, and I also can’t af­ford to rent one of these lux­ury apart­ment build­ings,’ ” she says.

But for peo­ple with suf­fi­cient sav­ings, it’s a great time to be a home­owner. About 19 mil­lion home­own­ers — about one in four — spent more than 30 per­cent of their in­come on hous­ing in 2013, the low­est share in a decade.

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