Renters Are in Financial Trouble
Renters Are in Financial Trouble. Image courtesy of hyena reality / FreeDigitalPhotos.net
More than one in four renters use at least half of their household income to cover housing and utility costs, according to a new analysis of Census data by Enterprise Community Partners. The number of renters who are constrained financially from growing household expenses has surged 26 percent since 2007, now at 11.25 million.
“It means making really difficult trade-offs,” says Angela Boyd, a vice president at Enterprise Community Partners. “There are daily financial dilemmas about making their rent or buying groceries.”
Household incomes have not kept pace with rental increases. A recent analysis by the National Association of REALTORS® showed a widening gap between rental costs and household incomes that is widening to unsustainable levels across the country. NAR’s analysis showed that over the last five years a typical rent increased 15 percent, while the income of renters grew by only 11 percent.
In some parts of the country, renters are facing even greater hardships from escalating rental costs. In California, Florida, New Jersey, and New York, more than 30 percent of renters are devoting at least half their incomes to housing and utility expenses, according to the Enterprise Community Partners analysis. At least 20 percent of renters in every state in the U.S. – except for Alaska, South Dakota, and Wyoming – are facing similar high costs relative to income, the analysis found.
Other recent studies are showing the hardships renters now face too from escalating costs. The U.S. Department of Housing and Urban Development estimated that 12 million renters and home owners spend at least 50 percent of their income on housing.
Source: “1 in 4 Renters Use Half Their Pay for Housing Costs,” The Associated Press (May 3, 2015)
