San Francisco is the epicenter of America ’ s rental housing crisis.
There, the median monthly rent for a one- bedroom apartment is more than $3,600. (“Median” means that half of the one-beds cost more and half cost less.) And you can easily fork over twice that for a nondescript three-bedroom without parking. The median rent for a one-bedroom in New York City is nearly $2,900. Boston and Los Angeles weigh in at $2,300. Rents in the Heartlands, where income growth has flattened since 2008 and rental housing is scarce, are also increasing. Nationwide, the median cost of a one-bedroom apartment is more than $1,200. Around the country, incomes are not keeping up with rising rents, as the below chart highlights. The Pew Charitable Trusts attributes the national increase in rental demand to the aftermath of the 2008 recession, when millions of homeowners suffered foreclosures. They migrated into rental markets, reducing supply and raising prices. Today, decent housing is unaffordable for millions of families.
MANY AMERICANS ARE BARELY SCRAPING BY What is affordable? Federal housing guidelines calculate affordability as paying no more that 30% of a household’s income toward rent. Therefore, an income of $24,000 makes monthly rent of $600 affordable. For an income of $75,000, the affordable rent is $1,875, which in San Francisco will get you a single room in a shared apartment, according to Zumper, which tracks the ups and down of rental markets. The picture does not get rosier outside of San Francisco. The Pew Charitable Trusts calculates that 40% of America’s 43 million renting households are “rent burdened,” i.e., paying more than 30% of family income for housing. Worse, about one fifth of renter households are paying more than half of their earnings to landlords, which diminishes budgets for groceries, child care, health care, and education.
RENT INCREASES OUTPACED INCOME GROWTH SINCE 2001 2001-2015
160.0
Today, decent housing is unaffordable for millions of families.
140.1
Rent Cost
120.0
Median Household Income
100.0
80.0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
60 October 2018
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