A new report by the Harvard Joint Center for Housing Studies shows that the nation’s renters are paying an ever-increasing percentage of their incomes for housing. The traditional standard of affordability is when combined rent and utility costs do not exceed 30% of household income. In 1960, 24 percent of renters paid between 30%-50% of their incomes for housing, and 12% paid above that amount. By 2000, these shares had reached 38% and 20%. And by 2009, the share of renters paying between 30%-50% soared to 49 percent, while 26% – a full quarter of all renter households – paid more than 50% of their incomes for housing.
Both weak income gains and rising housing costs have contributed to this growth. Over the past 30 years, the median renter income has generally risen during economic expansions but then given back any gains during subsequent recessions. Following the 2001 downturn, however, real renter incomes failed to rebound and now remain below their 1980 level. At the same time, real contract rents have climbed by more than 15 percent since 1980.Filed under: Archive