By Bryce Covert
Paying more than 30 percent of your income on rent is what experts call unaffordable. Yet the number of people who fall into that group has reached record numbers, according to a new report from the Joint Center for Housing Studies of Harvard University.
The share of renters who pay more than 30 percent of what they make on housing, or what the study labels “cost-burdened,” rose 12 percentage points last decade, reaching 50 percent in 2010. That includes 27 percent who face a “severe burden,” or in other words, pay more than half of their income on rent, a figure that rose 8 percentage points. Initial estimates show that there were a record 21.1 million renters who were cost-burdened in 2012.
The most recent data is for 2011, however, when 20.6 million people were cost-burdened and 11.3 million paid more than half what they made for housing. This problem falls heavily on low-income renters. More than 80 percent of those who made less than $15,000 in 2011 paid 30 percent of their income or more on housing, with 71 percent paying at least half. Given their tight budgets, these renters spend about $130 less on food, “a reduction of nearly 40 percent relative to those without [housing] burdens,” the authors write. “Housing affordability is thus clearly linked to the problem of hunger in America.” They also spend significantly less on health care and retirement savings.
It’s not too hard to figure out why so many struggle to afford rent. There is very little affordable housing available. These low-income renters who make $15,000 or less would have to find housing that costs less than $375 a month, yet the median monthly cost for housing that was built in the last four years is more than $1,000. Less than a third of those units rents for under $800, and a mere 5 percent go for less than $400. There were just 6.9 million housing units that these renters could afford in 2011, but there are 11.8 of these renters, and to top it off, 2.6 million of the affordable units are occupied by higher-income people. The availability of low-cost housing has been declining for decades — in 1970, there was an actual surplus of 300,000 low-cost rental units, but by 2011, there was a shortfall of 5.3 million units.
via A Record Number Of Americans Cant Afford Their Rent | ThinkProgress.