Ever had the feeling that your rent takes up way too much of your income? No need to feel bad about it, it’s not your miserliness talking — and for what it’s worth, you’re not at all alone.
Housing costs exceeding 30% of the household income have long been viewed as a red flag, and many housing programs adopted this threshold as a standard over the years in determining what to call “housing-cost burden” or “cost-burdened income.” The simplicity of this approach to the affordability issue is both a blessing and a curse, and sure enough, it’s had its fair share of criticism. In any case, we wanted to see how it matches up to the American reality — or vice-versa.
Firstly, our analysts buried themselves in the latest official reports from the U.S. Census Bureau and compared the median rent in the 100 largest U.S. cities with the median income of renter-occupied households, to see how close they come to the above-mentioned percentage.
The second part of this analysis will shed a different light on the Census’ income data, as we’ll set it against the market-rate rents from the Yardi Matrix database. The reason: median rents extracted from Census are influenced by the affordable housing segment and ,in some cases, they are way too different compared to market rate rents, especially in cities like San Francisco where the monthly rent extracted from Census hovers around $1,659 and the median market-rate rent extracted from Yardi Matrix reaches a monthly $3,346.
The same is valid for Boston ($1,423 vs. $3,005) and Manhattan ($1,611 vs. $3,750). We believe it’s relevant to look at things from this angle too, because there are nowhere near enough affordable units on a national level to meet the demand, resulting in huge waiting lists and many of those eligible for a subsidy having to pay the market rate rent anyway.
Census: Rent Burden and How Much Cash It Leaves You With
So where were we? At the “you’re not alone” thing, right? Let’s begin with taking a look at the most rent-burdened cities according to the Census data, because it’s quite surprising right out of the box:
The median income in Hialeah, FL, is severely rent-burdened — the median rent eats up more than half of it! And who would have thought that the booming Miami would be neck-and-neck with the recovering Detroit?
The thing is, you can’t even say the top 10 cities are weird exceptions. More than two-thirds of the cities we looked at are moderately rent-burdened, meaning that the median rent takes up between 30% and 49.9% of the median income. So, yeah, if you think you pay out rather a lot on rent, you’re really not alone. Then again, being rent-burdened doesn’t necessarily mean you can’t put some coins aside.
Expand the interactive table below or use its search dialog box to see how much of the median income is left after paying the median rent in various U.S. cities, including Anaheim, CA; Henderson, NV; Chula Vista, CA; Raleigh, NC; Wichita, KS; Chesapeake, VA; Portland, OR; Plano, TX; Reno, NV; Riverside, CA; San Antonio, TX; Aurora, CO; St. Petersburg, FL; Tulsa, OK; Columbus, OH; Newark, NJ; Baltimore, MD; Milwaukee, WI; Durham, NC; Lexington, KY; Boise, ID; Corpus Christi, TX; Mesa, AZ; Toledo, OH; and Fort Wayne, IN.
|City||Money left after paying rent||Median household income (renter- occupied households)||Rent burden|
|San Francisco, CA||$52,520||$72,428||27%|
|New York City , NY (Manhattan)||$42,578||$61,910||31%|
|San Jose, CA||$40,346||$61,430||34%|
|San Diego, CA||$33,605||$50,933||34%|
|Jersey City, NJ||$32,714||$47,606||31%|
|Virginia Beach, VA||$31,311||$46,407||33%|
|Chula Vista, CA||$29,646||$45,966||36%|
|Long Beach, CA||$27,755||$41,495||33%|
|North Las Vegas, NV||$26,264||$39,008||33%|
|Santa Ana, CA||$25,602||$41,910||39%|
|San Antonio, TX||$25,331||$36,143||30%|
|New York City , NY (Brooklyn)||$25,270||$40,666||38%|
|Fort Worth, TX||$25,268||$36,500||31%|
|Corpus Christi, TX||$25,169||$36,341||31%|
|St. Petersburg, FL||$24,908||$36,536||32%|
|Los Angeles, CA||$24,658||$39,910||38%|
|Colorado Springs, CO||$24,058||$35,878||33%|
|Kansas city, MO||$23,278||$33,274||30%|
|Las Vegas, NV||$23,270||$35,066||34%|
|Oklahoma City, OK||$23,112||$32,880||30%|
|El Paso, TX||$21,902||$30,926||29%|
|Fort Wayne, IN||$21,275||$29,867||29%|
|St. Paul, MN||$20,392||$30,880||34%|
|St. Louis, MO||$17,059||$26,263||35%|
|Baton Rouge, LA||$16,800||$26,460||37%|
|New Orleans, LA||$13,671||$25,035||45%|
|San Bernardino, CA||$12,615||$23,703||47%|
Take New York City for example. Manhattan and Brooklyn are both rent-burdened — with rent taking up 31% and 38% of the income — but Manhattan’s median income is so high above Brooklyn’s that you’re left with almost 1.7 times more money at the end of the day, if you do the math.
Or put it this way: how would you feel if you’d be left with $42,578 instead of $25,270 after paying your rent? Because that’s the difference between New York City’s most popular boroughs, $17,308 at the end of the year. And would you have thought, that in Buffalo, NY, you’d put aside way less than that, just $13,354?
We have also extracted the cities with the most and the least amount of money left, just to see the difference between the top and the bottom of the list, from the likes of Fremont, CA, and Seattle to Cincinnati, OH, and Detroit.
How Much a Household Should Earn to Afford Market Rate Rent
The more the better, obviously. But let’s not be too ambitious and say you settle for an income that’s just enough to avoid being rent-burdened.
Up to this point, we have used the Census-provided rent data, but the huge deflections in the case of San Francisco, Manhattan and a number of other cities meant it was appropriate to examine things from a different angle.
So, this time, we went with the median rents from Yardi Matrix, and thus removed from the equation any communities that are part of a regulated affordable housing program or benefit from government subsidies. As mentioned earlier, this wouldn’t necessarily be relevant in a world with more than enough affordable units, but realistically, people eligible for income-restricted housing often end up paying market-rate rents across U.S. cities like Atlanta; Philadelphia; Charlotte, NC; or Austin, TX.
Long story short, the results we were after are the hypothetical income needed for the median rent to be exactly 30% of your income, and the difference between it and the reality. The following table — which includes multiple cities such as Miami, Denver, Los Angeles, and St. Paul, MN — will show you just that:
|City||Median renter-occupied household income||Household income needed to afford rent||Diff. ($)||Actual median income as a pct. of non-burdened income|
|New York City |
|New York City|
|Jersey City, NJ||$47,606||$107,960||-$60,354||44%|
|Los Angeles, CA||$39,910||$78,000||-$38,090||51%|
|San Francisco, CA||$72,428||$133,840||-$61,412||54%|
|Long Beach, CA||$41,495||$68,880||-$27,385||60%|
|San Bernardino, CA||$23,703||$39,200||-$15,497||60%|
|San Jose, CA||$61,430||$101,200||-$39,770||61%|
|Santa Ana, CA||$41,910||$65,400||-$23,490||64%|
|New Orleans, LA||$25,035||$37,960||-$12,925||66%|
|San Diego, CA||$50,933||$74,400||-$23,467||68%|
|Baton Rouge, LA||$26,460||$36,000||-$9,540||74%|
|Chula Vista, CA||$45,966||$59,600||-$13,634||77%|
|St. Paul, MN||$30,880||$39,000||-$8,120||79%|
|St. Louis, MO||$26,263||$30,200||-$3,937||87%|
|St. Petersburg, FL||$36,536||$41,000||-$4,464||89%|
|Colorado Springs, CO||$35,878||$35,800||$78||100%|
|Corpus Christi, TX||$36,341||$35,560||$781||102%|
|San Antonio, TX||$36,143||$35,360||$783||102%|
|Las Vegas, NV||$35,066||$34,000||$1,066||103%|
|Kansas City, MO||$33,274||$31,920||$1,354||104%|
|Fort Worth, TX||$36,500||$35,000||$1,500||104%|
|North Las Vegas, NV||$39,008||$35,800||$3,208||109%|
|El Paso, TX||$30,926||$28,200||$2,726||110%|
|Virginia Beach, VA||$46,407||$42,200||$4,207||110%|
|Fort Wayne, IN||$29,867||$26,000||$3,867||115%|
|Oklahoma City, OK||$32,880||$27,160||$5,720||121%|
Disappointing doesn’t even begin to describe the circumstances in Boston, where one would need almost three times the median income to be out of the woods. And now that low-income housing is excluded from the equation, suddenly the two New York City boroughs we mentioned earlier don’t look too rosy either.
On that same note, San Francisco — which the Census data presented as a top performer — now slid closer to the end of our list, with the median income accounting for just 54% of what would be needed to escape rent burden. And even that neat $72,428 paycheck wasn’t enough to prevent that from happening—you’d still need an additional $61,412 to comfortably afford the median rent.
However, the good news is that there are quite a lot of cities where the median rent takes up almost exactly 30% of the median income, such as Glendale, AZ; Colorado Springs, CO; Lincoln, NE; or Houston. (Sort the entries by Actual median income as a pct. of non-burdened income and see the results closest to 100%.) Fremont, CA, is also very close to this threshold, while also boasting the fattest median income of the top 100 largest cities — with rents to match, of course.
Coastal Markets Farthest Below the Affordability Threshold
The following map shows the 15 cities where the median income is the smallest compared to the income needed to afford a market-rate rent:
As it turns out, living on the East Coast has its challenges. Based on the first chart you may have expected Hialeah to lead the pack, but due to the smaller incomes compared to cities like New York City, the fallback expressed in dollar amount is smaller too.
This, however, does not mean that it’s easier to offset the difference, practically for the same reason. Take New York City, for example: Both boroughs included in this study have outrageously low incomes compared to the rental levels, but still it costs you $18,000 less to live in Brooklyn than Manhattan. Not to mention Jersey City, NJ, where the median rent is “only” $60,000 short of cutting the mustard.
Go to the West Coast and you’re likely to see differences of the same magnitude in cities within a few miles from one another. As seen from San Francisco, the hefty paychecks coupled with slightly cheaper rents make the neighboring San Jose, CA, look especially tempting under these circumstances. Still, that almost $40,000 is a lot of money even by Silicon Valley standards: You need to earn six figures to afford the median rent in San Jose.
Oakland, CA, is also just a stone’s throw from San Francisco — but the difference in rent-to-income ratio puts Oakland $5,000 closer to the affordability threshold. Not much, but let’s value what we have while we still have it, because Oakland was among the cities recording the highest increase in rent: 6.3% year-over-year.
Southwestern Suburbs Well above the Affordability Threshold
But enough of the depressing stuff. Let’s see the other extreme, or the cities where the rent-to-income ratio is better than just good enough to afford fair market rent. The narrative remains the same: we compared the median income with the smallest non-rent-burdened income — only that, in this case, the former is larger than the latter.
The map below shows the top 15 cities by how much this difference translates to in a year:
Southwestern metro areas seem to excel when it comes to cheap rents compared to income, the Phoenix, AZ, area and the northern Dallas region in particular. Gilbert, AZ, is the number one city for renters: The median household income here is $17,400 above the minimum amount needed to avoid rent burden.
Only one California city made it to the top: Bakersfield, with $6,400 extra in renter income. Note that there’s no sign of New York and Florida on this map. Virginia Beach, VA, represents the whole East Coast, and according to our latest market report, the city has recorded a 4.4% increase in rent year-over-year, slightly above the national rate of 4.3%.
Is Your Household Rent-Burdened?
By now you must be dying to know how your household measures up to all this. If you’ve already whipped out your trusty old abacus, you may as well put it away because we have something that will put it to shame. Again, the smallest non-rent-burdened income is what you’d need to earn so that you’d pay 30% of it in rent.
Move the horizontal sliders to check if your household is rent-burdened, and see how a different scenario would affect your financial situation:
Use the code below to embed the calculator on your website:
Who is RentCafe and How Was the Data Compiled?
- RentCafe is a nationwide apartment search website that enables renters to easily find apartments and houses for rent throughout the United States.
- To compile the first part of this report, RentCafe’s research team extracted the gross median income of renter-occupied households (representing the sum of the income of all people 15 years and older living in a rental household) as well as the median rent (across all property types) in the 100 most populous US cities from the latest official reports issued by the U.S. Census Bureau (as of early November, 2016).
- For the second part of the report we used the same income data, while the median market rents were provided by Yardi Matrix. Yardi Matrix is RentCafe’s sister company, an apartment market intelligence source which researches and reports on all multifamily properties containing 50 or more units across 124 markets in the United States, that are not part of a regulated affordable housing program and do not benefit from any government subsidies.
Fair use and redistribution
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