Housing affordability is, and probably always will be, a hot topic. There are a number of ways to measure affordability but one of the most popular is by measuring “rental burden”. This measure, estimated yearly by the US Census’s American Community Survey, looks at gross rent as a percentage of renting households’ income over the last 12 months.
With a rule of thumb that no more than 30% of your income should go to housing expenses, there are two categories of cost burden:
- Moderately-cost burdened households spend between 30% and 49.9% of their income on rent.
- Severely-cost burdened households spend over 50% of their income on rent.
I decided to look at rent burdens in 2015 (the latest year with data) across the 10 most populous US cities, plus my hometown of Washington, DC and famously expensive San Francisco.
What does rent burden look like in these cities?
- Of the cities reviewed, the city with the lowest proportion of rental cost burdened households was San Francisco (37%)!!! This number surely comes as a surprise to many however, if we consider a few characteristics of SF, this makes more sense. Chiefly, many lower income residents (more likely to be cost burdened) were priced out a while ago, SF has a high number of rent controlled properties, and although SF is famously expensive to rent in it also has a very high average income.
- The next lowest cost burdens were in Washington, DC (44%) and in San Antonio, TX and Dallas, TX (each with 45%). In DC, despite high living costs, average incomes are also high. Conversely, in the Texan cities, average incomes are significantly lower but so are housing costs.
- Over half of renting households in New York, San Jose, Philadelphia, San Diego, and Los Angeles are at least moderately burdened. A whopping 58% of renting households in Los Angeles pay at least 30% of their income in rent.