An 'uncomfortably high' number of post-pandemic Americans are 'rent-burdened': report
During the 2000s and 2010s, New York City-based rent control activist and Vietnam veteran Jimmy McMillan laid out a variety of ways in which high rents were making life difficult for New Yorkers. McMillan, founder of The Rent Is Too Damn High Party, argued that New Yorkers were skimping on everything from food to healthcare because they were spending so much of their income on rent.
The problem has only grown worse since then — and not just in New York. According to a report published by Axios on May 22, residents of six U.S. cities now fit Moody's Analytics' definition of being "rent-burdened."
Peck, drawing on Moody's data, reports, "Back in 1999, New York City was the only 'rent- burdened' metro area in the U.S. — meaning renters paid 54 percent of income for rent, according to Moody's. By the end of last year, there were six metros in that pricey club, including Miami, 42 percent; Boston, 33 percent; and Los Angeles, 35 percent."
READ MORE: How millennials’ troubled finances are a 'ticking timebomb' as they enter middle age: journalist
Financial planning experts, back in the 1980s and 1990s, argued that Americans should spend no more than 25 perfect of their monthly income on rent — that is, spend on rent in a month what they made in a week. But in 2023, Moody's definition of being rent-burdened means spending more than twice that.
McMillan has often complained that high rents make it harder to save for a down payment on a home.
According to Peck, the COVID-19 pandemic caused more Americans to become "rent-burdened."
"The median renter in the U.S. would need to spend 29.6 percent of their monthly income on an average rent in the first quarter of 2023, per a report from Moody's Analytics," Peck observes. "That's an 'uncomfortably high; ratio, per Moody's — though it's a slight dip from last year when the rent-to-income threshold crossed 30 percent for the first time ever. And the rub? It's still cheaper to rent than buy in the vast majority of the U.S."
READ MORE: Paul Krugman reveals NYC’s biggest problem — and it's not crime
Peck continues, "According to a Redfin report out last week, there are only four major metro areas in the U.S. where a typical home has a lower monthly mortgage cost than its estimated rent (Philadelphia, Houston, Cleveland and Detroit)…. Rents surged in the pandemic for a variety of reasons, and they remain high now partly as a side effect of surging mortgage rates. Those rates are keeping would-be first-time homebuyers on the sidelines — and that's pushing up demand for rentals."
READ MORE: To end 'disgrace' of poverty wages Sanders’ bill would raise federal minimum to $17
Axios' entire report can be found at this link.
- Rent is unaffordable for more than half the country ›
- Housing is a human right—here’s how to make it a reality ›
- The Supreme Court ended the CDC's eviction ban — here's what that means ›
- Florida AG — wife of a DEA agent — accused of 'not standing with the people' as she vows to fight legal pot - Alternet.org ›