Too Much Income Devoted to Making Rent

Photo by: Fox Fire Real Estate LLC
August 1, 2018

Renters are struggling to catch a break. In seven of the largest U.S. cities, the average household would need to make at least six figures to comfortably afford the rent on a two-bedroom apartment, according to a new study by SmartAsset, a personal financial website. SmartAsset researchers looked at how much it takes to afford average rental rates in the nation’s 25 largest cities.

Households that spend more than 30 percent of their incomes on housing are considered “cost burdened” by most economists. SmartAsset researchers found rents in California’s largest cities took some of the biggest bites out of American's paychecks. Four California cities ranked in the top 10 on the list: San Francisco, Los Angeles, San Jose, and San Diego. San Francisco renters need the most income at $187,800 to afford a two-bedroom apartment, according to the study. The average household income in San Francisco, meanwhile, is $103,801 per year.

 

chart showing the cities where rent is highest

SmartAsset

 

A separate study, recently released by PropertyShark and RentCafe, found that if renters could save enough for a down payment they may fare better as homeowners. Renters in more than half of the 50 cities in the study could barely make it until payday, while in 44 of the 50 cities tracked, homeowners were projected to be able to save money each month. Homeowners can save $3,500 a month in San Jose, Calif., and $2,600 in San Francisco, according to the study.

Comments (2)
Posted by: Ronald Horvath | Aug 01, 2018 18:37

No kidding, Cathy.    "The United States, one of the world's richest nations and the "land of opportunity," is fast becoming a champion of inequality," the report concluded.



The Trump administration has slammed the UN report, arguing the organization should instead focus on poverty in the third world.

US Ambassador to the UN Nikki Haley said, "It is patently ridiculous for the United Nations to examine poverty in America."

The report, presented Thursday in Geneva, comes two days after Haley announced the US would withdraw from the UN Human Rights Council.  Haley's comment was in response to a letter from Vermont Sen. Bernie Sanders and 18 other politicians calling on the US to "take action to reduce shameful levels of poverty across the country."

They agreed with the report's conclusion that the Trump administration's $1.5 trillion in tax cuts "overwhelmingly benefited the wealthy and worsened inequality."


Philip Alston, a New York University law and human rights professor, led a UN study traveling across US. The group went to Puerto Rico and Washington, D.C. Alabama, California, Georgia, West Virginia were among the states they visited.


"Most Americans don't care about it. They have bought the line peddled by conservative groups that poor people deserve what they are getting," Alston, the UN special rapporteur on extreme poverty and human rights, told CNN. “

 

https://edition.cnn.com/2018/06/22/us/america-poverty-un-report/index.html



Posted by: Cathy Baker | Aug 01, 2018 17:33

How on earth would a renter who can't make rent now, ever save enough for a down payment?  Mortgages are hard to get these days; down payments would seem to require winning the lottery, or inheriting a small fortune.  It looks to me as if the have-nots have become a permanent unpropertied underclass.



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