More Americans spend half their pay on rent

WASHINGTON, May 1

The surging cost of rental housing has squeezed a rising proportion of US families since the Great Recession struck in 2007.

For more than one in four renters, housing and utilities consume at least half their family income, according to an analysis of Census data by Enterprise Community Partners, a non-profit that helps finance affordable housing. The number of such households has jumped 26 per cent to 11.25 million since 2007, a sign that the six-and-a-half-year-old recovery from the recession has given scant relief to much of the country.

The government defines rental housing costs in excess of 30 per cent of income as burdensome.

“It means making really difficult trade-offs,” said Angela Boyd, a vice president at Enterprise Community Partners. “There are daily financial dilemmas about making their rent or buying groceries.”

The crisis reflects one of the shortcomings of recovery: Wages have failed to match rising rental prices. At the same time, construction has failed to keep pace with demand from renters. The recession pushed more millennials, former homeowners who faced foreclosure and low-wage workers into rental housing.

A result is that 2.3 million more families face pressures that leave them perilously close to homelessness. It’s a reality faced by Lisette Duarte, a 37-year-old living in a two-bedroom apartment with her family in northeast Los Angeles.

Duarte’s husband lost his job as an electrician more than three years ago. With both their son and daughter on the autistic spectrum and in need of care, he chose to stay at home while she worked a job requiring a 90-minute commute each way. The lost income forced them out of a three-bedroom house and eventually into a hotel, where vouchers over the course of five months helped them save for a security deposit for an apartment.

About a year ago, the family moved into a two-bedroom apartment in the Highland Park neighbourhood where Duarte had grown up. Two-bedrooms in that gentrifying community rent for an average of about $1,600 a month, according to the online service Apartment List. The expense, along with utilities, consumes half of Duarte’s paycheque.

The family relies on prepaid cellphones. They don’t dine out or go on vacations. Whatever extra income they have often goes for health care.

More than 30 per cent of renters in California, Florida, New Jersey and New York state devote at least half their incomes to housing and utilities, according to the analysis. Other than Alaska, South Dakota and Wyoming, at least 20 per cent of renters in every state face similarly high costs relative to income.

The analysis was developed for a ‘Make Room’ awareness campaign sponsored by Enterprise Community Partners. As part of the campaign, pop stars such as Carly Rae Jepsen of ‘Call Me Maybe’ fame, who sang for the Duartes, are performing concerts in the homes of financially distressed tenants.

Decades of barely rising pay has contributed to the problem. Average hourly wages have risen just 2.1 per cent in the past year, according to the Labor Department, while rental prices have climbed 3.7 per cent, the real estate firm Zillow said last week.

Many renters lack the income to pay the cost of maintaining and operating these buildings, said Barry Zigas, director of housing policy at the Consumer Federation of America and a trustee at the non-profit Mercy Housing.