From healthcare to housing, it seems like the cost of almost everything is on the rise. If you’re a renter, chances are you’ve experienced these increases first-hand. According to a recent story by Aljazeera America, researchers claim that half of all renters, or nearly 21 million people, in the United States spend more than 30 percent of their income on rent, while 25 percent of renters spend more than half.
Citing a new study from the Harvard Joint Center for Housing Studies, Aljazeera America reports the “group with the most renters facing a significant burden” is made up of renters who earn below $15,000 annually. In fact, according to the study, 83 percent of the individuals in this group are spending more than a third of their income on rent each year. In order for this group to keep costs at a manageable 30 percent of income, these individuals would need to find a unit priced at $375 per month, a bit of a challenge considering just 5 percent of new rental units in 2011 were listed for less than $400.
Adding to the problem is the increase in rent prices driven by a growing number of renters. According to the study, renting has increased in every age group and the pool of renters is expected to increase going forward. It’s been estimated that over the next 10 years, the rental market could grow by as many as 4 million people.
Experts suggest that the problem is “two-fold”. Rising rent prices caused by increased demand is one concern, but a bigger issue they say is the decrease in renters’ incomes. Despite the fact that median gross rent has increased by 6 percent, median renter income is down 13 percent. To make ends meet, many renters are making cutbacks across the board including on food, healthcare, savings, entertainment, and transportation.
Experts believe that unless the market adapts (or incomes begin to rise), many more people may end up on the streets or relocating to cheaper areas of the country.