New York isn't the only place where the rent is too damn high. Median rent prices have now crossed a basic affordability threshold for middle-income families in 90 cities across the U.S., the New York Times reports.
Rent and utilities are traditionally considered affordable when they consume 30 percent or less of a household's income. But in 90 cities nationwide, median rent alone—so not even including utilities—exceeds 30 percent of the median gross income. And according to the Times that could keep getting worse:
Nationally, half of all renters are now spending more than 30 percent of their income on housing, according to a comprehensive Harvard study, up from 38 percent of renters in 2000. In December, Housing Secretary Shaun Donovan declared “the worst rental affordability crisis that this country has ever known.”
Apartment vacancy rates have dropped so low that forecasters at Capital Economics, a research firm, said rents could rise, on average, as much as 4 percent this year, compared with 2.8 percent last year. But rents are rising faster than that in many cities even as overall inflation is running at little more than 1 percent annually.
The least affordable city is Los Angeles, where median rent now makes up 47 percent of median income. Next is Miami, where that figure is 43.2 percent, and then College Station, Texas. San Francisco ranks sixth and New York comes in 10th. One in four renter households in the U.S. earns below 30 percent of their area's median income, according to a recent report from the National Low Income Housing Coalition.
In addition to tormenting renters, these high prices could be putting a damper on the economy. More money heading to rent and utilities means less left over for people to spend on goods and services. The sharp uptick in rents has also happened alongside a decline in funding for affordable housing.
The problem, as the Times puts it, is that as the demand for apartments has climbed, the market has catered mainly to high earners. So while we have a surplus of luxury condos lining the beaches of Miami, there's not too much left for your typical renter.