An Enterprise Community Partners’ report shows that one in four U.S. renters spends at least half of their income on rent and utilities. According to the report, Americans would rather pay a rent than own their own house although the number of households which spend half of their income on housing increased 26 percent to more than 11 million over the last eight years.
According to the Labor Department, average hourly wages couldn’t keep up the pace with rental prices because the latter surged by nearly twice the wages’ levels across the country over the last five years.
Angela Boyd from Enterprise Community Partners, a non-for-profit group aimed at facilitating affordable housing, explained that one in four renters face a daily dilemma about finding enough money to both pay their rent and buy food for the family.
Analysts explained that the current situation was an outcome of the 2008 financial crisis for several reasons. First, incomes failed to keep pace with inflation and rental prices. Second, US home builders were too slow to cater for the needs of renters. Also, the crisis forced bankrupted homeowners, low-wage workers and millennials, who often live with their parents, to rent a house.
The recession also madepushed more than 2 million U.S. families on the verge of homelessness. It is the case of Lisette Duarte, a LA mom who now pays a rent for an apartment located in a peripheral area of the city.
Mrs. Duarte’s husband was laid off in 2012. Since both their children needed an adult to stay close to them 24/7 due to an autistic disorder, he decided to stay home and let his wife continue with her job which also involved a 90-minute commute on a daily basis.
As they couldn’t afford their three-bedroom apartment anymore they had to move into a hotel. In 2014, they used some savings and vouchers to move in their current apartment. They currently pay about $1,600 per month on rent and utilities. Half of Mrs. Duarte’s income is used to cover housing costs. Federal agencies define housing costs as “burdensome” if they exceed 30 percent of the family’s income.
The Duartes currently have to make some sacrifices – they do not dine out, the use prepaid phones, and they never go on vacations. The savings they manage to make are usually spent on health care.
The new report also found that the states with the most renters that spend more than half of their income on housing costs are Florida, New York, New Jersey, and California. More than 30 percent of people paying a rent in those states struggle with high housing costs relative to their incomes.
The latest report is also consistent with government data. The U.S. Department of Housing and Urban Development found that 12 million U.S. households have to sacrifice more than 50 percent of their incomes on housing costs.
Harvard University researchers found that 27 percent of renters were in the above-mentioned situation eight years ago. Although today’s figures may be even more terrifying, the Harvard team concluded that 27 percent was “unimaginable just a decade ago.”
Image Source: World Property Journal