“The Rent Eats First”: Rental Housing Unaffordability In The United States
February 12, 2022 by The U.S. is facing a severe housing affordability crisis, where nearly half of renter households spend more than 30% of their income on rent and utilities. This traditional measure of affordability often understates the financial hardships faced by renters, as it doesn’t account for other essential expenses. The authors of this report advocate for a residual income approach, which considers what households can actually afford after covering non-housing costs. Using data from the Economic Policy Institute and the American Community Survey, the report estimates that a significant number of renter households cannot afford a comfortable standard of living after paying rent. The study also explores various policy interventions, finding that combined housing and transportation affordability policies could significantly reduce residual-income cost burdens. Overall, the report underscores the need for comprehensive policy solutions to address the multifaceted nature of housing affordability challenges.