Most experts agree that people shouldn’t be spending more than 30 percent of their income on housing, but for many people, staying below that 30 percent mark is simply not doable. If you feel like you’re paying far more on rent than you should be, you’re definitely not alone.
A recent study from Harvard found that many U.S. households are actually cost-burdened, meaning they pay more than the 30 percent recommendation for housing. As of 2015, nearly 40 million households were reportedly cost-burdened—and 11 million households spend at least half of their rent on housing, according to the report. Those numbers are especially shocking when you consider how many households there are in the U.S. in the first place—according to Census data, there are just under 117 million.
If you do the math, that means that a whopping 34 percent of households in the U.S. are cost-burdened—and just under 10 percent of households (and more than a quarter of those who are cost-burdened in the first place) spend at least half of their income on housing.
And of course, the data is more nuanced in different areas of the U.S.—for example, 35.4 percent of renters in Miami are cost-burdened according to the data, but only 18.4 percent of households in El Paso are spending too much on rent. And while rental budget burdens are most common in high-cost markets, they’re also widespread in places with moderate rent costs but lower incomes. Nation-wide, 70.3 percent of the lowest-income households face severe household cost burdens—regardless of location.
The number of cost-burdened households in the U.S. did fall from 2014 to 2015, but only by 2.3 percent (about 900,000 households). Despite it being a move in a positive direction, the numbers are still staggering.
The simple-sounding solution is to make sure housing is actually affordable to households with lower income—but the report notes that this is a challenge, citing a study from the National Low Income Housing Coalition. The study found that, for every 100 extremely low-income (those whose incomes were 30 percent of the median or less) renters in 2015, there were only 35 affordable rental units that were in adequate condition and weren’t being occupied by higher income households. Meaning, only about a third of all available rental units are even feasible for lower-income budgets.
You can read the full report PDF here.