Gap Between Rents and Renter Incomes Grew in 2015
According to a recent blog post by the Center on Budget and Policy Priorities (CBPP), the gap between rents and renter incomes grew in 2015, despite a rise in median household income and decline in poverty that year.
Renter incomes fell during the 2001 and 2007-2009 recessions and still haven’t fully recovered, despite a rise in median household income and decline in poverty in 2015. The median renter household’s annual income grew by 2.7 percent or $900 in 2015, to $35,200, but remains 6 percent below the 2001 level adjusted for inflation. Meanwhile, rents stagnated briefly during the last two recessions but are now growing much faster than overall inflation. The median gross rent (rent plus utilities) rose by 2.9 percent or $27 in 2015 to $960 a month. That represents a nearly 9 percent increase in housing costs since 2001.
As a result, the gap between median rents (which have risen 8.6 percent since 2001) and renter incomes (which have fallen 6.2 percent) widened slightly in 2015 to almost 15 percentage points. According to the post, the large gap between household incomes and housing costs creates serious rental affordability problems for many families. Three out of four low-income renters pay over 30 percent of their monthly income for rent and don’t receive federal rental assistance.