Study: For 53 Percent of Philly-Area Residents, The Rent Is Too Damn High
A study of Census data by the apartment-search site Abodo ranks Philadelphia 25th among the 100 metros with the most renters when it comes to cost burdens.
If you’re young, you’ve heard it from your parents. If you’re not, you’ve heard it from your financial adviser. Heck, you’ve probably heard this advice from your friends: Don’t spend more than 30 percent of your income on housing.
According to a recent study conducted by the apartment search site Abodo.com, 53 percent of Philadelphians find that difficult to do. Abodo found that Philadelphia ranked 25th out of the 100 metro areas with the largest renter populations when it came to “cost-burdened” tenants — that is, those who spend more than 30 percent of their income on rent.
And the problem is nationwide, said Abodo spokesperson Sam Radbil. “With rent rates rising across the nation, our research team at Abodo began thinking about how rent is becoming an extreme cost burden for many people. So we set out to uncover how many people are truly struggling to pay their rent. What we found was that nearly half of all renters face a cost burden and in 99 out of the 100 metropolitan statistical areas in the U.S. with the most renters, 40 percent of renters are spending at least 30 percent of their income on rent.”
The Abodo study examined data from the Census Bureau’s American Community Survey, an annual sample that goes deeper into demographic and economic characteristics of the country’s population. The resulting report, “Heavy Housing Burden,” went into further detail on the 19 metros with the highest percentage of cost-burdened renters.
The study, which measures how renters in different cities and with different incomes are dealing with the high demands of housing costs, found that some of the larger cities in the country with some of the highest rents, including Boston, Chicago and our very own Philadelphia, did not make it onto that top 19 list. (Philly’s 53 percent cost-burdened ratio, however, is not that far below the ratio for the No. 19 metro on the list, New York-Jersey City-Newark, N.Y.-N.J.-Pa., where 54.14 percent of renters spend more than 30 percent of their income on rent.)
The report finds that “some of the largest cities in the U.S., those that usually have the highest rent, actually have [fewer] cost-burdened renters than we initially thought.” If the population floors were removed, it says, Atlantic City, N.J., would top the list of cost-burdened metros, with 65.54 percent of residents spending more than 30 percent of their annual income on rent.
Even though the majority of cost-burdened renters fall into the lowest income bracket in the study — under $20,000 annually — cost burdens are not limited to the poor. The study cites research by Harvard’s Joint Center for Housing Studies that concludes that nearly half of all renters nationwide face rent burdens, and in some areas, most notably urban Honolulu, sizable fractions of even the most affluent households — those making more than $75,000 per year — face rent cost burdens.
“Some of the largest cities in the U.S., those that usually have the highest rent, actually have less cost-burdened renters than we initially thought. And while it’s clear that a huge number of renters are cost-burdened across the country, in both large and small cities, HUD subsidy benefits are limited to just a small number of the burdened renters,” said Radbil.
As HUD uses income relative to the area median (typically 80 percent of the area median income, which is $65,000 annually in the Philadelphia metropolitan statistical area), many cost-burdened renters do not qualify for subsidies and some who do receive subsidies may not be technically cost-burdened. The study examined the percentage of cost-burdened renters aided by HUD programs in each of the 19 most stressed metros and found that they range from a high of 47.9 percent in Springfield, Mass., to just 6.21 percent in Orlando-Kissimmee-Sanford, Fla. (As Philadelphia was not among the 19, Abodo did not examine the percentage of Philadelphians helped by HUD subsidies.)
Nearly half of the cities in the study’s top 19 are in California, home to the city with the highest median rent in the nation, San Francisco — which, despite that fact, did not place in the top 19, most likely because the city’s median household income is one of the highest in the nation and the metro statistics include less expensive areas like the East Bay. East Coast high-rent champion New York City, however, did, bringing up the rear at No. 19.
As the bulk of the cost-burdened renters fall into the two lowest income quintiles in the study — under $20,000 and from $20,000 to $34,999 annually — high rents should be a subject of concern in Philadelphia, given that the city has the highest poverty rate of the nation’s 10 largest cities. While Philadelphia might not be among the top 10 metros with the highest cost-burdened percentage, who’s to say we won’t be there soon if a change isn’t made?