Keeping with this week’s theme of affordable rental housing, here’s a chart from Howard Blackson’s Twitter page (not sure its original source) showing the percentage of income paid in rent, on average:
In general, one should not pay more than 1/3 of one’s income to the landlord.
The idea behind this chart is that you can pinpoint the exact time when “your city became unaffordable.” Does anyone have info on average income for young people in Minneapolis or other parts of Minnesota? How would we compare?
Minnesota Compass is the best source for that.
Here’s a list of the Twin Cities cost-burdened households (those that pay over 30 percent of their income for housing): http://www.mncompass.org/housing/cost-burdened-households#7-6936-g
Might have to do a bit of digging for other info. They have sections for median income that you could likely track along with average rent costs in the city or metro area.
As for personal experience, it looks like I am technically not cost burdened, since I pay only 28 percent of my pre-tax income for housing. But for my take-home pay (taxes, insurance, MetroPass, 401K), it ends up being about 39 percent.
I’m also really shocked that Washington rents are not considered more unaffordable. Are incomes really that much higher? Everyone I know that lives in the DC area pays through the nose.
“unaffordable” = subjective, not great term maybe
I am technically a cost-burdened renter! But it’s because I don’t have a car and just put that money towards having a nicer apartment. Though I realize most of the people in the boat with me are maybe not there by choice.
Everybody should be reading this little series on housing affordability metrics over on City Observatory. Residual income is a better way to frame it. http://cityobservatory.org/residual-income-a-better-way-of-measuring-affordability/
Is this percent of gross or take home? I’m assuming gross because that’s how most of the other calculations that use the 30% figure are.
Do Madison, WI. Rent is about half of what it is in SF, but I’ll bet average wage is less than half.
I suspect it has as much to do with wage stagnation as rent prices, though I often wonder about the affordable young person housing of the past (like the “ladies hotel” downtown one of my former coworkers used to reminisce about, that she lived in back in the early 1960s.) Maybe we need some dorm-style or other minimalist but clean & safe housing stock, if we can’t achieve more income equality.