A new report released on Tuesday by researchers at Florida Atlantic University and two other institutions reveals that the cost of housing is on a continued upward trend in many parts of the United States. The study found that the average renter in 11 U.S. markets must earn a six-figure annual salary to avoid being classified as rent-burdened. The term “rent-burdened” applies to consumers who pay 30% or more of their incomes on rent. Those who spend 50% or more of their incomes are considered severely rent-burdened.
According to the end of April report, San Jose, California, tops the list of cities where the highest salary is necessary to avoid being rent-burdened, at $131,563 annually. San Francisco, New York, and Miami follow closely behind. In addition, renters in San Diego, Oxnard, California, Boston, Los Angeles, Bridgeport, Connecticut, Honolulu, and Riverside, California, must each earn at least $100,000 annually to avoid the rent-burdened label.
The Sunshine State dominates the list of most overpriced markets in the country, with Cape Coral-Fort Myers, Miami, North Port-Bradenton, and Deltona all ranked in the top ten. The researchers also point out that consumers who spend 30% or more of their incomes on rent struggle to pay for other necessities such as food and medication.
Commenting on the findings, Ken H. Johnson, an economist in Florida Atlantic University’s College of Business, said, “Not a lot of people make that kind of money. This data illustrates perfectly what we’ve been saying about an ongoing housing affordability crisis. Rents aren’t coming down significantly, if at all, so until incomes increase sharply, consumers in much of the country will continue to do without basic needs.” Researcher Shelton Weeks, of Florida Gulf Coast University, added, “It’s essential to build more rentals to keep pace with demographic shifts across the country. But until then, the rent crisis will be most persistent in the Sun Belt states as they gain significantly in population.”
On the other hand, Wichita, Kansas, emerges as the least rent-burdened market, where the average renter needs to earn slightly under $40,000. McAllen, Texas, follows shortly behind, requiring an annual salary of less than $48,000.
As housing continues to pose significant challenges in various parts of the United States, policymakers may need to review existing laws and regulations to enhance access to affordable housing, especially for low to middle-income earners.