A low supply for rental housing combined with high demand is pushing rents past the affordability mark in many U.S. cities, the New York Times reports.
Traditionally, rents are considered affordable when monthly rent and utility expenses fall below 30 percent of a household’s income. By that measure, Harvard reported earlier this year that more than half of all U.S. renters have unaffordable housing situations, and Zillow analysis provided to the Times reveals that that proportion is exceeded in 90 U.S. cities on monthly rents alone.
Rental affordability — measured by dividing a metro’s median rent by its median income in the third quarter 2013 — was lowest in Los Angeles (47 percent); Miami (43.2 percent); College Station, Texas (41.8 percent); Santa Cruz, Calif. (41.6 percent); and San Diego (41.4 percent), according to Zillow.
The high rents mean buying a home is sometimes a better deal for those living in the growing number of areas where rental costs continue to take bigger chunks out of income, but tight credit and a plague of widespread student debt, hamper many from doing so, the Times noted.
Source: New York Times