For most Americans who rent their home, housing is consuming a growing share of their household budget. Rents have risen significantly in the past two decades while incomes for the majority have not kept pace. As a result, roughly half of renter households nationwide are currently paying more than 30 percent of their income on rent. Further, approximately 12 million households in the United States spend more than half of their income on housing. According to HUD, a family with one full-time worker earning the minimum wage cannot afford the local fair-market rent for a two-bedroom apartment anywhere in the United States. And only one out of every four households that is income-eligible for federal housing assistance receives support. Why have rents increased faster than renters’ incomes in recent decades? What do these shifts mean for the budgets of renter households? What can local governments do create and preserve affordable housing?
What are the dynamics of rental affordability in Boston? Two-thirds of Boston households rent their homes. Between 2009 and 2015, the median gross rent in Boston increased by nearly five percent while the inflation adjusted median household income of Boston renters decreased by nearly four percent. These diverging trends force renters to spend a greater share of their income on rent. Indeed, in 2014 more than one out of every four households in the City of Boston were paying more than half of their income in rent. The affordability crisis is especially acute for the rapidly growing portion of Boston’s population with low incomes. From 2009 to 2015, the number of renter households in Boston categorized as “extremely low-income” (with an income below 30 percent of the area median income, which is an annual income below roughly $24,000 for a four person household) increased by approximately 17 percent. Three out of every four households with in this extremely low-income category pay more than half of their income in rent. Our analysis of census estimates suggests that there are only 33,000 apartments that are both affordable to and available for the 65,100 extremely low-income households in the city, leaving a shortage of nearly 32,000 units affordable to these households.