Renters currently comprise the highest percentage of households at any time in the past 50 years. With that rate still rising, reflecting increasing demand, rent prices keep increasing commensurately.
This occurs as wages have remained largely stagnant, making rent harder to afford. More than 11 million Americans pay more than half their income to rent.
Nearly half of all renter households — almost 21 million — were considered cost-burdened in 2016, according to a new report from Harvard’s Joint Center for Housing Studies. That means they pay more than 30% of their income to cover their housing, which includes utilities.
Some renters are in an even tighter jam: 25% of renter households pay more than half of their income for housing.
The average rent for an apartment in Bristol is $1,009.
Studio apartments in Bristol rent for $750 a month, while 1-bedroom apartments ask on average $862 a month; the average rent for a 2-bedroom apartment is $1,086.
The average size for a Bristol apartment is 828 square feet, but this number varies greatly depending on apartment type. A studio averages 500 sq. ft., while a one-bedroom apartment offers a more generous square footage: 731. 2-bedroom apartments in Bristol have an average size of 896 sq. ft.
Unlike some cities, Bristol isn’t mainly white-or blue-collar. Instead, the most prevalent occupations for people in Bristol are a mix of both white- and blue-collar jobs. Overall, Bristol is a city of sales and office workers, professionals, and service providers.
There are especially a lot of people living in Bristol who work in office and administrative support (13.94%), sales jobs (11.03%), and management occupations (7.64%).
Losing such a big chunk of your paycheck to housing can have a long-term impact on savings and force tough spending decisions. It can also worsen inequality among renters, the report found.
“It can mean trade offs for other areas of your budget, like food, health care expenditures or transportation,” noted Jonathan Spader, a senior research associate at JCHS. The amount of money the lowest-income renters had left to spend after paying their housing dropped 18% from 2001 to 2016.
Across most income brackets, many millions of Americans are at the edge of a personal financial crisis thanks to their crushing rent payments. When a massive chunk of a person’s pay–a third, half, even more–goes to simply providing shelter, they often struggle to adequately feed and clothe themselves and their families.
The improving economy and rising wages have helped ease the cash crunch for some renters. But the influx of more high-income renters has also played role in the reduction.
Affluent renters have driven almost 30% of renter growth in the past decade. In 2016, more than 18% of renter households earned at least $100,000 — up from 12% in 2006.
This shift, along with high building and land costs, has caused developers to focus on bringing more high-end units to market, which pushed up the median asking price for new apartments 27% between 2011 and 2016.
That’s left lower-income renters in a bind since the supply of affordable rentals for low- and moderate-income households has not kept up with demand.
“We’ve seen fewer and fewer rental units available at lower price points,” explained Spader. “There are two primary challenges, one is to expand the availability of rental assistance and the other is to find ways to increase the construction of new rental units that are made available at lower price points.”
The lower your income, the more likely you are to feel squeezed by your rent.
Middle and low-income renters are the most likely to pay a disproportionate share of their income to cover rent, according to the study. Over the past 15 years, more than half of the growth in cost-burdened renters has been among those earnings less than $30,000.
“As you move up the income spectrum the level of cost burden decreases,” said Spader. “But the other trend that comes out is that the cost burden is the most severe at the lowest income levels.”
A recent study by Hunt.com found that the often-proposed “solution” of renting is not much of a panacea. Rents as a percentage of income, according to Zillow, are now at a historic high of 29.1%, compared with the 25.8% rate that prevailed from 1985 to 2000.
What emerges from the Hunt study, and other research, is a renting population that may never achieve homeownership.
The implications of high rent, and declining home ownership, could be profound over time. In survey after survey, a clear majority of millennials — roughly 80%, including the vast majority of renters — express interest in acquiring a home of their own.
According to the June rent report from the website Apartment List, the pace of rent growth was fairly flat in 2016. But that’s changed over the past five months, with rates increasing nationally at a clip of 0.5% to 0.7% each month in early 2017.
The site’s researchers also noted that further increases in rent are likely.
CCN Money contributed to this article.
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