Rent Is a Third -- or Half -- of Many People's Income
BOSTON (TheStreet) -- When I moved into my modest one-bedroom apartment in a town six miles northwest of Boston in June 2012, I was euphoric. The price, though a bit high for me, would be manageable with careful budgeting, and the location was perfect.
With the upcoming renewal of my lease this past June, though, I was told my rent would increase $100 a month. At an 8.3% increase, not only was the raise much higher than any rent increase I had had in my 15 years as a renter, but it was also considerably higher than what the landlord had previously raised other tenants' rents in the past.
I realized the increase would be a big blow to my budget, but grudgingly decided to renew, as moving would have been the more expensive and tedious option. But before the ink was even dry on the new lease -- and actually, several weeks before my new lease term had even begun -- I was told via my landlord's broker that the rent for my unit would be increased by at least another $150 per month for the 2014 lease renewal. This would mean a 20% increase in my rent in only two years time.
It would seem I am not alone. In August, I reported on the exponential rise in rents in metropolitan areas across the country -- an annual average increase of 3.9% in 25 of the largest rental markets in the country -- with Boston experiencing a 5.5% increase.A report released in December by the Joint Center for Housing Studies of Harvard University reveals that more and more people are becoming "rent burdened" -- that is, paying a disproportionate amount of their monthly income toward rent. The report estimates that one in two households are now paying more than 30% of their incomes toward rent, and one in four are spending more than half. Nearly half of the nation's renters (46%) have an annual income below $30,000, with 22% of them making less than $15,000 a year. More "moderate" income earners -- those making between $30,000 and $74,999 -- make up 37% of the rental market. blog says. "The inability of so many to find housing they can afford dramatically impacts the health and well-being of renters." Though the report mentions that young adults account for the largest share of renters entering the market, it also says that many in this age group are opting to stay in or return to their parents' homes to make ends meet. "My rent was increased $480 dollars [a month]," says Carla, a 32-year-old speech therapist who lives in Queens, N.Y. "Between student loans and rent, I may go live back home." Carla is part of a rising demographic: those who make too much money to qualify for assistance but who are still struggling to pay their bills, including rent. This is especially the case in larger metro areas.
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