Cities with the Highest (and Lowest) Share of Income Going Towards Rent

October 29, 2020

Photo Credit: Alamy Stock Photo

Homeownership is becoming less and less attainable due to rising home prices. But while the cost of homeownership is high, renters often face an even heavier financial burden. New data from the Census Bureau shows that American renters spend a median 31% of income on housing, compared to just 16.5% for homeowners. These figures vary widely throughout cities and states across the country.

The high cost of rent impacts low-income renter households more than any other group. Over 75% of households with annual income below $50,000 per year spend 30% or more of their income on rent and utilities. Among renter households with an annual income below $20,000, almost 90% spend over 30% of their income on rent.

At the state level, the proportion of income spent on rent varies from a high of 35.6% in Louisiana to a low of 24.7% in North Dakota. Renters in the Midwest tend to allocate the lowest proportion of their income toward housing costs. The opposite is true for renters in states scattered throughout the Northeast, West Coast, and South. In Louisiana, Florida, California, and Rhode Island, the typical renter spends more than one-third of their monthly income on housing.

To identify the most unaffordable cities for renters, researchers analyzed the latest data from the U.S. Census Bureau American Community Survey (ACS). For each city, researchers calculated the median share of income allocated toward rent and utilities by dividing median gross rent by median household income for renters.

Various "majority-minority" cities—those in which minority groups comprise at least 50% of the population—dominate the list of unaffordable cities for renters. In majority-minority cities included in this analysis, an average of 34% of renter income goes toward housing costs. Extreme cases include Miami Gardens, FL (97% minority population) and Springfield, MA (68% minority population), whose renters typically spend more than half of their income on housing.

Here are the cities with the highest and lowest shares of income going toward rent and utilities.

Large cities with the highest share of income going towards rent

1. New Orleans, LA

2. Miami, FL

3. Baltimore, MD

4. Fresno, CA

5. Detroit, MI

6. Boston, MA

7. Los Angeles, CA

8. Memphis, TN

9. Philadelphia, PA

10. Anaheim, CA

Large cities with the lowest share of income going towards rent

1. San Francisco, CA

2. Virginia Beach, VA

3. Columbus, OH

4. Omaha, NE

5. Wichita, KS

6. Seattle, WA

7. Oklahoma City, OK

8. Austin, TX

9. Minneapolis, MN

10. Kansas City, MO

Detailed Findings & Methodology

Renters that spend the most on housing relative to income live in some of the nation's most disadvantaged cities, as evident by below-average incomes. For instance, in New Orleans, where renters spend over 44% of income on housing, renter income is 35% lower than the national median. Furthermore, poverty rates in New Orleans exceed 24%, a rate more than double the national level.

Throughout the country, a lack of affordable housing disproportionately impacts minority communities, who have chronically low rates of homeownership. These trends are particularly troubling in a time when owning a home has become more difficult due to rising home prices and increased living costs.

Interestingly, San Francisco stands out as a counterintuitive example of a city in which existing renters spend a low share of their income on housing. Despite astronomical market rents, a majority of San Francisco's rental units are under rent control, which means that existing renters spend far below market rates. Additionally, renters in San Francisco tend to be extremely well paid. While median gross rent for existing renters in San Francisco is about 78% higher than the national median, household income for San Francisco renters is nearly 150% higher.

Data used in this analysis is from the U.S. Census Bureau American Community Survey (ACS). Median household income is for renter households only. Gross rent includes both contract rent and utility costs; this is intended to control for differences in the inclusion/exclusion of utilities in monthly rents. Household income and gross rent statistics are from the 2019 ACS 1-Year Estimates; whereas, minority population statistics are from the 2018 ACS 5-Year Estimates. The minority population reported is the percentage of residents that did not identify as non-Hispanic white.

To identify the cities where renters spent the largest share of income on rent, median monthly gross rent was divided by median monthly renter household income. Locations were ordered by the resulting statistic. In the event of a tie, the location with the higher median monthly rent was ranked higher.

To improve relevance, only cities with at least 100,000 residents were included. Additionally, cities were grouped into the following population cohorts:

• Small (100,000–149,999)
• Midsize (150,000–349,999)
• Large (350,000 or more)