April 27, 2011
NEW YORK — Around 10 million American households — or one in every four families that rent their homes — could have to choose between paying rent, buying groceries or keeping current with bills, according to a report released Tuesday.
The number of households spending more than 50 percent of their income on rent and bills jumped by 2.6 million over the last decade, according to a Harvard Joint Center for Housing Studies report. Economists generally consider “affordable” rent to cost about 30 percent of a tenant’s income.
When housing costs hit certain levels, many Americans are forced to choose between rent and food. “In real terms, it means more people have less money to spend on household necessities such as food, health care, or savings,” Eric Belsky, director of the Harvard Joint Center for Housing Studies, said in the report. Households which spend 50 percent or more of their income on rent also spend almost 40 percent less on food and over 50 percent less on health care than households with more affordable rent.
“In the last decade, rental housing affordability problems went through the roof,” Belsky said in the report. “And these affordability problems are marching up the income scale,” he added.
Already, rising rents mean the household budgets of working-class and middle-class families are under strain. Growing numbers of middle-income, and lower-middle-income renters are spending between 30 percent and 50 percent of their incomes on rent. And the report found that rents could start to soar as the recovery takes hold.
This article was posted: Wednesday, April 27, 2011 at 2:41 am