Studies of housing costs have been pretty consistent in recent years. Low-income families struggle, paying far too great a portion of their income toward (usually) rent to make ends meet without sacrificing other necessities.
Yesterday’s Brookings Institute blog post — “Is the rent ‘too damn high’? Or are incomes too low?” — only reinforces that point, though it asks a second important question about the other side of the ledger: incomes. It is a chicken-and-egg problem. Is it the low income that makes the rent unaffordable, or the high rent that makes it difficult for those at the bottom tier?
The evidence would seem to indicate both, though what matters ultimately is that “Low-income renters in the U.S. face acute problems balancing the cost of housing and paying for other necessary expenses.” The median low-income renter “pays more than half of its monthly income on rent, and has less than $500 per month remaining after rent.” That’s $500 a month — $125 a week — to cover all other expenses, including transportation (bus, car, insurance, fuel, repairs), food, clothing, sometimes utilities, etc. This is mitigated, the post points out, by various federal and state programs, including the Earned Income Tax Credit, food and health care assistance, and others. This helps, but does not alter the underlying dynamic, and is not likely to get better any time soon — given that the squeeze has only grown tighter over the last 15 years.
As Brookings reports,
The share of income spent on rent has increased substantially since 2000. In 2015 the median renter in the bottom quintile of the income distribution spent 11 percentage points more of their income on rent than they did 15 years earlier in 2000 (Figure 2). This increase in rent burdens occurred through each business cycle period including the period prior to the financial crisis (2000-2006), the economic downturn (2006-2009), and the subsequent recovery (2009-2015).
All income levels were affected, but not to the same degree. “In part,” Brookings writes, “this is because rents do not rise proportionally with income. The lowest income renters pay about half the median rent of the highest income renters, but earn only 10 percent of their income.”
Brookings makes several recommendations:
- “Make federal housing assistance an entitlement, not a lottery.”
- “Cut housing subsidies to wealthy homeowners, increase subsidies to poor renters.”
- “Maintain and expand income supports for low-income families.”
These would be useful, but only nibble at the edges. They will help, but not truly address the systemic issue — the reality that capitalism creates winners ands losers, that it seeks to maximize profit at the expense of anything that might interfere with the ability to generate profit. Air quality, water quality, human needs, all fall prey.