Report: 1 in 4 Renters Use Half Their Earnings for Housing

In what strikes many consumer rights activists as a dangerous trend, more than a quarter of all renters in the U.S. must shell out at least 50 percent – often more – of their family’s income for rent and utilities.
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The revelation came as the result of a study conducted by Enterprise Community Partners, a non-profit housing resource and think-tank that utilized U.S. Census data to reach its conclusions. In all, the partners discovered the number of households struggling in this way shot up by more than 25 percent in just the last eight years. Meanwhile, average hourly wages are up just 2.1 percent in the last year.

What that means is there are right now approximately 11.25 million households that are using more than half the money they earn just to put a roof over the family’s head.

The situation is even worse in Florida, where it’s estimated one-third of all renters must hand over half their pay to landlord and utility companies.

This gives us a great deal of insight into why paying down debts – let alone saving money – is so impossible for so many Americans.

Our Miami debt lawyers understand in the last five years, rental prices have skyrocketed. They inflated at twice the rate of overall hourly pay for most workers.

What that has meant, researchers say, is that people have had to make some very difficult choices. For example, do they pay their rent on time or do they go a few days without groceries? Is it going to be the gas they need to get to work to keep their job, or a payment on their phone bill?

Meanwhile, there is stiff competition for rental properties. There are not only younger or low-wage workers, but also many families who flooded the market after they lost their homes to foreclosure. Unable to secure another home loan, they were forced to rent. With bad credit, that often means having to do so under unfavorable terms.

So ultimately, we have 2.3 million additional families that are on the brink of homelessness. For them, it’s a day-to-day struggle.

One example recently offered up by an Associated Press economics reporter was that of a family in Northeast Los Angeles, crammed into a two-bedroom apartment after the father lost his job as an electrician. Both the couple’s children, a boy and a girl, have autism. The father chose to stay home and care for them while the mother took a job that requires an hour-and-a-half commute each way. After they lost their home, they found a rental for $1,600-a-month. It’s half of the mother’s monthly paycheck.

To put this situation into perspective, the government considers housing costs to be a burden if they exceed 30 percent.

These families sacrifice much to scrape by. They rely on cell phones that are prepaid. Vacations or dinners out are unheard of. If they can scrape together enough for health care insurance, that’s often where any excess money goes.

More than a third of all Americans today rent rather than own their homes, and despite the growing demand for rental units, new construction and renovation operations have not kept pace.

If you’re battling debt collection in Miami or the surrounding areas contact Jacobs Keeley for a confidential appointment to discuss your rights. Call (305) 358-7991. Also, don’t miss Miami Foreclosure Attorney Bruce Jacobs on 880AM/the Biz, every Tuesday at 6 p.m. on “Debt Warriors with Bruce Jacobs and Court Keeley,” discussing foreclosure topics that matter to YOU.

Additional Resources:
1 in 4 US renters must use half their pay for housing costs, May 1, 2015, By Josh Boak, Associated Press
More Blog Entries:
Florida Foreclosure Stress Manifests Itself in Health Problems, March 20, 2015, Miami Debt Lawyer