You need to make $123,269 a year not to be 'rent burdened' here (2024)

Renting

In metro Boston, BIPOC households spent about 41% of their income on rent, while white households shelled out 33.5%, Zillow reports find.

By sury.chakraborty

May 28, 2024 | 3:33 PM

Tenants in metro Boston need to make $123,269 a year not to be “rent burdened,” according to ananalysis by Zillow and StreetEasy.

The average US rent rose to $1,997, according to a report the online real estate marketplace and blog site released on May 9. That means the typical renter household in the nation would need to earn at least $80,000 a year to be “comfortable.” A household is considered rent burdened if more than 30 percent of its income goes to paying the rent.

In metro Boston — the third most expensive rental market in the nation, according to ApartmentAdvisor — rents are 5.5% higher than last year, the Zillow report indicated. Here, the typical rent in April was $3,082 and a household needs to make at least $123,269 not to be rent burdened.

Since 2019, US rents have grown 1.5 times faster than wages, the report said.

An April 16 analysis by ConsumerAffairs, named Connecticut, Hawaii, Rhode Island, Massachusetts, and California, in that order, the worst states for renters.

Another analysis from Zillow indicated that renters from BIPOC (Black, Indigenous, and People of Color) communities are more likely to be rent burdened than white households.

“Economic disparities exacerbated by housing costs contribute to a cycle of poverty and reduced economic mobility, particularly in BIPOC communities,” said Orphe Divounguy, senior economist at Zillow.

In metro Boston, BIPOC households spent about 41% of their income on rent in 2022, while white households shelled out 33.5%, according to the report. The rental burden gap in the region is wider than the national average, which is 34% for BIPOC households and 29% for white households.

“Boston is a place where a lot of people want to live. There are top universities and a strong job market,” Divounguy said. Rents are higher in Boston than the rest of the country, which results in higher rental burden for everyone, he said.

The primary reason why communities of color face higher rental burdens is a matter of income, he added. “Despite typically paying less in rent, BIPOC households are more cost-burdened because of that income disparity.”

The consequence of this phenomenon, according to Divounguy, is less disposable income for health care and education.

There has been movement in the right direction, however.

Divounguy said the national income gap between BIPOC and white renters narrowed from 13.8% to 11.1% between 2019 and 2022. In metro Boston, the gap lessened from 37.3% to 26.6%.

“The rent affordability gap has narrowed as well, from a 8.7 percentage point difference in 2019 to a 7.3 percentage point difference in 2022,” he said.

This is a positive indicator of rent equality, but the disparity remains “significant” and there is a long way to go, he said.

The federal government is trying to help low-income households, but this assistance is stretched thin.

The Housing Choice Voucher Program provides rental assistance to low-income households by paying a rent subsidy directly to landlords. The households pay the difference between the actual rent and the subsidy.

There are limited vouchers available every year, but some landlords do not accept them.Under the state’s Fair Housing Law, it is illegal for landlords to discriminate against renters who receive federal assistance such as housing choice vouchers.

In 2022, 18.6 million households met the eligibility criteria for attaining the vouchers, but only 2.4 million were able to use them, according to Zillow.

Increased funding is the key to helping this program grow and meet the needs of the eligible households, Divounguy said.

During the pandemic, rents increased faster than wages, he said, so the gap between the number of households in need of assistance and the number of available vouchers increased. “Rents in Boston grew 22.4% from 2019 to 2023, while wages grew only 13.4%,” he said.

According to a report by ApartmentAdvisor, an online rental marketplace, the average rent in Boston proper has been consistently higher than the national average for the past year. Rental prices for a one-bedroom unit stood at $2,747 on May 27, while the national average was $1,490.