Paying more than you can afford on Sacramento rent? You’re far from alone, Harvard study says
A new report found a record number of tenants across the country are spending more than they can afford on rent — including thousands of Sacramento-area residents.
A record 22.4 million renter households — up from 20.4 million in 2019 — spent more than 30% of their income in 2022 on rent and utilities, according to the America’s Rental Housing report from the Harvard Joint Center for Housing Studies released this month. Half of renter households in the U.S. were cost-burdened.
That’s defined as renters spending between 30% and 50% of their income on rent and utilities. Severely cost-burdened households spend more than 50%.
Severely cost-burdened households hit a record of 12.1 million in 2022, up 1.5 million from pre-pandemic levels.
Median rents rose 21% from 2001 to 2022, while renters’ incomes rose just 2% in the same period.
In the Sacramento-Roseville-Folsom metropolitan area, where the median renter has a household income of $57,600 and pays a median of $1,693 in monthly housing costs, 57.3% of renter households have a cost burden and 30.5% of renters have severe cost burdens, according to the report.
For a $57,600 salary, paying $1,693 in rent would be about 35% of a renter’s monthly income.
Households with more severe burdens have less money available to pay for other needs after covering rent and utilities.
Renters earning under $30,000 had $310 left over, according to the study, while a single-person household needs about $2,000 to pay for nonhousing needs — even in the most affordable counties, according to the Economic Policy Institute.
As a result, cost-burdened renters are forced to make “dreadful choices,” according to the report. Renters with severe cost burdens in the lowest expenditure quartile spent 39% less on food and 42% less on healthcare than unburdened renters.
One guideline, which may not work for everyone, is to spend no more than 30% of your gross income on rent, according to NerdWallet. That may not be possible for renters in higher cost of living areas, like California.
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