Affordable housing is a relative concept. It relates total housing costs to the resources of a household. Economists and policymakers agree that if a family’s rent and utilities are 30% or less of their total income, it is affordable. The remaining 70% of income is usually sufficient to meet the family’s other living needs. If a family’s combined income is $45,000 per year a home renting for $1,125 per month is affordable. One renting for $1,800 is not.
Economists and policymakers have also developed benchmarks for the degree of housing unaffordability a renter household faces. Renter households are considered cost-burdened if the total housing costs are more than 30% of their total income. They are severely cost-burdened where rent and utilities are more than 50% of total income.
In 2018, about 24% of all renter households nationwide were cost-burdened. Another 24% of all renters nationwide were severely cost-burdened. Within the lower income levels the percentages of cost burdened and severely cost burdened renter households are dramatically higher.
From 2001 through 2017 the percentages of renter households that were cost-burdened and severely cost-burdened increased. In 2018, the percentages went down modestly. The 2019 numbers will probably reflect another small reduction.