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53 percent of Philly renters are cost-burdened, says new report

So is relief on the way?

A majority of renters in Philly are spend more than 30 percent of their income on rent.
Courtesy of Shutterstock.com

In 2016, more than half of Philly renters paid too much of their income on rent. That’s according to a new report by Apartment List, which analyzed the most recent U.S. Census data on renter incomes and rents to find out where renters are cost-burdened.

The study found that last year 53.4 percent of Philly renters were cost-burdened, which means they pay more than 30 percent of their monthly income on rent. That makes Philly the 71st most affordable city for renters out of the nation's top 100 largest metros.

Even more so, 31 percent of Philly renters were severely cost-burdened in 2016, meaning they spent more than 50 percent of their salaries on rent.

Compared to the U.S. as a whole, Philly renters are more cost-burdened. In general, 49.7 percent of U.S. renters were cost-burdened, the lowest level since 2008. That does like a good thing, but the study authors note that this is likely because more high-income renters are coming and remaining in the rental market. Meanwhile, the salaries of existing renters have remained pretty stagnant.

Take Philly, for example, where rents jumped more than 8 percent between 2005 and 2016. Renters’ wages, though, increased by a mere by 0.3 percent.

So can Philly’s growing renter population expect any relief soon? It depends where you fall on the income bracket, says study author Sydney Bennett.

“We do see indications that the overall cost burden share will continue to decrease, as renter income growth continues to outpace rent increases,” says Bennett. “Unfortunately, it appears that this trend is driven by an increase in the share of high-income renters and decrease in the share of low-income renters, rather than income growth for existing renters.”

Bennett breaks it down by high- and low-income earners: In Philly, the share of high-income renters increased by 2.2 percent, while the share of low-income renters decreased by a similar amount. Furthermore, from 2005-2015, post-rent wages for service workers fell by 5.7 percent, and post-rent wages for blue-collar workers fell another 4.3 percent.

Meanwhile, higher-income workers, which Bennett calls “knowledge workers,” saw their wages increase by 9 percent.

“As more of these knowledge workers enter or remain in the rental market,” says Bennett, “they give the appearance of improved affordability for all renters.”

So where are renters the worst off? Welcome to Miami, where 62.8 percent of renters are cost-burdened. Compare that to Ogden, Utah, where just 37.9 percent of renters are cost-burdened, making it the most affordable large U.S. metro for renters.