Utah Real Estate News Clips - Utah Real Estate

Harvard study looks at renters
July 21, 2006

The U.S. rental market is divided into haves and have-nots with 20 percent of renters having incomes that top $60,000 and 20 percent having incomes less than $10,000, says a recent study by the Joint Center for Housing Studies of Harvard University.

The report, “America’s Rental Housing: Homes for a Diverse Nation,” found that many higher-income renters could buy homes but choose to rent because of the flexible lifestyle, easy access to work and city amenities, and low transaction costs. For working families, rental housing provides an opportunity to save for a home or a place to live during a job change or divorce.

In contrast, those with low incomes have no choice but to rent, and $7 million of the nation’s lowest-income renters spend more than half of their incomes on housing, the study said. Another challenge low-income renters face is supply constraints.

Between 1993 and 2003, some 2 million low-cost units were razed or withdrawn from the rental housing inventory, and many newly built units target the upper-end of the market, the Harvard report said.

In Cache, Weber, Davis, Tooele, Salt Lake, Utah, Summit, Iron and Washington counties, a person must make between $10.31 an hour and $15.45 an hour in order to afford a modest 2-bedroom unit, assuming only 30 percent of an individual’s income is spent on housing, the study said.

In all other areas in Utah, an individual needed to make between $7.12 an hour and $10.30 an hour in order to afford rents.

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