NMHC Examines Housing Cost Burdens by Age, Education, and Family Structure, April 13

A research note from the National Multifamily Housing Council, “Do Different Renters Face Different Affordability Challenges?” analyzed housing affordability across distinct groups of renters. One objective of the research was to see whether renters with college degrees or two-income households were less likely than other groups to be housing cost-burdened, spending more than 30% of their incomes on rent. Student households and senior households living alone were those most likely to be housing cost-burdened. Excluding students, households without college degrees tended to have the greatest shares of cost-burdened renters.

The author looked at 90 categories of renter householders in the 2018 American Community Survey (ACS). Householders were classified by age (18-24, 25-34, 45-54, 55-64, and 65+), by educational attainment (in school, not enrolled without a bachelor’s degree, or not enrolled with a bachelor’s degree), and by household type (living alone, living with roommates, married with children, married without children, or single parent). Householders were also categorized by the rent level of their apartment (less than 10th percentile or least expensive, 10th to 49th percentile, 50th to 89th percentile, and 90th+ percentile or most expensive).

The initial categorization revealed several features of the renter population. More than half of renter households in 2018 consisted of renters who lived alone. Of those who lived alone, 60% did not hold a college degree. Living alone was even more prominent among older renters; more than three fourths of householders aged 55 and older lived alone. The report also indicated more expensive apartments tended to be occupied by renters with higher levels of educational attainment. Twelve percent of householders in the least expensive apartments held a bachelor’s degree, while 53% of householders in the most expensive apartments held at least a bachelor’s degree.

To examine how housing cost-burdens varied by household type, the author calculated the percentage of rent-burdened households in each of the 90 categories. The household types with the highest share of housing cost-burdened renters were student households and seniors. Of householders aged 18 to 24 who were in school, living alone, and renting the most expensive apartments, 95% were cost-burdened. Of householders with the same characteristics who were renting in the least expensive apartments, 91% were cost-burdened. The author estimates that more than 10% of all cost-burdened renter households are student households. Many students do not work full-time and will have lower incomes while enrolled, which will contribute to higher rates of cost-burden.

Excluding student households, the household types with the highest shares of cost burdens were those without degrees. Renters without college degrees who lived alone or were single parents tended to be the most housing cost-burdened household types, as were householders aged 18-24 or 65 and older who did not have college degrees. Even in cheaper apartments (at the 10th to 49th percentile of rent level), 73% of 18-24 year-old single parents without college degrees were cost-burdened. By contrast, renters with bachelor’s degrees, married couples without children, and roommate households were among the least cost-burdened household types.

The article can be found here: https://bit.ly/39RJom9