Black, Latino Communities Spending Almost Half Their Incomes on Rent
Renters living in predominantly Hispanic or black neighborhoods have to spend more of their income on rent than those in white communities. Devoting nearly half of one’s income to rent each month makes economic mobility that much harder as well.
Renting a home has become nearly a Luxury for Latinos. A recent report by real estate database company Zillow showed that in 2016, it took 48 percent of income to make rent in predominately Latino communities, up from five years ago, when Latinos spent 41 percent. Numbers are similar for the Afro-American community.
In predominately white communities, however, renters only spend about 30 percent of their income on housing, falling in line with the “30 percent rule of thumb” that says it isn’t best for renters nor buyers to spend over 30 percent of their gross income on housing every month, as reported in The Atlanta Black Star.
“This research sheds light on another example of inequality in the housing market,” said Dr. Svenja Gudell, a chief economist at Zillow. Devoting nearly half of one’s income to rent each month makes economic mobility much harder as well.
The report also attributed slow wage growth to the affordability gap and highlighted the fact that, while rent is often cheaper in nonwhite neighborhoods, those same areas haven’t stood to benefit as much as white communities when it comes to improvements in the job market.
The inability to afford rent has negative consequences for residents struggling to pay, sometimes forcing them to forego other important expenses such as medical care and saving for retirement.