REDLANDS, Calif. — Cost-burdened renting households hit a new high of 22.4 million in 2022. A new report released by Harvard reveals that half of all rental households in the US are spending at least one-third of their income on rent.
Why it matters: Traditionally, spending less than 30% of income on rent has been advised to leave room for savings or other needs. An increasing number of renters are burdened by housing costs due to rising inflation and limited inventory.
In Redlands the situation is similar: half of renting households (49.6%) are spending 30% or more of their income on rent and utilities. Moreover, a quarter of households in Redlands are allocating fifty percent or more of their income to housing expenses.
Renting in Redlands: Since 2019, rent in Redlands has been on the rise. According to data from Zumper.com, there has been a 42% increase in rent from Jan. 2019 to Jan. 2024.
While rental prices are down from the peak of July 2021, the cost remains higher than pre-pandemic averages. In the past month, rent has increased by 2% for all bedroom counts and property types.
Why is rent getting more expensive: The report by the Harvard Joint Center for Housing Studies suggests that the shrinking inventory of low-cost rental units and decline multi-family construction has played in a role in rising rental costs.
In the last decade California has lost 1.4 million rental units priced at $1,400/month or less. Meanwhile, the supply of luxury apartments costing more than $2,000+ month has increased by 145%.
The study also points to slower income growth over the past two decades helping make rent less affordable. The report noted that for renters making under $30,000, the amount of money left over after rent and utilities are paid was just $310 a month.