Rent is too damn high! the housing crisis in America!
I work for a property management company, and as an employee of a company that leases rental homes, I cannot afford to live in the average home I market to people, and we’re well above the median income.
Zillow reports that the average 3-bedroom house rents for $1,350 in the city of Wichita, where I reside. I understand that cities like New York, Los Angeles, or Denver pay much more; but this is about the rent-to-income ratio. The median household income for Wichita, as of the 2020 census, is $56,374 per annum, with a median income of $31,558 per individual, while 15.2% of people fall below the poverty line.
Given that the standard income requirement to lease a rental home in the City of Wichita is 3 times the rental rate, to rent an average 3-bedroom house, you’ll need to make $4,050 per month, or $48,600 per annum gross income, which is technically below the median household income, but, this does not take into account bi-weekly pay schedules, which brings the real monthly income to $3,738, except for the two months a year where there are three pay periods which makes up the annual income figure.
After you factor in an average of 18% payroll tax, the median income of $56,374 drops to $46,226, taking away $16,200 in rent, you only have $1,046 per average 2 paycheck month to live on, which has to cover electricity, water, trash collection, gasoline, insurance premiums, and potentially a car payment and gas utilities, not to mention groceries so you can stay alive to continue to line corporate America’s pockets.
Over the past 3 years, I have seen rents jump between 10% and 25% depending on home type and neighborhood, while value-added services like including water and trash collection have been excluded from apartment home rent using what they call the RUBS method, taking the overall cost of these services per community and passing the cost onto residents based upon their unit size and household makeup.
I have also seen deposit amounts rise to be equal to 1 month’s rent, so in the scenario of $1,350 rent, assuming you move into a home on the first of the month, you’ll be stumping up $2,700. This is on top of application fees, which average $45—50 per adult, plus other, what I consider BS fees, such as a redecoration fee or admin fee, further shifting the burden from owners to the renter.
In recent months, we have seen owners switching to a dynamic pricing model, where rent varies from day to day, based on local market forces. Although once you sign a long-term lease, your rent remains at your lease price, at least until renewal time, when you play the game of rent roulette. This is common in bigger cities, and RealPage, which offers such dynamic pricing ‘software’ has been accused of price fixing.
And of course, this is a catch-22 situation, because you are paying 1/3 to 1/2 or more of your net income to rent a home; you can never save enough money for a deposit to buy a house, when you can clearly afford to make the mortgage payment based upon your rent payment amount, even with the inflated mortgage interest rates, meaning for so many that the American Dream is unobtainium!
Something has to give, either wages have to increase, or rents have to drop. Sadly, in the America we live in, neither of these things is likely to happen, given that our state and national congresses are bought by corporate America, meaning there is little chance of the federal minimum wage being increased. Bearing in mind, if the minimum wage had kept pace with inflation and productivity, it would be $21.50/hr.
Rent might come down if vacancy grows to a high enough percentage that it affects the rental homeowners’ bottom line. In more than 10 years in the industry, I have only seen rents drop a handful of times, special promotions are used to entice people in, instead of decreasing rent to affordable levels.
The lack of affordable housing has become an epidemic, in the state of Kansas, the percentage of Section 8 income-based housing has dropped significantly, creating a massive shortfall of housing for people less fortunate than those earning the median income. In the state of Kansas, there are 41 affordable homes per 100 extremely low-income households, and I’m sure this is mirrored across the whole of the US.
What’s the solution? Increasing the federal minimum wage to at least $15/hr, and creating quality affordable state housing across the nation would be a great start. Overturning Citizens United would also help, pass legislation that stops politicians from receiving campaign contributions from wealthy corporations. I don’t care what the SCOTUS ruled; money is not speech and corporations are not people. Maybe if these politicians could not take bribes, calling what campaign contributions really are, maybe they would actually represent the people that sent them to the state and federal capitol buildings.