Study finds link between housing costs, income inequality
Housing markets are exacerbating the gap between the rich and poor, according to a study released by Apartment List.
The study, “Housing Markets and Income Inequality,” finds that while incomes are growing fastest for the wealthiest Americans, housing costs are growing fastest for families at the bottom of the income scale. In fact, the study found, the bottom 10% on the income scale has seen costs rise the most, while the top 25% of earners have actually seen their housing costs fall.
The report look at how the phenomenon plays out for both renters and homeowners. Key results include:
- In each of the 100 largest U.S. metropolitan areas, housing costs are growing more quickly for those in the bottom 50% of income distribution than for those in the top 50%.
- Renters have enjoyed strong income growth over the past decade, but rents have also steadily risen. Monthly housing costs for homeowners, on the other hand, have fallen.
- Since 1980, homeowner cost burdens have fallen across the income distribution, and homeowners are paying a smaller fraction of their monthly paychecks for housing than they used to. Homeowners near the top of the income distribution have seen the greatest decline in their share of income spent on housing.
- But renters at all income levels since 1980 are spending a greater share of their income on rent. Rent payments cut deeper into paychecks for all renters, but especially for those near the bottom of the national income distribution.
- In each one of the top 100 U.S. metropolitan areas, housing costs are growing more quickly for those in the bottom half of the income distribution than for those in the top half.
• Income inequality is rising in 45 of the top 50 metropolitan areas studied. Philadelphia has the greatest disparity between its rich and poor residents, while New Orleans has witnessed the greatest inequality growth over the past 10 years.