Oregon among states with most cost-burdened renters: Study
PORTLAND, Ore. (KOIN) – A new Harvard University study found that rent is unaffordable for about half of all renters in the United States, listing Oregon among the states with the most cost-burdened renters.
The study, published by the Joint Center for Housing Studies of Harvard University, found that rental markets are cooling after a decades-high volume of new supply has come online. However, more households are cost-burdened than ever before.
"Pandemic resources temporarily shored up the housing safety net, but the need for rental assistance remains greater than ever," the study says. "Additionally, the aging rental stock requires significant investment to address structural inadequacies, inaccessibility, and climate risks. Making these investments is challenging, given the current market environment of increasing operating expenses and high-interest rates. Despite today’s difficult conditions, strong demand from the Gen Z, millennial, and baby boom generations should ensure that the rental market slowdown is short-lived.”
As rents spiked in 2022, a record half of U.S. renters spent 30% of their income on rent and utilities, the study says, noting that a household is considered cost-burdened if they spend more than 30% of their income on rent and utilities.
Oregon is one of the states with the highest percentage of cost-burdened renters in the US, as 50%-57.9% of renters identified as cost-burdened, according to the study.
Other states within the same cost burden range as Oregon include California, Hawaii, Texas, Nevada, New York, and Florida, the study says.
"In the Midwest and the South, where median rents are lowest, cost-burden rates are still 46% and 50%, respectively, because median incomes are also lower. Though renters in the Northeast and West have higher median incomes, the cost-burden rates in these regions are similarly elevated at 50 and 52% because of high housing costs," the researchers said.
“Though rent growth has recently slowed substantially, the extended period of rising rents during the pandemic propelled cost burdens to new heights. At last measure in 2022, a record-high 22.4 million renter households spent more than 30% of their income on rent and utilities. This is an increase of 2 million households over three years and entirely offsets the modest improvements in cost-burden rates recorded between 2014 and 2019,” the study says.
The researchers added, “Among cost-burdened households, 12.1 million had housing costs that consumed more than half of their income, an all-time high for severe burdens.”
According to the study, financial strain is felt across the income spectrum.
“Since 2019, cost-burden shares have risen the most for middle-income renter households earning $30,000 to $44,999 annually (up 2.6 percentage points) or $45,000 to $74,999 annually (up 5.4 percentage points,)" the study says. "Higher-income households also saw their burden rate increase by 2.2 percentage points. Households earning less than $30,000 annually, a population already grappling with persistently high burdens, recorded a 1.5 percentage point increase.”
According to the study, several factors have compounded cost-burden among renters including a dwindling supply of low-rent units, and a decades-long issue of rent increases outpacing income gains.
The study comes after the Oregon Office of Economic Analysis found that 54% of renters in the state do not have enough income left over from rent to cover basic living expenses, according to a 2023 blog from the office.
Officials found in Portland, 40% of renters do not have enough leftover income for basic expenses.
According to U.S. Census Bureau data, the median household income in Portland is nearly $86,000 a year and the median income for an individual is a little more than $37,000, while the median rent sits at about $1,500 a month.