Article posted by Multifamily Executive (www.multifamilyexecutive). Posted November 15th, 2017.
The Rent Is Too Damn High is an actual political party in New York City that has nominated candidates for mayor since 2005. But the Big Apple isn’t the place where rents are climbing fastest. SmartAsset set out to find the places where they’re rising more quickly.
In order to find the cities with the largest rent increases, SmartAsset gathered data on four factors. They considered 2013 median household incomes, 2016 median household incomes, 2013 average rent and 2016 average rent.
- Incomes matter: Rental prices in some of the most expensive markets in the country often make headlines. Take San Francisco, our data suggests renting the average place here costs over $3,800 per month, an enormous sum by most standards. But the average SF household earned over $103,000 in 2016, a figure which grew $26,000 from 2013. That growth has meant the rent is slightly less burdensome for San Francisco households than it might be. But in cities where incomes are not growing as fast, residents may be unable to keep up with rent. For example, in New Orleans, the top ranked city, average rent costs grew 36% while average household income only grew 5.6%.
- Sky-rocketing rent in the Golden State: Four of the top 16 cities with the largest rent increases are in California. The highest ranking California city is Los Angeles, followed by Oakland and Long Beach.
- Indianapolis? As a city, it ranked 23rd, with a relatively low difference in the percent change of median household income, at 1.9%.
Data and Methodology
In order to find the cities with the largest rent increases, they looked at data for the 50 largest cities in the country. Specifically, we looked at data on the following two metrics:
- 2013 rent as a percent of income. This is average fair market rent as a percent of income for the median household. Data comes from the Census Bureau’s 2013 1-year American Community Survey and RentJungle.com
- 2016 rent as a percent of income. This is average fair market rent as a percent of income for the median household. Data comes from the Census Bureau’s 2016 1-year American Community Survey and RentJungle.com
They found the difference between rent as a percent of income in 2016 and 2013, and then ranked the cities from largest difference to smallest.
Tips For Saving On Rent
Rent can get expensive. If you want to hit your financial goals, like saving for retirement, you will want to save some money. Here are some tips for save on renting.
- Finding a roommate is a great way to save. In fact you can save thousands of dollars per month by moving in with a roommate. Sites like Craigslist, Padmapper and Roomi are great places to begin your roommate search.
- Another option may be to negotiate a longer lease. By switching from the standard 12-month lease to an 18 or 24-month lease, you avoid having to deal with annual rent increases. You may even be able to ask your landlord for a small cut in his asking price based on the fact that you’re agreeing to live there for a longer period.