Historically, the right amount of rent a person should pay on a monthly basis should be no more than 30% of their gross income. If someone earns $4,000 a month in gross income, they should not pay more than $1,200 a month in rent. Over the years, this has increased dramatically to dangerous levels.
Share of Gross Rent in Household Income in the United States in 2015
According to Statista, approximately 23.54 percent of residents in renter-occupied housing units, paid gross rent which exceeded 50 percent of their income. There are approximately 111 million renters in the US. About 43 million of them are paying more than 50% of their income on rent.
The ramifications of rent continuing to increase is massive. Rents have continued to increase over the years while income has stayed static and hours have been reduced.
For example paying more for rent may mean making a decision on what to eat for you and your family. What happens if you lose your job? How do you save for your future? If you are spending a disproportionate amount of income on rent, do the local stores suffer? Are you maxed out on credit cards because you need to make ends meet? These are decisions some of us don’t have to make but imagine if you had to make them.