A new study by Zillow reveals that rent growth continues to eclipse income growth for Chicago’s lowest-income residents. The report – which considered both multifamily rent prices and U.S. Census data – concluded that even the cheapest apartments in the city remain unattainable for low-income renters at market-rate.
Data provided from June 2016 suggests that the median income of low-income renters in the Chicagoland area is just $21,777 – increasing a meager 13.4 percent from 2011. In comparison, the median rent price for multifamily properties in the same area has gained 24.3 percent over the past five years, topping off at $1,167 per month.
Though Zillow suggests that renters spend no more than 30 percent of their income on housing, Chicago renters in the bottom-third of all incomes would have to spend an average of 64.3 percent in order to make due. In fact, similarly shocking percentages can be seen across almost all 25 of America’s largest metro areas.
As the discrepancy between skyrocketing rent prices and stagnant income rates grows, the financial stability of these renters significantly diminishes. In spending such a large amount of income on rent, basic necessities like food and utilities raise concerns of affordability among low-income residents and are often sacrificed in the name of shelter.
Zillow further concluded that most of the country’s renters do not have enough savings to cover three-months living expenses in the case of an emergency, the consequences of which could spell disaster for both individual residents and the country at large.
“Any renter can tell you how difficult it is to save up extra cash while spending an increasing portion of their income on rent, but it’s much worse for those who make the least,” said Dr. Svenja Gudell, a chief economist with Zillow. “Income inequality is growing in the United States, and this shows how high housing costs contribute to preventing people from moving up the ladder. Without a long-term solution to affordable housing, the gap between the haves and have-nots will continue to widen.”