Renting is often considered to be more affordable than homeownership, but the gap between affordable rentals and affordable homes for sale is widening. According to SmartAsset’s 2016 rental affordability survey, there’s a massive income gap for renters. This year’s survey shows that, in Dallas, renters need to make $62,700 to meet HUD guidelines for affordable rentals. That’s an increase of $5,829 from a year ago, and equates to about $1,463 a month on rent alone.
With more would-be Millennial homebuyers being forced to rent thanks to low inventory, skyrocketing market rents are adding insult to injury. Still, according to MetroStudy, builders are shifting into overdrive to bring new housing online in the Dallas-Fort Worth region, though prices for new construction are surging, too.
So, why is it getting more expensive to rent in Dallas?
In general, it has a lot to do with available properties. Let’s take downtown Dallas for example. Most all of the available apartment properties run about $1,200 to $1,400-plus for a one-bedroom, one-bathroom unit. Additionally, most all of the new apartment buildings coming to market are luxury-level buildings. Affordable housing? Only two buildings in downtown have units available that meet HUD affordable housing guidelines.
Now, according to HUD, households should spend less than 30 percent of their income on housing-related costs. For SmartAsset’s survey, they used 28 percent as a guideline for monthly rent vs. income. When a household spends more than 30 percent of their income on housing-related costs, they’re considered “cost burdened.” When they spend more than 50 percent of their income on housing, they’re considered “severely cost burdened” by HUD.
In Dallas, approximately 48.5 percent of renters are cost burdened, according to ApartmentList’s study of 2014 Census data, meaning that almost half of renters in Dallas spend more than 30 percent of their income on housing-related costs. Is this the wake-up call our city needs to focus on building affordable apartments?