How high rent hurts health
Financial experts have long recommended avoiding spending more than 30% of your household income on rent. Any more than that and you’d be considered a “cost-burdened renter.”
But that’s becoming an increasingly challenging rule to try to follow. Between 2019 and 2021, 1.2 million households became “cost burdened” — bringing the total to 21.6 million households in the U.S., according to the most recent The State of the Nation’s Housing report by the Harvard Joint Center for Housing Studies.
More expensive rent means you have less money left over for other essentials. Households with kids that have a 30% to 50% rent burden spend 57% less money on health care and 17% less on food compared to those without rent burdens, according to the study.
This is only likely to continue. Redfin told Business Insider that they’re expecting housing prices to go up in 2024, which will likely increase rent prices. Already, 2023 saw a 1.29% year-over-year rent increase, according to Rent.com’s most recent estimates.
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Housing security is an important factor
The issue isn’t just how much of your income goes to housing, researchers say. Renters, as they point out, face “substantial volatility” in their housing costs, as landlords often have the power to raise rents indiscriminately. Homeowners, on the other hand, have more “predictable” mortgage payments that are often under fixed rates.
The threat of being evicted — and worse yet, facing the prospect itself — also has an impact on mortality risk. If you get an eviction warrant without needing to go to court, you have a 19% higher mortality rate than someone who hasn’t faced this situation.
Worse yet, eviction can lead to homelessness or relocating to less safe neighborhoods — neither of which are likely to increase your access to health care or food.
When a judge gets involved with an eviction, the corresponding mortality rate skyrockets to 40%. Not only do you have the normal stressors of eviction, but you now have to add the legal stressors to it. If someone can’t afford their rent, it’s unlikely they can afford a lawyer either — much less to take time off work or pay for child care so they can show up in court.
What can be done?
The researchers believe that the key policies to increasing the health of those facing these tough circumstances is to increase affordable housing, provide access to legal aid and prevent evictions.
“We need to create a country where quality housing is affordable to everyone,” Graetz told CNBC.
The paper’s authors say that small-dollar mortgages — which are mortgages for homes under $150,000 — could be a way to increase affordable housing. These cheaper homes require less of a down payment and monthly mortgage, making it more accessible for lower-income Americans.
But it’s very difficult to obtain a small-dollar mortgage because it’s not profitable for lenders, according to a recent Pew study. Many potential homeowners can’t even get a mortgage if they wanted to.
The authors also recommend rent vouchers and diversion programs as ways to protect the health of renters and those facing evictions. They believe these may bridge some gaps in the income disparities facing rent-burdened households.
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