Will Renting Become The New American Dream?

"Jeremiah Jeffries is entering his second decade of teaching elementary school, and he still can’t afford an apartment of his own...He’s now earning an annual salary of about $43,000 as a public school teacher in San Francisco, and he has his own room. But he shares his two-bedroom apartment with another teacher, plus two houseguests who sleep in the living room -- one of whom is a foreign student Jeffries expects will live there for as long as a year.

Jeffries pays about 20 percent of his income for his half of the $1,420 rent. If he lived in the apartment by himself, that share would rise to 40 percent. Paying the average San Francisco rent of $1,743 would edge his housing costs up to nearly half his gross pay. That’s the dilemma for many urban renters in Jeffries’ middle-class income bracket (80 to 120 percent of the area median income): double up, suck your budget dry, or move to cheaper suburban housing and endure a long commute.

From 2001 to 2004, the share of American renters who pay more than half their incomes for housing jumped by 2 million to 15.8 million, according to a report from Harvard University’s Joint Center for Housing Studies (JCHS). That’s almost 44 percent of the nation’s 36.2 million renter households.

Many of those renters are in low-income households that can qualify for subsidized housing. But in the nation’s high-cost urban areas, where rents have risen at nearly twice the pace of wages and home prices have skyrocketed, they are increasingly being joined by residents higher up the income ladder.

The upshot: Oftentimes, even families earning middle-class incomes can no longer participate in the American dream of homeownership—and in fact, in many areas, they are barely able to find affordable rentals. The number of middle-income households paying more than half their incomes in rent surged 30 percent from 2001 to 2004, Harvard’s JCHS found."