Are you a ‘cost-burdened’ renter? Here’s how to tell

More than 21 million households are burdened by rent, the U.S. Census Bureau said this week after releasing data from the 2023 American Community Survey.

The annual survey of U.S. households found that 49.7% of renter households qualify as “rent burdened,” meaning they spend more than 30% of their pre-tax income on rent.

Households that spend more than 50% of their income on rent are considered “severely rent burdened.”

“Housing costs rose between 2022 and 2023 for both homeowners and renters,” said Molly Ross, a survey statistician with the Census Bureau, in a press release announcing the findings . “And new data from the 2023 ACS, 1-year estimates show that the share of a rented household’s income that goes towards these housing costs differs by householder race.”

Black households were most likely to be rent-burdened, the data showed. About 56% of households with only Black residents were burdened, and 30% were severely burdened.

More than half of renter households with tenants who are Hispanic, Native Hawaiian or Pacific Islander, American Indian or Alaska Native, or two or more races were found to be rent-burdened.

As the cost of rent goes up, it can place an even heavier burden on families who aren’t seeing wage growth. The median rent rose from $1,354 in 2022 to $1,406 in 2023, after adjusting for inflation.

For someone paying the median rent, $1,406 per month, they’d need to earn at least $4,687 per month (or $56,240 per year) to not be “burdened” by the cost of housing.

But the going rate for rent is far higher in many U.S. cities – as high as $3,400 in San Francisco and $3,560 in New York . Renters paying that much in rent need to be raking in about $11,700 per month or $140,000 per year to not be burdened.

To determine your rent burden, the City of San Francisco recommends calculating your entire monthly housing costs – including rent, utilities, and renter’s insurance. Multiply that number by 12, and that’s your annual housing costs.

Now, divide that number by your household’s annual income, before taxes. That should give you a decimal, which you can convert into your rent burden percentage by moving the decimal point over two places.

If that sounds like too much math, you can use online rent calculator like this one . You enter your annual income, and it can tell you what your rent budget should be if you want to spend a small portion of your income, a mid-range amount, or a high amount.

For the latest news, weather, sports, and streaming video, head to KTLA.