Report: Area Renters Need a 37 Percent Raise to Afford Rent

Zillow

Published Nov. 1, 2016, 12:00 p.m. ET

By Sally Deneen

How would you like a 37 percent pay raise? That is the pay increase needed by the typical renter in the Philadelphia metro area to ensure that the rent bill for the median-priced abode takes only 25 percent of monthly income — just as it did in the old days, according to a report.

You'd need an annual raise of $23,465, in other words — and that's assuming you currently earn $64,046 a year, the report states. If you earn less, you'd require a bigger pay boost to reach the needed annual income of $87,511.

"Because rents have been rising steadily for years without much income growth for many Americans, the annual salary needed today to get the share of income spent on rent back to historic levels in most markets would represent a huge raise for most workers," Zillow states in the report.

The typical rental in the city of Philly requires a whopping 43 percent share of the income of a renter who earns the median pay, the report states.

The affordability picture ranges widely across the metro area, as residents in especially hard-hit Camden would need to spend 71 percent of income on the median-priced abode. In other local communities listed in the report, the share of income required often is 30 percent or more.

As a rule of thumb, no more than 30 percent of the household income should be spent on rent; more than that is considered unaffordable. Yet the report suggests that renters who earn the median pay and live in typical-priced homes must devote far more of their incomes to rent in such places as Somerdale (40 percent), Lindenwold (47 percent), Coatesville (48 percent), Penns Grove (49 percent), Leisuretowne (54 percent), Salem (56 percent) and West Chester (62 percent).

"The gap between the most affordable and least affordable communities in a metro can sometimes be very wide," Zillow states. According to the report, the Philadelphia metro area has among the biggest gaps, placing fifth behind Miami, New York, Los Angeles and San Francisco.

In the city of Philadelphia, the median rent is about $1,200. That's lower than the Philadelphia metro area median of nearly $1,600, according to Zillow data for May 2016.

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