DENVER — Historically, rent and utilities are supposed to account for about 30 percent of a person’s income. But that ratio is becoming increasingly-difficult to attain across the country, according to a new study. And Colorado is no exception.
The study was compiled by Zillow.com for the New York Times, and found that median rent without utilities was more than 30 percent of the median gross income in 90 U.S. cities. Boulder and Denver were among them, and Fort Collins wasn’t far off.
Boulder came in at No. 18 on the list, with the survey finding the average renter can expect to spend 37.2 percent of his or her income on rent. That’s quite the deviation from the historical average of 21 percent, which was based off data collected between 1985 and 2000.
In fact, the 77 percent increase in Boulder’s 2014 rent-to-income ratio from its historical average was only topped by one other U.S. city — New Orleans, where the rent-to-income ratio has increased 159 percent in 2014 from the historical average. That massive increase seems likely due in large part to the huge amount of the rental properties that were destroyed by Hurricane Katrina in 2005.
At 31.1 percent, Denver just made the list of 90 cities where the average rent-to-income ratio was above 30 percent. That’s up 44 percent from Denver’s historic average of 21.6.
Even worse news for Denver and Boulder residents? This rising rent-to-income ratios don’t appear to be trending downward. The percentage is the higher in 2014 in both cities than it has been in any one of the last 14 years.
Rental prices in Fort Collins are also trending upward, according to the stud, but at 29.7 percent, they are still just under 30 percent in terms of rent-to-income.
There were 11 U.S. cities in the study where the average rent is at over above 40 percent of the average income — ranging from major cities like Los Angeles (47 percent) to smaller ones like Pittsfield, Mass. (41 percent).