New data is showing that it costs more than ever for people to rent an apartment in Philadelphia.
According to Philadelphia’s WCAU NBC 10 news channel, the median rental rate in the Philadelphia metropolitan area currently takes up about 28.2% of the city’s average income. From 1985 to 2000, the median rental rate took up about 18.2% of median income.
Svenja Gudell, director of economic research at online real estate database Zillow, says that rents in the City of Brotherly Love have doubled since 2000, and incomes haven’t increased to keep up.
So what has caused rent rates in Philadelphia to go up so drastically?
“After the housing crisis, many homeowners became renters,” explains Chirag Patel, Marketing Director at Post Brothers Apartments. “It also became more difficult to obtain mortgage financing, pushing even more potential buyers out of home ownership and into rental properties. This resulted in increased demand without a similar increase in supply.”
Compared with average rental rates across the country, Philadelphia is still relatively affordable — relatively. The median rental rate in the United States is about 29.6% of the country’s average income. Together, utilities and rent shouldn’t take up more than 30% of a household’s income to be considered affordable, NBC 10 reported, which makes Philadelphia’s upward trend concerning.
A normal rent rate for a two-bedroom Philadelphia apartment is $1,135 per month, according to the National Low Income Housing Coalition’s Out of Reach 2014 report released in March. An individual living in the Philadelphia metro area would have to earn $21.83 an hour to be able to afford this apartment. The average Philadelphian earns $5 less than that.
The increase in rents across the city is troubling news, especially for low-income households. Yet there are signs of hope — despite having federal funds for affordable housing cut by nearly half, city officials are working to encourage development of more affordable housing, NBC 10 reported.