According to a recent report from researchers at The University of Alabama, Alabamians need to make around $58,800 on average to be able to pay rent comfortably.
Keep reading to learn more about this study and how average rent costs and income are varied throughout the state.
What is considered rent-burdened?
To be considered rent-burdened, according to the The Department of Housing and Urban Development (HUD), consumers must spend 30% or more of their income on rent. This reduces their ability to afford other things, such as food, clothing, transportation or medical care.
Among Alabama’s 12 metro areas, the median income is approximately $56,700, slightly less than the $59,000 needed to be considered comfortable. The average rent across the same 12 metro areas was about $1,400 in May.
Alabama’s cities ranked
Across Alabama cities, rental rates and average incomes vary. For example, according to the Waller, Weeks and Johnson Rental Index, renters in Auburn pay an average $1,599 and must make $63,985 to be considered comfortable. However in Mobile, the average renter pays $1,195 and only needs to have an income of $47,813 to be considered comfortable.
Here’s a breakdown of how other Alabama cities are ranked including the average rent and the average income necessary to not be rent-burdened.
- Birmingham: $1,454 avg rent/ $58,176 avg income needed
- Dothan: $1,711 avg rent/ $68,467 avg income needed
- Huntsville: $1,518 avg rent/ $60,727 avg income needed
- Tuscaloosa: $1,523 avg rent/ $60,959 avg income needed
- Daphne: $1,679 avg rent/ $67,197 avg income needed
How Alabama ranks nationally
So how does Alabama rank among other U.S. cities? Nationally, the average U.S. renter needs to make $82,000 yearly to avoid being rent-burdened. According to researchers, if this number sounds astronomical to you– it is.
“This is an amazingly high number. I think most will find this figure shocking, especially given that U.S. median income is $71,500. While the pace of rent growth is slowing around the country, housing affordability is coming more into focus.”Dr. Bennie Waller, UA Culverhouse College of Business and a research associate in the Alabama Center for Real Estate at UA
Based on metrics from the Waller, Weeks and Johnson Rental Index, some U.S. cities require a six-figure income to be considered comfortable. In New York City, for example, the average rent is $3,335 meaning that the average comfortable renter’s income must be at least $133,437. Other cities with six-figure income minimums include Boston, San Francisco, Los Angeles and Miami.
Clearly, the nation as a whole is returning to more normal rent increases. But this does not mean that the rental crisis is over just yet. The level of rents is now much higher and household income has yet to catch up. I think we have moved from a rental crisis into a prolonged affordability crisis.”Dr. Ken H. Johnson, an economist in FAU’s College of Business
Read the study for more
Want to learn more about this study? You can read the full article by Adam Jones here.
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