The City of Brotherly Love is not so lovely for lessees as new data shows rental rents are pricier than historical levels.
The current median rental rate in the Philadelphia metro takes up 28.2 percent of median income, according to a new report from real estate data provider Zillow. Historically the median rental rate was 18.2 percent of median income based on figures from 1985 to 2000.
"Rents have significantly increased since 2000, in fact they have roughly doubled, while incomes have not kept up with that rental appreciation," said Svenja Gudell, Zillow's director of economic research.
A renter's living expenses are still lower in Philly compared with the rest of the country, where the current median rental rate is 29.6 percent of median income, the data shows. But it is still cause for concern since the combination of rent and utilities is supposed to take up no more than 30 percent of a household’s income to be considered affordable.
“This is an affordability crisis,” said Althea Arnold, a research analyst at the National Low Income Housing Coalition (NLIHC). “What you’re seeing really is that it is out of reach for the average Philadelphia resident to afford a modest apartment.”
Fair market rent for a two-bedroom apartment in Philadelphia is $1,135, according to the NLIHC’s Out of Reach 2014 report released in March. Someone living in the metro area must earn $21.83 – exactly $5 more than what the average renter earns in the city – to afford that rental rate, the report shows.
Arnold said the situation is especially dire for low-income households.
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“For many households at extremely low income of 30 percent [of area median income] or less homelessness and housing instability are real threats,” she said.
Philadelphians who earn less than 30 percent of the area’s median income –defined as $79,200 for fiscal year 2013 by the U.S. Department of Housing and Urban Development – can only afford to pay $591 a month in rent and utilities, according to Out of Reach 2014.
“This is also a housing stock issue as well,” Arnold said. “The number of new housing while it is increasing, it is only increasing for higher income groups.”
The city has lost federal dollars dedicated to affordable rental housing in recent years, but officials are taking steps to develop more affordable housing units.
"It is unfortunate that at the same time that rental housing in Philadelphia has become less affordable," said Paul Chrystie, Philly's Office of Housing and Community Development spokesman. "Philadelphia’s share of federal funds that help build affordable rental housing has been cut by nearly 50 percent [from fiscal year 2002 to 2015]." Normal 0 false false false EN-US X-NONE X-NONE MicrosoftInternetExplorer4
Across the country, the National Housing Trust Fund is dedicated to helping communities preserve and rehabilitate rental homes.
"While it is startling and upsetting," Arnold said, "there is a solution."
Contact Alison Burdo at 610.668.5635, alison.burdo@nbcuni.com or follow @NewsBurd on Twitter.
