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How Much You Need to Make to Rent a Home in U.S. Cities

06/23/2015 08:48 am ET | Updated Jun 22, 2016

How Much You Need to Make to Rent a Home in U.S. Cities

According to the U.S. Department of Housing and Urban Development (HUD), a household that spends over 30% of its income on housing is considered "cost-burdened" and could find themselves under financial stress, unable to purchase basics like clothing, medical care and even food. Yet, for too many families, that 30% -- which includes rent (or mortgage payments), utilities and maintenance -- would be an improvement over what they currently pay.

In a growing number of cities, a significant portion of the population spends 40% or even 50% of income on rent alone. Indeed, SmartAsset's analysis of rent data across the country found that in many places, a family would need to earn six figures to afford average market rents.

Methodology


To calculate the salary needed to pay rent in U.S. cities, SmartAsset looked at fair market rents for two bedroom apartments in the 300 largest cities in the country.1

Since HUD's affordability threshold of 30% includes all housing expenses (not just rent), we applied a lower threshold of 25% for rent alone. So, for example, if average rent is $1,000, that implies a household would need monthly income of $4,000 (or annual income of $48,000) for that rent to be affordable.

After calculating the income needed to pay rent in the all 300 of the largest cities, we narrowed our analysis down to two groups of locations: the principal cities of the fifteen largest metro areas in the country and the fifteen most affordable cities for renters.

How Much You Need to Make to Pay the Rent


San Francisco, California

Average rent for two bedroom apartment: $4,694; Income needed to pay housing costs: $201,171

Recent population growth in San Francisco has not been matched by a growth in the amount of available housing, which means competition for rentals is fierce. As a result, market rental rates across the region have been skyrocketing, making it harder and harder for low- and middle-income earners to find housing.

Other Bay Area cities ranked among the cities where you need to earn the most money to pay rent included San Mateo (where an income of $132,686 is needed to pay rent), Sunnyvale ($122,443), Berkeley ($119,014), Santa Clara ($117,300) and San Jose ($106,414).

New York, New York

Average rent for two bedroom apartment: $3,696; Income needed to pay housing costs: $158,400

While SmartAsset's analysis found that you would need to earn over $150,000 to afford average rent in NYC, the truth is that many households in the city simply devote a far higher proportion of their income to housing. That places them under financial stress, but the alternative -- leaving their city -- might be even more difficult.

Los Angeles, California

Average rent for two bedroom apartment: $2,902; Income needed to pay housing costs: $124,371

While Los Angeles remains far more affordable than the Bay Area, it is by no means cheap. We found that the average fair market rent in the City of Angels would be affordable for households earning at least $124,000 annually. That's a pittance for the Kardashians, but it's more than double the city's median income, which according to the U.S. Census Bureau is $49,497.

Moving to Los Angeles? Calculate how much house you can afford there.

Boston, Massachusetts

Average rent for two bedroom apartment: $2,826; Income needed to pay housing costs: $121,114

Property prices have climbed steeply in Boston over the past year, with the residential price per square feet increasing by 11.5% since April 2014. That translates into higher rents, which means that many Boston's renters have to devote an increasing share of their income to housing in order to stay in the city.

Washington, D.C.

Average rent for two bedroom apartment: $2,683; Income needed to pay housing costs: $114,986

The median income in the nation's capital is among the highest in the country, at $65,830. Someone earning that amount, however, would need to spend nearly half of their monthly income to pay average fair market rents in D.C. That's a far cry from the 30% recommended by HUD as an upper limit for household housing costs.

Seattle, Washington

Average rent for two bedroom apartment: $2,137; Income needed to pay housing costs: $91,586

Over the past several years, Seattle has been the fastest growing big city in the U.S. and it is quickly becoming one of the most expensive cities in the U.S. While development booms in Seattle neighborhoods like South Lake Union and Ballard have generated some additional housing for those new arrivals, the city's renters are still feeling the squeeze.

Miami, Florida

Average rent for two bedroom apartment: $1,939; Income needed to pay housing costs: $83,100

According to the U.S. Census Bureau, the median household income in Miami is just over $30,000 per year. That's less than half the income required to (affordably) pay average fair market rents in the city. That discrepancy mirrors recent findings by the Center for Housing Policy, which found that 38% of households in Miami face a "severe housing cost burden," the highest percentage of any city in the U.S.

Chicago, Illinois

Average rent for two bedroom apartment: $1,745; Income needed to pay housing costs: $74,786

Chicago is a city of neighborhoods, which is reflected in local rental rates. In some areas, like New City and Woodlawn, the average two bedroom costs less than $1,000 a month. On the other hand, in the most expensive areas (the Loop and some northern neighborhoods), average rental rates for a two bedroom are north of $3,000 a month.

Philadelphia, Pennsylvania

Average rent for two bedroom apartment: $1,526; Income needed to pay housing costs: $65,400

While Philadelphia is 100 miles from New York and 140 miles from Washington D.C., it is far more affordable than either of those cities. SmartAsset found that a household earning $65,400 would be able to afford average fair market rent in the City of Brotherly Love, less than half the income needed in NYC, and about 60% the income needed in DC. On the other hand, for many Philadelphians, buying may make more sense than renting.

Atlanta, Georgia

Average rent for two bedroom apartment: $1,412; Income needed to pay housing costs: $60,514

Over the past few years, Atlanta has devoted significant resources to revitalizing its downtown area and other parts of the city. These programs have been mostly successful at drawing residents back to the city by increasing and improving amenities. Nonetheless, the city as a whole remains relatively affordable, with fair market rent on an average two bedroom requiring an annual income of $60,514.

Houston, Texas

Average rent for two bedroom apartment: $1,345; Income needed to pay housing costs: $57,643

Houston's housing market may be cooling off, which is bad news for homeowners but good news for renters. The income needed to pay housing costs on an average two bedroom apartment in Houston is $57,643, roughly 30% higher than the city's median income of $45,010.

Dallas, Texas

Average rent for two bedroom apartment: $1,327; Income needed to pay housing costs: $56,871

Dallas is a relatively young city, with a median age of just under 32 years old. While young people are more likely to rent, they also earn less than their older peers. In Dallas, the median income for households where the primary income earner is 25 years old or younger is just $26,680. That's less than half the income required to (affordably) pay rent on a two bedroom apartment.

Riverside, California

Average rent for two bedroom apartment: $1,185; Income needed to pay housing costs: $50,786

At least by one measure, Riverside is the most affordable major city in the country. SmartAsset's analysis found that an income of $50,786 is required for fair market rent on a two bedroom apartment in the city to be affordable. That is just 91% of the city's median income ($55,636), which means that the typical Riverside household could actually afford an apartment that is slightly more expensive than average.

Phoenix, Arizona

Average rent for two bedroom apartment: $1,053; Income needed to pay housing costs: $45,129

The income needed to pay housing costs on an average two bedroom apartment in Phoenix is actually slightly less than the city's median income (which is just over $47,000 according to the U.S. Census Bureau). That indicates that, unlike many other cities, the rental market in Phoenix is affordable for most households.

Detroit, Michigan

Average rent for two bedroom apartment: $823; Income needed to pay housing costs: $35,271

Detroiters earning at least $35,271 per year can afford the average two bedroom apartment rent in the city without putting stress on their budget. However, given the city's home prices, they may be better off buying a home than renting.

                rent_affordability_table


Lawton, Oklahoma

Average rent for two bedroom apartment: $596; Income needed to pay housing costs: $25,543

The economy in the city of Lawton is strong. The unemployment rate is just 4.3% (as of February 2015), more than a percentage point lower than the national average. Yet housing in the city remains highly affordable. SmartAsset's analysis found that a household earning $25,543 annually could afford average rent in Lawton without being cost burdened. That is less than 60% of the city's median annual income.

Provo, Utah

Average rent for two bedroom apartment: $641; Income needed to pay housing costs: $27,471

Despite its emergence as a major national technology hub, Provo remains highly affordable for renters. Market rent on a two bedroom apartment in Provo requires annual income of just $27,471. Compare that to the tech hubs of Silicon Valley and it seems even better. In places like San Francisco and San Jose, households earning less than $100,000 per year would be cost burdened paying market rents.

Springfield, Missouri

Average rent for two bedroom apartment: $641; Income needed to pay housing costs: $27,471

Springfield is home to a number of universities, including Missouri State. We have some good news for students in Springfield. It has the second lowest rent of any city in the country. In fact, a household income of just $27,471 would cover two bedroom rent at the 25%-of-income threshold considered affordable.

Green Bay, Wisconsin

Average rent for two bedroom apartment: $654; Income needed to pay housing costs: $28,029

Green Bay is known for its natural beauty, its meatpacking industry and, of course, its football team. Add to that list affordability. SmartAsset found that the typical Green Bay apartment could be rented on an income of just over $28,000 per year. That's just 66% of the actual median income in the city and less than any other city that boasts a professional sports team.

Independence, Missouri

Average rent for two bedroom apartment: $654; Income needed to pay housing costs: $28,029

Independence sits just outside Kansas City, but it is significantly more affordable than KC. In fact, SmartAsset's analysis found that in Kansas City, an income of $39,214 is needed to pay fair market rents. That's $11,000 more than the income needed to rent an apartment in Independence.

Killeen, Texas

Average rent for two bedroom apartment: $659; Income needed to pay housing costs: $28,243

Located in Bell County, Killeen sits directly adjacent to Fort Hood. The base is an important driver in the local economy and a significant number of military personnel and their families live in Killeen. An income of just $28,243 would be adequate to pay fair market rent without placing a strain on your budget in Killeen, making it the 6th most affordable city for renters in the country.

Toledo, Ohio

Average rent for two bedroom apartment: $665; Income needed to pay housing costs: $33,317

Toledo is the 4th largest city in Ohio, with a population of about 280,000. Its nickname, "Glass City," owes to the historical and continued presence of a number of major glass manufacturing companies and plants in the area, which, along with auto manufacturing, health care and education, are key drivers in the local economy.

Fort Wayne, Indiana

Average rent for two bedroom apartment: $665; Income needed to pay housing costs: $28,929

According to the National Association of Realtors, home prices in Fort Wayne rose by over 7% from the 4th quarter of 2013 through the 4th quarter of 2014. That's good news for an area that was hard hit by the housing crisis and even better in light of the fact that rentals have remained affordable.

South Bend, Indiana

Average rent for two bedroom apartment: $679; Income needed to pay housing costs: $29,100

With the University of Notre Dame just on the edge of town, South Bend is home to a significant population of students and faculty. While professors are more likely to buy than rent, students who are looking to live off campus should be pleased by the city's relatively affordable rental rates.

Abilene, Texas

Average rent for two bedroom apartment: $694; Income needed to pay housing costs: $29,743

Abilene sits between Fort Worth and Midland in central Texas. The top employers include the Dyess Airforce Base, Hendrick Health System and Petrosmith, which manufactures products used in oilfields.

Jackson, Mississippi

Average rent for two bedroom apartment: $701; Income needed to pay housing costs: $30,043

SmartAsset's analysis found that an income of $30,043 would be sufficient to pay rent in the Mississippi state capital without a family becoming cost burdened.  That is the tenth lowest income level of any city in the U.S. and the lowest of any city in the south.

Dayton, Ohio

Average rent for two bedroom apartment: $701; Income needed to pay housing costs: $30,043

The city of Dayton has a population of 140,000, but the greater metropolitan area has a population of over 800,000, making it the 4th largest metro in Ohio. At the heart of that region is a city that has been reinventing itself in recent years. While it has recovered well from a recession that was especially hard on the region (the unemployment rate at one point was nearly 15%), it remains highly affordable for renters.

Cedar Rapids, Iowa

Average rent for two bedroom apartment: $704; Income needed to pay housing costs: $30,171

Cedar Rapids is part of Iowa's "creative corridor" which includes seven counties in central Iowa. The region is encouraging growth by attracting jobs and businesses in a number of industries including technology, advanced manufacturing and renewable energy. Indeed, workers in those industries may want to give Cedar Rapids due consideration. The income required to afford living there is a fraction of the city's median income of $52,216.

Columbia, Missouri

Average rent for two bedroom apartment: $707; Income needed to pay housing costs: $30,300

Columbia is the quintessential Midwestern college town, with tree-lined streets and quiet, peaceful neighborhoods. While many families in Columbia choose to buy rather than rent, for students, adjunct professors and other temporary residents renting may be the way to go. In that case, the average monthly rent of $707 should be appealing.

Athens, Georgia

Average rent for two bedroom apartment: $708; Income needed to pay housing costs: $30,343

Athens is the sixth largest city in the state of Georgia. The area's economy is dominated by the University of Georgia, which has a student body of over 35,000 and employs nearly 10,000 people. The city also has a noted music scene, which has produced national acts including R.E.M., Bubba Sparxxx and Neutral Milk Hotel.

Questions about our study? Contact us at blog@smartasset.com.

Photo Credit: ©iStock.com/AndrewJohnson


1. Rent data comes from myapartmentmap.com, which tracks current rents on hundreds of properties in each of the cities in our study.