Whether we rent or own our homes, where we live is important to us. Housing costs are typically our largest monthly expense. The old rule of thumb of not spending more than 25% of income on housing is no longer realistic.
Housing burden refers to the percentage of income households spend on housing costs. Those who spend more than 30% of their incomes on housing costs are considered to be cost-burdened. Those who spend more than 50% of their incomes are described as extremely cost-burdened.
Many prefer to own their home rather than rent for financial or investment reasons. Home ownership is associated with economic stability and can be a means to build wealth. For mortgage owners, housing costs include mortgage payments, property taxes, utility costs, and other fees. When these housing costs are high, households are at risk of foreclosure and homelessness if costs increase or income declines.
There are situations when renting is preferred to owning a home. The flexibility of being able to move at the end of a lease and not having to deal with maintenance and repairs are advantages some renters prefer. Rent, utility costs, and other fees are all considered housing costs for those who rent. Households with high rental housing costs are at risk of eviction and homelessness if rents increase or income declines.
Current data indicates that 21.6% of households in Kansas were considered housing cost burdened in 2018. The percent of owner-occupied households in Kansas considered to be severely cost burdened increased from 4% in 1990 to 6% in 2017. Over the same period, the percent of renter households in Kansas considered to be severely cost burdened increased from 16% to 19%.
This is important because when housing costs exceed 30% of income, money for other things, such as healthy food or health care, may be tight. Putting money aside for emergencies or investing for future needs like children’s education or retirement becomes a challenge. Health can be impacted – increased stress, mental health problems, and increased risk of disease are linked to not having enough money to pay for household needs.
The positive news? The Kansas Housing Resources Corporation is currently conducting a statewide housing needs assessment survey. Community members and stakeholders are invited to share their feedback. Access the survey in English and Spanish.
Health means…reducing the proportion of families that spend more than 30 percent of income on housing.
Contributor: Elizabeth Kiss
