FACT CHECK: ‘Over 11 Million Americans Are Paying More Than Half Of Their Income On Rent’
Democratic Sen. Kamala Harris said on July 24 that over 11 million Americans spend more than half of what they make on rent.
Over 11 million Americans are paying more than half of their income on rent. This means less money for other necessities like bus fares, groceries, heat, and medicine. It doesn’t have to be this way. Congress must pass the Rent Relief Act. pic.twitter.com/a0wgQoYthW
— Kamala Harris (@KamalaHarris) July 24, 2018
“This means less money for other necessities like bus fares, groceries, heat, and medicine,” she tweeted.
Verdict: Unsubstantiated
Analyses of U.S. Census Bureau data found that at least 11 million rental households spend more than 50 percent of their income on housing costs like rent and utilities.
But Harris specified the cost of rent, not including utilities in her claim. Experts have not calculated whether more than 11 million renters spend over half of their income on rent alone.
Fact Check:
Harris mentioned the figure in a tweet promoting her bill, the Rent Relief Act. The bill would give a refundable tax credit to renters making less than $100,000 a year (or $125,000 a year in high-cost areas) who spend at least 30 percent of their gross income on rent and utilities.
Government agencies have historically considered households that spend more than 30 percent of their income on housing to be cost-burdened, and those that spend more than 50 percent of their income on housing to be severely burdened.
At least two analyses have found that 11 million renters pay more than half of their income on housing costs, including utilities. Researchers generally combine the cost of rent and utilities to measure the housing burden because some rental contracts include the price of utilities in rent and some do not.
It is likely that Harris was referring to one or both of these analyses when she mentioned the 11 million figure. Her office did not respond to a request for comment.
Because Harris’ bill does take total housing costs – including both rent and utilities – into account to calculate tax credits, some could argue that Harris meant to reference total housing costs when she tweeted that 11 million Americans pay more than half of their income on rent.
But the second half of her tweet explicitly separates the cost of rent from the cost of utilities when she mentions that renters could spend more on “heat” – a utility – if rent were more affordable.
As a result, she misrepresents the 11 million figure by suggesting that it is based on rent alone when it is actually based on rent and utilities combined.
“It was a mistake to include ‘heat’ in the follow-up comment, given that such utility costs are already included in the rent burden calculation,” Douglas Rice, a senior policy analyst at the left-leaning Center on Budget and Policy Priorities (CBPP), told The Daily Caller News Foundation in an email.
CBPP noted that utilities account for about 15 percent of housing costs for renters, drawing on data from the Bureau of Labor Statistics.
Rice said that Harris’ general point is valid, though. “When rental costs consume a large share of the family budget, this leaves fewer resources for other necessities,” he said.
Harris repeated the claim in a video produced by NowThis News.
“When people are spending half of the money they make on rent, they don’t have enough left to cover basic living expenses like groceries, medicine, heat, their car payment, paying their student loans or their bus fare,” Harris said.
An analysis of Census data by CBPP found that 11.2 million rental households paid more than half of their income on housing costs in 2015. An additional 7.5 million homeowners paid more than half of their income on housing that year, the organization said. (RELATED: Kamala Harris Says The Title X ‘Gag Rule’ Would Ban Clinics From Mentioning Abortion)
The Joint Center for Housing Studies (JCHS) of Harvard University has also published reports analyzing Census data, and found in its latest report that 20.8 million rental households paid more than 30 percent of their incomes on housing in 2016; of those, 11 million paid more than half of their income.
That number is slightly lower than its post-recession peak, but higher than in previous decades, according to the JCHS. The number of severely burdened renters rose by 3.6 million from 2001 to 2016.
JCHS could not say whether 11 million households pay more than half of their income in rent alone. “We don’t have numbers for just rent alone; because so many people’s rent includes utilities, it would be almost impossible to get that number,” Kerry Donahue, associate director of communications at JCHS, told TheDCNF in an email. CBPP has also not analyzed the cost burden of rent alone.
Low-income households are more likely to face severe rent burdens.
The median rental household in the bottom fifth of the income distribution spent more than 50 percent of its income on rent, according to an analysis of 2015 Census data by the Federal Reserve System and the Brookings Institution. In other quintiles, the median household spent less than 30 percent of its income on rent.
A report from the Department of Housing and Urban Development found that the number of “worst case needs” renters, low-income renters who pay more than 50 percent of their income on rent and who do not receive government housing assistance, increased from 7.7 million in 2013 to 8.3 million in 2015. A CBPP report said that about 75 percent of low-income, cost-burdened renters do not receive government assistance.
Critics of Harris’ bill argue that the tax credit will lead to increases in rental prices and benefit landlords more than renters.
“The problem with housing prices is a lack of housing supply relative to demand,” Will Wilkinson, vice president of research at the libertarian-leaning Niskanen Center, told The Washington Post. “Cities need to build a lot more units, and fast. A tax credit for renters may take the edge off in the short term, but it does nothing about the fundamental problem and could even make the problem worse.”
Published: Tuesday, July 31, 2018
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