Money Matters - Cities with the Most Affordable Rent

 With rent payments taking up as much as 33% of the median income in some cities, the personal-finance website WalletHub today released its report on the Cities With the Most Affordable Rent to highlight where people can find the biggest financial reprieve.

To determine the cities where rent is the most affordable, WalletHub analyzed the median annual gross rent in more than 180 cities, then compared it to the median household income.
 

Lowest % of Income Spent	Highest % of Income Spent
1. Bismarck, ND (15.34%) 2. Sioux Falls, SD (15.95%) 3. Cheyenne, WY (16.09%) 4. Cedar Rapids, IA (16.36%) 5. Fargo, ND (16.65%) 6. Charleston, WV (16.70%) 7. Casper, WY (16.72%) 8. Overland Park, KS (16.81%) 9. Juneau, AK (17.45%) 10. Anchorage, AK (17.76%)	173. Jackson, MS (28.25%) 174. Oceanside, CA (28.26%) 175. Birmingham, AL (28.31%) 176. Orlando, FL (28.58%) 177. Bridgeport, CT (29.80%) 178. Glendale, CA (29.84%) 179. Detroit, MI (31.35%) 180. New Haven, CT (32.18%) 181. Newark, NJ (32.96%) 182. Miami, FL (33.48%)

To view the full report and your city’s rank, please visit:
https://wallethub.com/edu/cities-with-the-most-affordable-rent/147756



“In the most affordable cities for renters, the median cost of rent is as low as 15% of the median income, compared to more than 33% in the most expensive cities. This gives people in the least expensive cities a clear financial advantage; the money they save on rent could go toward their emergency fund or savings for future home ownership.”
–
“People in Bismarck, ND, have the most affordable rent as a percentage of their income. The median annual gross rent in the city is around 15.3% of the median annual income. For comparison, Miami residents spend more than double that, or 33.5% of their income.”

- Chip Lupo, WalletHub Analyst


Expert Commentary

What steps can be taken by local policymakers to increase the affordability of rental housing?

“To increase the affordability of rental housing, policymakers should act upon the recommendations of researchers whose studies have consistently shown that increasing the supply of housing units can reduce rents. These studies demonstrate that communities producing plenty of housing improve conditions for renters, in part because they end up requiring landlords to compete for tenants by lowering prices. Zoning reforms that enable various options – townhomes, ‘granny flats,’ and apartments, for example – and zoning that allows housing to be built ‘as of right’ around ‘main streets’ with shopping and other amenities, or near fixed transit stations, can benefit residents, local governments, and small businesses alike.”
Sara C. Bronin – Professor, Cornell University
 
“Housing policy experts like Jenny Schuetz describe the housing crisis as consisting of two main parts: burdensome land-use regulations that increase costs for all, and the existence of a population segment with too low of an income to comfortably afford housing, even if regulations were relaxed. The first step, therefore, is for states and local governments to reconsider exclusionary policies, such as single-family zoning and minimum lot sizes. My research shows that such policies disproportionately hurt lower-income people. The second aspect of housing policy is improving our housing subsidies programs. Programs like public housing projects, LIHTC grants, and housing vouchers could be reformed to better target those in need. For example, LIHTC grants could focus more on increasing supply rather than simply transferring funds to developers. Also, expanding voucher program eligibility and reducing use restrictions could increase participation in those programs.”
Mike Mei – Assistant Professor, Colgate University
 

What tips do you have for finding affordable housing for renters?

“Search all the usual websites: Zillow, Apartments.com, etc., but also check real estate companies in the city you are considering. If you work at a large company, they may have a site where they advertise rental properties, owned by their employees. Word of mouth can be the best option. Remember, you can negotiate not only the rent but all the utilities and additional expenses. While tenants are expected to pay for electricity, gas, and water things like trash and snow removal, yard maintenance, etc., may be more negotiable.”
Sandy G. Bond, Ph.D. MPS, FNZIV, FPINZ – Professor of Practice, Bucknell University
 
“When searching for affordable rental units online, we can set a budget threshold to filter listings that match our financial limits. For example, if the monthly income is $10,000, the ideal rent range should be around $3,000 – $4,000 to leave enough for other living expenses. Once we have a list of units within budget, we can sort them from lowest to highest rental price and choose the most affordable options that meet our preferences. To find the best value, it's important to search across multiple platforms such as Zillow, StreetEasy, Apartments.com, and Craigslist. Comparing listings across different sources helps identify the best deals. After shortlisting a few promising units, we should contact the listing agents or landlords directly to negotiate a lower rent or request perks such as free utilities, parking, or reduced security deposits. Additionally, affordable rentals tend to go fast, especially in a competitive market. To increase our chances of securing a good deal, we should prepare application documents in advance, including a credit report, references, and proof of income, so we're ready to act quickly when we find the right place.”
Dr. Maggie Rong Hu – Assistant Professor, CUNY
 

What are the pros and cons of renting an apartment or a house?

“An apartment may come with additional amenities, as mentioned above, and generally there is no yard maintenance, but the downside is you are living in close proximity to your neighbors and there can be noise issues. A house usually has more space, a yard which some people like for their pet/s or to garden/sit in. But with this comes more work in terms of yard maintenance. According to a recent report by Marcus and Millichap, millennials are staying in rental apartments longer, with a 54.9% rental renewal rate. Fewer are transitioning to housing ownership. With the median house price of $424,000, up 6.1% over the last year, and mortgage interest rates still over 7%, it is easy to see why. Homeownership affordability has decreased and the gap between ownership versus renting has widened: the average monthly payment on a house that includes mortgage [principal], interest, property taxes and insurance is $3,098 versus the average rent in the US of $1,831/month.”
Sandy G. Bond, Ph.D. MPS, FNZIV, FPINZ – Professor of Practice, Bucknell University
 
“The main advantages of renting over owning include lower monthly payments and increased flexibility. This benefits households that are credit-constrained or have uncertainty about their long-term location choice. Renting also avoids the costs of maintenance and repairs. A disadvantage of renting is that, unlike fixed mortgage payments, rents can increase unpredictably over time. This is especially relevant in rapidly gentrifying neighborhoods, where renters may face the difficult choice of either paying higher rents or moving away. Additionally, renting does not build housing equity, which means that renters forgo the advantages of increased savings and house price appreciation.”
Mike Mei – Assistant Professor, Colgate University


7 Tips for Saving Money on Rent

1. Pick a smaller or less fancy apartment: The larger your living space is and the more amenities it has, the more it’s going to cost you in rent. Giving up some comforts now can help you save money and enjoy better living conditions in the future.
    
2. Improve your budgeting skills: Learning how to budget properly is key for ensuring that you have enough money to afford your monthly rent in addition to your other expenses. In addition, if you’re interested in owning rather than renting someday, you should budget money each month toward an eventual down payment, after prioritizing your basic needs and paying down existing debt.
    
3. Get a roommate: When you live with someone, you can split rent and utility costs with them. Just make sure you live with someone trustworthy who will always have their share of the rent on time.
    
4. Look for units with included utilities: Utilities like electricity, water and oil/gas can add quite a bit to your monthly expenses. However, you may be able to save money by renting a place where utility costs are built into the rent, no matter how much you actually use.
    
5. Shop around: Looking at several different places to rent before deciding on one can help you pick the one that’s most cost effective.
    
6. Take care of your living space: If your rented apartment or house is clean and undamaged when you move out, you’ll be able to get your security deposit back in full.
    
7. Get a rent-controlled unit: Some places have limits on how much landlords can charge for rent and on how much they can increase rent year-to-year. However, this is relatively rare, as only seven states currently have rent regulations in some cities.

 
More From WalletHub

• Best & Worst Places to Rent in America
• Best Real Estate Markets
• Best & Worst Cities for First-Time Home Buyers
• Best States to Live In
• States With the Best & Worst Budgeters
• Changes in Inflation by City
• Best & Worst State Economies
• States Where People Have the Highest Income