A new Zillow study says local teachers and nurses are limited to extremely small slices of the rental market if they aren’t living with roommates.

“Many renters have been able to keep costs low even as prices have grown over the past several years, but merely affording rent does not mean they are thriving,” Zillow economic data analyst Nicole Bachaud said in a statement. “A deeper look shows a big slice of the market is out of reach for workers looking to maintain a comfortable rent burden. That often means renting an older home with less space but a smaller price tag, or doubling up with roommates or a partner.”

While rent burdens – the share of income spent on rent – can appear low, especially when compared with recent growth in rent prices, renters often live with roommates or a partner, or target less desirable homes to keep housing costs manageable. The typical American teacher spends about 22 percent of their income on rent, well below the widely accepted 30 percent rule for housing affordability. That’s up only slightly from roughly 20 percent of income spent on rent five years ago, despite rent prices growing almost 24 percent over that period. To keep their rent costs this low, only a fraction of the rental market is available to teachers.

Nurses face similar hurdles in finding an affordable rental. While nurses who rent live affordably in all large metros according to the 30 percent rule, they are renting homes at least 100 square feet smaller than the typical rental in each market Zillow studied.

In Boston, Zillow reports that teachers on average only spend about 18.5 percent of their income on rent, down from about 20 percent in August 2016. But to do so, they must choose from only 6.3 percent of rentals in Boston that are priced low enough. Those homes are almost 300 square feet smaller and 33 years older than the typical Boston rental. While the median regional rent is $2,532, according to Zillow, the median Boston teacher spends $901 on rent. The region’s median nurse pays $895 in rent, 14.2 percent of their salary, meaning only 2.7 percent of the region’s apartments are priced so that they are affordable at that level.

One way for communities to ease price pressures on renters is to make it easier to create new inventory, including relaxing zoning restrictions, Zillow researchers said. Zillow research has shown that even modest densification could exceed what is likely needed to meaningfully slow housing price growth over the long term.

“Boosting supply is the clearest path to improving affordability,” Bachaud said. “Allowing for even small amounts of new density could have a big impact on prices.”

Report: Boston’s Teachers, Nurses Face Serious Rent Challenges

by Banker & Tradesman time to read: 2 min
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