July 24th 2023.
When it comes to housing, Providence, Rhode Island, is the most affordable city for Black Americans. According to a report by Real Estate Witch, Providence has the lowest rent-to-income ratio among the fifty largest metropolitan areas in the United States.
The rent-to-income ratio, or RTI, is the percentage of gross monthly income that a tenant needs to pay rent. It is recommended that RTI should not exceed 30% of gross monthly income. The average Providence resident spends 20.5% of their gross monthly income on rent, which comes out to $1,066 a month.
Following Providence are San Antonio, Texas; Hartford, Connecticut; Indianapolis; and Atlanta, which are the five most affordable rent cities for Blacks. The report's author, Jaime Seale, explains that Black Americans tend to have lower annual salaries than the overall population, which means they are spending more of their monthly income on rent.
For example, in Miami, the median annual income for all Americans is $62,870 compared to $50,897 for Blacks. The housing shortage over the past decade has caused the demand for homes to outpace the supply, which has caused home prices to rise rapidly.
Seale also explains that high prices and rising mortgage rates have priced many potential buyers out of the market, which has caused an increase in the demand for rental units and an increase in those prices.
Overall, the report shows that the median U.S. rent has increased from $378 to $1,163 a month since 1985. If rent had grown at the same rate as inflation during this time frame, the median U.S. rent would cost $939 a month instead - about 19% less.
To help make rent more affordable, Seale offers some tips. Negotiate with the landlord when it comes time to renew the lease as the landlord wants to keep good renters. Sign a longer lease as landlords don't want frequent vacancies. If you decide to move, wait until the fall when demand is lower. Refer friends, and if you do, you may be eligible for a cash bonus or rent discount. Moving to a less desirable area can help reduce rent costs, and finding a roommate to split the rent and utility costs can help as well.
The cities that are most affordable for Black Americans are those where income is high and rent is low, meaning individuals spend a smaller portion of their monthly income on rent. The five cities mentioned earlier are the most affordable, although the rent-to-income ratio does differ from city to city.
Overall, understanding rent-to-income ratios is important for renters to be able to find an affordable place to live. Taking advantage of some of the tips mentioned earlier can help make renting more affordable for all.
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