According to a new study by Apartment List, a large share of renters in Metro Denver are struggling with rent burden but an even greater number of renters in rural areas face the same burden.
The study found that almost 25% of Metro Denver renters spent 50% or more of their monthly income on housing in 2017.
In more rural areas like Pueblo and Grand Junction, a larger share of renters carry the same burden despite lower average rents.
According to Chris Salviati, housing economist for Apartment List, this phenomenon occurs because rural areas don’t have economic opportunity despite low housing costs. In areas with economies that are not very robust, there are fewer opportunities to earn higher wages as well as little new construction to help lower rents.
A household that pays 30% to 49% of its gross income toward housing is considered cost burdened. Households that pay 50% or more are considered severely cost burdened.
In the Metro Denver area, nearly 24% of renter households were considered severely rent burdened in 2017, a share that remained unchanged from 2016. 27% of renters were considered rent burdened.
Colorado Springs, the second largest metropolitan area in the state after Denver, had 25% of households considered severely rent burdened and just under 25% considered burdened.
Nationwide, just over 24% of renters are classified as severely burdened and 25% are burdened.
Denver has experienced rapid economic growth over the last few years. Between 2007 and 2017, median renter income grew by 31%. Despite this, rents grew at a much faster pace, increasing by 42.6% over the same period and causing a 3.2% increase in the number of renters who were cost burdened in the city.
In many other cities, income grew fast enough to keep pace with rising rent. In Raleigh, North Carolina, average renter income grew by 19.4% while average rent increased by 14.6%. The share of burdened renters in Raleigh decreased by 2.5% over the same time period.
Two of the larger college towns in Colorado had higher rent burdens than Metro Denver although it is possible that their higher share of low-income students skewed the figures. Boulder County had 30% severely burdened and 30% burdened renters while Fort Collins had 31% severely burdened and 30.5% burdened renters. In these cities, 60% of renters were considered burdened.
In May, Apartment List’s Denver Rent Report found that Metro Denver apartment rent is still a bargain when compared to surrounding suburbs. According to Apartment List, the median one-bedroom apartment rent was $1,050 and $1,320 for a two-bedroom apartment in Denver. While Denver has a high share of luxury and expensive rental units in the urban core, less desirable areas of Denver with older units help keep the median rent down. There has also been a surge of new construction that has helped keep rent from increasing further.
While Denver rents were up 1.6% year-over-year, Castle Rock experienced rent increases of 6% over the same period with the median rent for a one-bedroom apartment at $1,380.Continue Reading