Skyrocketing rent prices is not a new conversation in major US cities, especially San Francisco. High cost of living is a frequent topic in the Bay Area, and study shows that many Gen Z renters are particularly affected.
StreetEasy released a study on cities that have the most “rent burdened” Gen Z renters, and unsurprisingly SF made the list. The study defines “rent burdened” as when some spends 30% or more of their income on their housing costs. The study found that 63.5% of Gen Z renters in SF fall into that category. The U.S. Department of Housing and Urban Development considers housing costs to include rent and utilities.
The surprising part of the study? SF wasn’t in the top ten of cities in the United States. In fact, San Diego, Sacramento, and LA filled out the top 3. Orlando, Miami, and Tampa all came next. San Francisco was ultimately #11 on the list, under New York, San Antonio, and DC.
The problem is across all of America’s largest metro areas, with at least half of Gen Z renters considered rent burdened in the country’s 30 largest cities. Rent burden isn’t new; compared to 2012, 64.2% of millennials were paying 30% or more of their income on rent in SF. Many other cities also have similar percentages for millennials in 2012.
The study considered adult renters who reported paying rent and had a positive income for their analysis. Additionally, they considered Gen Z renters anyone who was born in or after 1997. At the time of the study in 2022, Gen Z renters were people aged 18-25.
Why is paying less than 30% of income on housing a notable benchmark?
It might seem like a random percentage to benchmark housing needs, but it actually goes back to 1969 with the Brooke Amendment. The amendment capped public housing cost at 25% of the renter’s income, and this percentage was then increased to 30% in 1981.
You can read the full findings of the study here to learn more about the methodology and data collected.