In previous report, the Economy League monitored rising housing cost-burden in Philadelphia amidst increasing rents throughout 2020 and 2021. Cost-burden is defined as paying more than 30% of gross household income on mortgage or rent.
While the reality of living with housing cost-burden is different for low- and high-income households, it is a useful classification for understanding the effects of the changing housing market across income levels. With the recent availability of the U.S. Census Bureau’s 2021 American Community Survey five-year estimates, we analyze changes in Philadelphia’s housing landscape between 2016 and 2021. Through this comparison, we see the impacts of interventions in the city’s rental market in the wake of the COVID-19 pandemic.
- Between 2016 and 2021, the number of Philadelphia homeowners and renters making more than $75,000 a year increased by more than 9% when adjusting for inflation, reflecting the city’s rising median income.
- Between 2016 and 2021, Philadelphia’s real median income increased from $46,910 to $52,649, indicating that the growing population skewed towards higher-income households or that the existing population experienced increases in their household income levels.
- Between 2016 and 2021, Philadelphia renting households annually earning more than $75,000 increased by almost 34,000 while the number of owner-occupied households earning more than $75,000 increased by nearly 49,000.
- The overall percentage of Philadelphia households facing cost-burden decreased from 29.8% to 26.7% between 2016 and 2021, but the change in cost-burden varied across income brackets.
- Cost-burden rates increased between 2% and 5% for all Philadelphia homeowners annually earning less than $75,000 between 2016 to 2021.
- The overall percentage of Philadelphia renting-households experiencing cost-burden decreased from 51.5% to 48.3% between 2016 and 2021. Yet, like homeowners, the change in cost-burden varied across income brackets.
- Philadelphia’s renting households are far more likely to be experiencing cost-burden than homeowners, especially for households annually earning between $20,000–$50,000.
- Between 2016 and 20201, the percentage of renting households experiencing cost-burden in Philadelphia increased by 13% for households earning between $35,000 and $50,000 and increased by 12% among households earning between $50,000 and $75,000.
- Rising interest rates and ballooning home values in late 2020 and 2021 kept some potential new homeowners out of the real estate market, leading to an increase in the proportion of renters making between $35,000–$75,000 in 2021.
- While there was a significant increase in cost-burdened renting households making between $35,000 and $75,000 in Philadelphia between 2016 and 2021, there was only a small increase in cost-burdened renters with a household income below $35,000 (roughly 4%). This may be due to the various forms of pandemic-related emergency financial aid and assistance provided by both the federal government and the city to the renting households needing the most relief.
To read the full report, go here.
