Despite attempts from city officials to maintain a healthy inventory of affordable housing options in Detroit, many Motor City residents are devoting a larger share of their paychecks to rent payments than they were just a few years ago. That’s what financial tech company SmartAsset found in a recent report which compares household incomes to rent increases between 2014 and 2017.
According to SmartAsset, the average Detroit household would have to commit nearly 47 percent of its income to live in an apartment at fair market rent in 2017. That constitutes an increase of 9.8 percent percent since 2014, when fair market rent was about 37 percent of the median household income.
With the average household spending close to half of its annual income on rent, Detroit ranked no. 1 on SmartAsset’s list of cities with the largest rent increases as a percentage of income.
“The cause of the rent increases was split between two problems,” says report author Derek Miller. “Large rent increases outpacing substantial gains in come, or stagnant income growth amplifying the impact of small rent increases.”
Detroit falls neatly into the former category, where fair market rent rose by just under 49 percent in three years. While property investors have been able to increase their profit margins in recent years, many tenants in the downtown and midtown areas are struggling to keep up with the sudden increase in rent prices. Ultimately, this trend could force some longtime residents to seek new housing options elsewhere in the city where rent prices remain comparatively affordable.