Key Point

Almost 1 in 2 renters in our community report spending more than the recommended 30% of their income on housing costs.

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Let’s Break It Down

On top of that, more than 1 in 5 homeowners are spending too much on housing.

The guideline according to the Department of Housing and Urban Development (HUD) is that a person should not spend more than 30% of his or her income on housing. The “30% rule” helps us to understand the affordability of both rent and mortgages. In our community, 44% (50,520) of renters spend 30% or more on housing costs. Of those who own their own home, 22% (48,884) spend more than 30% on their home and related costs.

Why Does It Matter?

To afford a one-bedroom apartment, a renter in our community would need to make almost $14 an hour.

When a person is spending more on their housing, they may have to make choices about delaying or not paying other bills, buying food, or even ensuring they have heat, water, and electricity. These choices can impact the overall health, stability, and well-being of the household.

While our community is often considered an affordable place to live, a closer look at rental costs shows that it’s not true for all. The Housing and Urban Development's (HUD) 2016 Fair Market Rent (FMR) for a two-bedroom apartment is $836 for the Omaha-Council Bluffs area (this includes utilities). In order to spend no more than 30% of income on rent and afford two bedrooms, an individual must make $2,784 per month, $33,804 per year, or $17.39 per hour working 40 hours per week. Even to afford a one-bedroom apartment with a FMR of $666, an individual must make $28,829 annually or $13.86 per hour (before taxes).

The state minimum wage is $9.00 per hour in Nebraska and $8.75 in Iowa which means that quality, affordable housing is still out of reach for many. In the Omaha-Council Bluffs metro, 102,272 (30%) households make less than $35,000 per year.

 

How Do We Compare?

While homeowners are faring better than the national average, renters are slightly worse off.

Overall, the rate of Omaha-Council Bluffs metro homeowners paying less than 30% on their housing is lower than the national rate of 27%. However, 50% of renters in Douglas County are spending more than 30% of their income on housing, compared to 48% nationally. Since 2010, the percentage of both homeowners and renters paying more than 30% for housing in the metro area has slightly decreased. Homeowners went from 24% to 22% in 2014. Renters went 46% to 44% in 2014.

Data Source: American Community Survey 2014 5-Year Estimates Table B25106 & S1901 (geographic area includes the Omaha-Council Bluffs MSA, which includes Douglas, Sarpy, Cass, Washington, Saunders, Pottawattamie, Mills & Harrison Counties).

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