The map of Two Michigans: Renters vs. the rest of us

A new picture of America has emerged that shows a nation where most homeowners can comfortably pay the mortgage while many renters struggle so mightily with their finances that their rent check eats up a majority of their paycheck.
Some 21 million rental households — or about half of all renters– spent more than 30 percent of their income on housing in 2013, according to a report from the Harvard Joint Center for Housing Studies. About 11 million of those households spent more than half of their paycheck on rent and utilities, up 37 percent from 2003, the study found. 
That’s well above the prudent levels that financial advisers typically recommend -- spending less than a third of monthly pay on housing costs. 

The data for southeast Michigan reflects the divide between renters and homeowners across the country. Renters in the six-county area have a median income of $28,800 and pay an average rental rate of $830 a month. Homeowners have a median income of $65,000 yet their housing costs aren’t significantly higher than renters -- $990 a month, on average.

Across Michigan, more than half the renters in a large swath of 19 counties – all of southeast Michigan plus the entire area south of Bay City and east of Lansing – live in the in the financially “burdened” category of the Harvard study – those who spend 30 to 50 percent of their family budget on housing.The people in the “severely burdened” 50 percent-plus category are those with low-paying jobs who deal with high rents in what could be called a “landlords market.” The study found that more Americans are renting than at any time in the last 20 years, which has made it difficult to find a cheap apartment.
Another broad section of scattered Michigan counties have 30 to 50 percent of renters in the financially “burdened” category.
(As someone who spent 50 percent of his household take-home pay on rent as a young, married man, I can tell you that it causes you to worry about paying your bills and shopping for bargains and devising new means of thriftiness in an anxiety-filled, emotionally draining manner.) 

The map tells the story
The map above that includes Michigan outlines this phenomenon. The gray areas are counties where insufficient data is available. The red areas are those counties with 50 percent-plus burdened renters and, on this color-coordinated scaled, the percentages decline into orange and then yellow hues.
At the same time, Michigan’s homeowners are handling their housing costs in a relatively easy fashion. The map below shows that mortgages and other home-related costs comprise less than 30 percent of a family’s budget for the vast majority in the Upper Peninsula, as well as Jackson and Cass counties in the Lower Peninsula.
All across the state, most counties have just 20 to 30 percent of homeowners facing housing burdens.

To get a look at a large, interactive version of these maps, click here.

Perhaps the most interesting aspect of these maps is that we see overlapping geography in Michigan between these two classes of people. Most counties have both homeowners living comfortably and renters struggling to survive.

The study defined homeowner housing costs as mortgage payments, property taxes, insurance, any homeowner association or condominium fees, and utilities. Renters’ costs included monthly rent and utilities.

Homeowners hit a 10-year high

According to a Washington Post story on the Harvard report, falling vacancy rates across the nation have lifted rents, improving the financial performance of rental properties but straining the budgets of millions of households unable to find units.
"The cheapest apartments are being snapped up quickly," the Post reports. "The number of available units nationwide that cost less than $800 a month fell by 12 percent in 2014 from the year before, according to the report. In many metro areas like Washington, D.C., much of the rental housing being created consists of luxury apartments, which come with an unexpectedly higher price tag.

"Middle class families are among those struggling the most. The number of people making between $45,000 and $75,000 who spent more than 50 percent of their income on (rental) housing increased by 72 percent between 2013 and 2003. For people making between $30,000 and $45,000, the number of renters in that position increased by 69 percent.

"But for people with sufficient savings for a down payment, it’s a great time to be a homeowner. About 19 million homeowners  — about one in four — spent more than 30 percent of their income on housing in 2013, the lowest share in a decade."