New Jersey ranks among the worst in the nation for homeowner and rental costs with more than one-third of residents spending at least 30% of their incomes on housing, a new study published by researchers at Harvard found.
In addition, nearly 1 in 5 New Jersey residents spend at least half of their income on rent or homeownership costs - an amount deemed a “severe” cost burden by the Joint Center for Housing Studies at Harvard University study.
Renters fared far worse in the study than homeowners. More than 27% of renters reported spending at least half of their income on housing.
New Jersey ranked eighth worst in the nation for housing affordability behind six other states and Washington, D.C.
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The problem in housing is complicated, but can partially be attributed to the kinds of units being built, experts said.
“We don’t build starter homes anymore,” Priya Jayachandran, the CEO of the National Housing Trust, said in a presentation on the report. “And so what we really rely on for affordable housing is that existing housing stock because when we build new we tend to build luxury housing.”
More renters who earn between $40,000 and $75,000 are spending at least one-third of their incomes on monthly housing costs, the study found. That’s jumped from 15% of renters at that income level a decade ago to 40%, said Chris Herbert, the managing director of the Joint Center for Housing Studies.
That makes it even more difficult for those renters to save to become homeowners, Herbert said.
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Nationwide, just under a third of all residents are considered cost-burdened by housing, the study found. But the percentage varies widely by state.
Florida ranked worst for renters with 31% paying more than half their incomes on rent.
California ranked worst for homeowners with 14.9% spending more then half of their incomes one housing.
South Dakota ranked as the best location for both renters and homeowners with the fewest residents in both categories spending more than half their incomes on housing costs.
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Katie Kausch may be reached at kkausch@njadvancemedia.com. Follow her on Twitter @KatieKausch.
