Effective Rent

Posted on Thursday 20 October 2005

John catches the Boston Foundation in one doozy of an instance of press-release policy writing.

The Greater Boston Housing Report Card… put out by The Boston Foundation, would have you believe that there are people spending 80% (or more) of their income on rent. The report’s authors misuse data to draw inaccurate conclusions.

He lists a few reasons that the effective rents are not in the 60%+ range: many renters have smaller spaces than 2 bedrooms, display-advertised rents are higher than actual rents, and students and those in public housing have low income yet get assistance in rentals. The odd thing is that the offending table (on page 32) reveals that advertised rents relative to neighborhood median income have gone down in most every part of the city. Actual rents went down, too.

The problem is that while the broad measure of "effective rent" (taking those measures that John rightly objects to) has use in tracking the change over time, if you want to measure how much of their income people pay for rent - or to be more precise how much that marginal renter will be expected to pay to join the rental market - you actually have to take some measure of the renters’ situation themselves, through surveys or the like.

It’s a shame because it’s quite possibly true that people in the city and/or the Boston metro area do pay a higher share of their income for housing than in other parts, but touting 84% figures makes the Foundation look like a bunch of alarmists.


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