By Victor Landa, NewsTaco (1.5 minute read)
Fortune reports that a Zillow study released Thursday found that “In Hispanic communities, about 48% of income goes to the monthly rent check, up from 41% in 2011.”
Let’s put this in perspective. The rule of thumb is that in a healthy household budget one-third of the income should go toward housing. Let’s open this up a little further: “But that rule is currently holding true only for residents of primarily white communities, who pay less than a third—or about 31% of their income—to cover rent, the Zillow report said.”
The problem is three-fold.
On the one hand, the percentage of income that Latino renters pay for housing has increased in the past 5 years, at the same time their wages haven’t kept up. That’s why the slice of their pay that goes toward rent has grown – that and the fact that rent has gone up.
And if Latinos are paying more for rent, they have less to save, if at all, for a down payment on the purchase of a house. This is true while the rate of Latino homeownership is growing – which is evidence of the narrative that Latinos are resourceful: we’ll find ways to make things happen, start a business, make ends meet, move to where the jobs are.
The bootstrap myth
And also, it’s hard to get ahead when you start so far behind. Poverty is self-perpetuating because it lacks opportunity. If you’re making more money and paying less of a percentage on housing your bootstraps are bigger, that’s a fact. When your income is minimal and you pay almost half of it on rent, you have no bootstraps.[Photo courtesy of Zillow]