Finance company SmartAsset recently estimated that the average San Francisco resident pays less than 26 percent of monthly household income toward the rent.
Can that be right? We all know that it’s almost impossible to afford renting in San Francisco anymore. Isn’t it?
As SF Weekly points out, SmartAsset credits the fact that San Francisco’s average income has shot to the moon lately.
Cracking into the same census data that SA used, we find that the federal government pegs the average San Franciscan’s income as just over $78,000/year, and the city’s median rent as just over $1,500/month.
These numbers are much lower than the hot figures reported every month by sites like Zumper and ApartmentList. That’s because the city’s actual median rent includes older leases and rent controlled units whose price aren’t reflected in the current market averages that make headlines.
(Note also that the census lumps San Francisco, Oakland, and Hayward all in with each other.)
Does this correspond with SmartAsset’s 26 percent figure? Actually, no: Crunch those numbers and you turn out a slightly lower number.
But how do we reconcile this with other studies showing how difficult it is for renters these days?
The rental site Abodo, for example, released a study this month about residents of major cities who are rent-burdened—ie, paying more than the prescribed 30 percent of monthly income toward housing.
Although the published version doesn’t mention San Francisco, Abodo spokesperson Sam Radbil tells Curbed SF they found that 48 percent of local households qualify as rent-burdened.
That sounds pretty serious, and doesn’t seem to jive with SmartAsset’s seemingly rosier estimation.
But think about it for a second: Saying that the average San Franciscan pays 26 percent means that slightly less than half of us pay more than that.
And 26 percent is not so far away from a burdensome 30 percent.
Although the two reports still do not quite agree (as different studies almost never do), “The average San Francisco household pays 26 percent of ncome toward rent” and “Nearly 50 percent of San Francisco households are rent-burdened” is two different ways of saying the same thing.
One just sounds catastrophically worse.
A few extra caveats to note: Abodo showed us their full data set of 751,951 renters, of whom only 43 percent report an income of more than $75,000.
This suggests that the median income stat of more than $78K might be getting tugged a bit upward by earners on the extreme high end.
Averages can mislead that way sometimes. After all, ten is the mean of nine and 11, but also of two and 18.
Also consider that the average renter’s income is always lower than the average household income overall. In 2013, for example, the census estimated a citywide median of nearly $75,000, but a New York University study found that for renting households it was just over $61,000.
Long story short: SmartAsset probably isn’t wrong about the rents. And you’re probably not wrong when you say that it’s hard for most people to make ends meet here anymore.
Occasionally, everyone gets to be right, for better or worse.
- Where Incomes Are Rising Faster Than Rents [SmartAsset]
- Average SF Resident Spends 26 Percent [SF Weekly]
- SF Census Estimate, 2015 [US Census]
- SF Median Rent Much Lower Than We Think [Curbed SF]
- Heavy Housing Burdens [Abodo]
- Annual Censure Report 2013 [SF Health Human Services]
- National Rental Landscape [NYU Furman Center]