It was a wonder he took less than 1 percent of the vote.
Anyway, it turns out McMillan — a perennial candidate for various public offices, a Vietnam War veteran and former postal worker — was right. About 44 percent of American renters, in fact, spent more than 35 percent of their income on rent in 2010, according to a new report released by the Urban Institute this week. (Read the report and use the Urban Institute’s tool to find out if you rank among the growing share of renters paying too much.)
It's a figure some economists watch closely because it is often seen as a larger indicator of household-level financial instability. People have to spend on essentials like food, shelter and transportation, ultimately to the tune of whatever the market demands. When people spend too much on rent, it can make it hard — if not impossible — to do things such as paying for additional education and training and saving for emergencies, retirement or, um, a house.
What's worse is that the number of people spending too much on rent seems to be climbing rapidly. In both 1990 and 2000, about 33 percent of American renters were spending more than 35 percent of their income on rent.
If you need any more grim news, here it is: This problem isn't limited to cities with a notoriously high cost of living. In fact, the problem is most intense in poor communities. So this isn't all about renter preferences and living beyond one's means.
What is going on? Well, a big part of the problem is that American incomes aren't keeping pace with rent, according to the report.
The researchers behind the study acknowledge solutions won't come easy. They suggest that local policymakers in expensive cities work hard to make sure that apartment supply keeps pace with demand and that there's enough affordable housing to meet the actual need in their city. And in those more affordable cities where people aren't clamoring to live or where population loss is a real problem, the researchers suggest that lawmakers take on the even more complicated task of trying to improve residents' economic situations.
Right now, the U.S. tax code virtually heaps benefits on existing homeowners. The rationale here: Governments should encourage homeownership because it's good for communities and families and it's an investment. But that ideal cost the federal government $98.5 billion in 2014, according to IRS data. And the New York Times reported that about 70 percent of that went to people with incomes that put them in the top 25 percent of all earners. This deduction isn't even close to being evenly distributed across the country, a Pew Charitable Trusts study found.
If the rent continues to be so damn high, perhaps Congress might look at a similar tax deduction for renters.