In September 2024, the U.S. Census Bureau published a news release titled “Nearly Half of Renter Households Are Cost-Burdened, Proportions Differ by Race.” Their analysis found that 49.7% of all American renters are spending at least 30% of their income on rent—a threshold commonly used to define “housing cost burden.”
The report also found that 56.2% of Black or African American renter households exceed this 30% threshold, representing about 4.6 million people. For many of these households, rent is the largest and most inflexible monthly expense—leaving less room for food, healthcare, childcare, transportation, or savings. In short: rent often eats first.
But where does this 30% benchmark come from? Who decided that this ratio was a reasonable measure of affordability?
The answer lies in a set of policy decisions that began in the mid-20th century. In the 1960s, economist Mollie Orshansky at the Social Security Administration developed the federal poverty thresholds based on Department of Agriculture food budgets. At the time, American families spent about one-third of their income on food, so Orshansky multiplied the minimum food budget by three to estimate what a “poverty-level” income should be. Around the same time, U.S. housing policy began adopting a similar one-third rule to judge how much a household could afford to spend on housing. The 30% standard was formally codified in federal housing programs in the early 1980s.
While the 30% threshold is still widely used today by HUD and other agencies, critics note that it may no longer reflect the financial realities of modern households. The cost of housing, transportation, and healthcare has far outpaced income growth in many regions, and a flat percentage may not capture the full picture of affordability, especially for low-income households.
For example, in 2025, the federal poverty line for a family of three is $26,650, or about $2,220 per month. With the national median rent at $1,406, that family would be left with just over $800 to cover all other expenses. In such cases, even spending less than 30% of income on housing can result in financial strain.
So what can be done?
Instead of using a fixed 30% calculation, policymakers could evaluate whether households have enough money left over to cover expenses after rent has been paid. This is called “Residual Income Measures,” and it’s a different way of configuring a budget. The system we have now plans on rent eating first. We look at someone’s monthly income and divide that by three to figure an acceptable monthly housing cost. Residual Income Measures looks at what is left over after all other basic necessities have been met.
Additionally, we could localize housing cost burden. For example, rent in San Francisco, California is very different from rent in Little Rock, Arkansas. Because of the difference in localities, affordable housing should be considered within its regional context. Two individuals each making $60,000 in San Francisco and in Little Rock will have very different socioeconomic situations. Taking into account regional differences in calculating housing cost burden could improve our calculations.
Policy solutions for addressing housing cost burden are a different conversation entirely. For example, expanding Section 8 Housing Vouchers could help families who make too much money to be considered “in poverty,” but still navigate daily life with incomes near the poverty line without government assistance. Right now, waitlists are long. Expanding eligibility for housing assistance can fill in some of the gap that exists for families who make too much to qualify but still struggle to cover monthly expenses.
Additionally, lawmakers could incentivize affordable housing development. Increasing the supply of affordable housing can help meet the growing demand for affordable housing. This can be accomplished by zoning reforms and through nonprofit partnerships. Nonprofits often work directly with individuals most afflicted by high housing costs, and can directly connect the people in need to the new affordable housing developments.
In the end, long-term solutions may benefit from integrating housing policy with broader anti-poverty programs. Housing cost burden doesn’t occur in a vacuum. Coupling housing support with wraparound case management has the potential to achieve long-term gains. This could look like a single application or website where an individual can apply for Medicaid, SNAP, TANF, and Section 8 vouchers.