TRENTON, N.J. – A Moody’s study found that the average American household is rent burdened, defined as spending 30% or more of their income on housing costs, for the first time in history. New Jersey has had this problem for years.
“This 30% is a symbolic threshold, a milestone,” said Thomas LaSalvia, the director of economic research at Moody’s.
Last week, Assemblyman Christopher DePhillips advocated for renters on the Assembly floor, providing them thousands of dollars in long-term relief to pay rent. His proposal would have saved the average renter of a one-bedroom unit $3,450 this year and two-bedroom unit renters an average $4,408 this year. Renter savings would increase annually.
That is based on rent for a one-bedroom unit increasing by 33% to $2,396 per month from $1,803 in the past year, and a two-bedroom unit increasing 38.5% to $3,061 from $2,210, according to a report by rent.com.
“The rent-to-income ratio continued to climb up because income growth was not able to catch up with the rent growth,” said Lu Chen, a senior economist at Moody’s Analytics.
DePhillips advocated for renters’ property tax deduction, which is considered 18% of rent in New Jersey’s income tax code, to increase to 30% – in line with accepted standards of rent-burdened households. His proposal would save renters $135.5 million by the Office of Legislative Services’ highest fiscal estimate. Providing far more benefit than any other proposal in the legislature at a fraction of the cost.
“We can’t let people end up on the streets,” exclaimed DePhillips. “The state has an ability to help people keep a roof over their heads. It seems purely partisan to me that Democrats haven’t provided significant long-term relief to renters based on widely accepted standards of what is affordable for the average person.”
DePhillips’ bill, A1148, has been around for two and a half years, but Democrats have unanimously rejected his push for it multiple times.
“Affordability is supposed to be a nonpartisan issue. I won’t stop trying to help people who need it, despite partisan politics preventing people from getting the help they need,” attested DePhillips.