How much should you spend on housing?

(Photo by Will Dendis)

How much should one spend on housing? The most common figure given by government officials and housing groups is no more than 30 percent of one’s income. But where did that figure come from?

According to “Who Can Afford To Live in a Home?: A look at data from the 2006 American Community Survey” by Mary Schwartz and Ellen Wilson of the US Census Bureau, the figure’s origin lies in the National Housing Act of 1937, which created the public housing program. To qualify, a tenant’s income could not exceed five to six times a unit’s rent. In 1940, 20 percent of one’s income was set as the maximum rent that would be paid under the program. Increased administration for public housing costs helped boost that number to 25 percent in 1969 and 30 percent in 1981, where it has been ever since. As for the rationale, “the 30 percent rule was deemed a rule of thumb for the amount of income that a family could spend and still have enough left over for other non discretionary spending.”

Households that spend more than 30 percent of their income on housing are termed by public policy groups as “cost-burdened” that “may have difficulty affording necessities such as food, clothing, transportation, and medical care,” according to the Department of Housing and Urban Development.


By that metric, 55.7 percent of renters in Ulster County are cost-burdened and 30.3 percent are “severely” cost-burdened, meaning they spend half or more of their income on housing.

The question of what’s affordable has arisen in discussions over the Kingstonian, a large mixed-use project proposed for Uptown Kingston that would include 143 apartments. Project opponents have made the case that tax breaks shouldn’t be given to a project containing “luxury” apartments, but developers say units — starting at $1650 for one-bedroom and $2200 or two-bedroom — are affordable when compared with the median income for the area.

A document entitled “Fiction vs. Fact” posted to, asserts: “The most recent 2018 data shows that the median household income in Kingston is $63,889. Using 30 percent as the rent to income factor the median household can afford $19,166 per year or $1600 per month.”

But is the overall median income a good metric for determining affordable rents? That depends on whether most prospective local tenants for the Kingstonian currently own their own homes or rent. If they’re homeowners, then their median income in 2018 was $78,914, making the Kingstonian rents easily affordable by the less-than-30-percent metric. But if they’re renters, that group’s median income is $34,730. Using the 30 percent number again, the median renter shouldn’t spend more than $868.25 a month.

Incidentally, that number is in the range of the expected rent for the Kingstonian’s 14 “affordable” units, which “will be rented at a combination of 60 to 110 percent of AMI and are currently estimated to be $475 to $875 for a studio and $774 to $1064 for a one-bedroom unit.”

The “Fiction vs. Fact” document concludes this section by noting: “It is also important to point out that the Kingstonian rental rates shown are comparable with those of existing apartments in the area.” Is this the case? A look at the rents at some of the other market-rate apartment complexes in Kingston reveals the Kingstonian would be more expensive, but not by huge margin:

  • Dutch Village, 500 Washington Ave.: One-Bedroom $1500; Two-Bedrooms: $1700 to $1900
  • Chestnut Mansion, 160-180 W Chestnut Street: One-Bedroom: $1500 to $1700; Two-Bedroom: $1800 to $1950.
  • Orchard Hills: One-Bedroom $1350 to $1425; Two-Bedroom $1500 to $1725

In any case, none of the local apartment complexes offered one-bedroom units that would be affordable for a household with one income at the median for a renter, though there are options for two persons with two incomes sharing a room or a two-bedroom apartment.

There is one comment

  1. R. Martin

    Are any of the three examples included in this piece asking for a 25-year PILOT, closing a public street and receiving millions of dollars in grant funding for their market housing project?

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