Rent burden

Rent burden is the share of a household's income that goes toward rent. It is usually calculated as gross rent, rent plus utilities, divided by household income, and is reported for renter households specifically rather than the housing market as a whole.

rent burden = gross rent / household income. In the United States, government agencies such as HUD and the Census Bureau commonly label a household "cost-burdened" when this ratio exceeds 30%, and "severely cost-burdened" above 50%; other countries use similar thresholds, but the exact cutoff is a policy convention rather than a fixed economic law. This differs from the broader housing affordability index, which typically models a hypothetical mortgage on a median-priced home rather than measuring what renters are actually paying.

Rent burden is a core indicator in housing policy and is tracked alongside median household income, vacancy rate, and the house price index to assess local housing market pressure, and rising rent burden is often an early signal used in displacement risk models. A common pitfall is comparing rent burden across areas without accounting for cost-of-living differences: a 30% burden in a low-cost area and a high-cost area do not represent the same standard of living, and using gross income rather than after-tax income can also overstate how much discretionary income a household actually has left.