• Rent burdens for many workers in fully in-person jobs, including teachers and nurses, have remained largely unchanged over the past five years, even as rent prices have grown significantly. 
• However, only a small share of rental homes in many large markets are priced low enough to allow teachers and nurses to keep rent burdens where they are now. 
• On average, these rental homes are smaller and older than typical rentals in each market. Older homes may increase the likelihood of living in unhealthy or unsafe conditions.

First, the good news: Millions of the nation’s essential workers — the teachers, nurses, retail workers and more that can’t work remotely and remain tethered to a given location to do their jobs — are finding ways to afford rent and keep their housing costs manageable. But simply affording the rent and surviving is not the same as thriving, and very often the only affordable homes that are available are smaller, older and/or farther-flung, bringing challenges of their own. 

The pandemic and associated Great Reshuffling — the ongoing shift in how we view the relationship between our homes and our work, school and leisure lives — has given millions of renters the opportunity to telework and seek more-affordable homeownership opportunities elsewhere in the country while still keeping their current job. But not all occupations can be done remotely, and millions of renters in many essential occupations may not have the same opportunities to move into homeownership and realize its many financial and social benefits. 

Zillow examined the ways in which those renters working in occupations that require them to be physically present at a given location — nurses at a hospital or clinic, teachers at a school or retail workers at a shop — are able to keep rent payments affordable. We found that:. 

• Merely affording rent does not mean renters are always living in ideal situations. 
• Workers in many occupations are able to keep their typical rent burdens manageable — but they do so by living in smaller, older rental units. 
• This varies widely based on income levels between metro areas. 

Typically, we consider rent affordability in terms of how much of its income a given household spends on rent each month. Once that share exceeds 30%, a household is considered “housing cost burdened,” with limited funds left after paying rent to afford other necessities like gas, food and clothing. But even if a household is succeeding in keeping its rent burden below this 30% threshold, that doesn’t always paint the most accurate picture of the realities renters are living in. An analysis of American Community Survey data and Zillow rental data shows that many U.S. renters are making ends meet by living in smaller, older homes. And previous research shows that older rentals more often come with more health and safety risks. Merely “affording” rent doesn’t mean these renters are thriving.

Hard Lessons

With the start of the new school year, the vast majority of U.S. school districts are currently operating at least partially in-person, meaning most teachers are back in the classroom with less ability to move to more affordable places than their fully remote peers. The good news is that the typical teacher nationwide spends 22.2% of their income on rent, well below the 30% threshold. But in order to keep their rent burden low, teachers are renting smaller, older homes that are less likely to be single-family dwellings. 

In Milwaukee, for example, renting teachers spend only about an eighth (12.6%) of their income on rent, but the rentals available to them to keep their burden that low are typically 86 years older than the typical rental available on the market. In Raleigh, where the typical teacher rent burden is 14.6%, the typical teacher apartment is 452 square feet smaller than the market median. Teachers in Hartford, Conn., currently pay 12.9% of their income on rent — and would need a raise of $3,136 per month in order to afford the typical local rental unit (priced at $1,604) without increasing their rent burden. Instead, they typically live in units that are 339 square feet smaller and 24 years older than the area’s median, and in units less likely to be single-family homes that might provide more space and privacy for a growing family. In 36 of the top 50 metros analyzed, less than 10% of single-family rentals are affordable for teachers at their current rent burdens. 

In Atlanta, less than 1% (0.9%) of ALL available rentals are affordable for teachers at their current burden – a stark contrast to the 37.4% of rentals that are affordable in San Jose. While San Jose might have much higher rent prices than Atlanta, local teacher incomes in Silicon Valley are much higher — $5,833 per month, compared to $3,949 in Atlanta. But that isn’t the full story. In San Jose, teachers typically contribute 42% to a given household’s total income, compared to 61.7% in Atlanta. Teachers in San Jose, then, are living with either more people or higher-income roommates/partners in order to keep their rent affordable, while teachers who rent in Atlanta make the majority of the income in their households. This is all to say that there are many ways that teachers in markets nationwide are spreading themselves thin just to lower their rent burdens. 

An Unhealthy Situation

Nurses, who are similarly limited in their ability to work remotely, face similar disparities in the type and number of rentals they afford. Nationwide, nurses typically pay 18.5% of their income on rent. To afford the nation’s typical rental unit (priced at $1,874/month as of August) without increasing their rent burden, they would need a $1,389 per month raise. Instead, like teachers, they are finding smaller, older rentals. 

The differences in what is being afforded versus what the typical rental looks like in an area are wide in some cases, and smaller in others. In Portland, the typical home rented by a nurse is fairly similar to the area’s median — just 111 square feet smaller, on average, and actually two years newer. Portland nurses typically spend 17.3% of their income on rent, and could theoretically afford almost two-thirds of the available rentals on the market. But in Boston, where nurses spend 14.2% of their income on rent, only 2.7% of rentals are affordable. And the ones that are affordable are typically 365 square feet smaller and 33 years older than the median available Boston rental. 

Minimally Acceptable

Finally, those renters working in occupations that are more likely to pay minimum wage are particularly constrained on the types of rentals they can afford. Food service workers and retail workers have much less-desirable rentals available to them at their current level of affordability. But the level of a given area’s local minimum wage can play a significant role in the rental opportunities lower-wage occupations have. 

In both Seattle and Denver, where the local minimum wage is significantly higher than the national baseline, retail workers can afford around 15%-16% of available rentals without exceeding their current rent burdens. And in Denver, food service workers can afford 11.7% of available rentals. But these workers are still only able to afford smaller, older rental units — and are likely living with several roommates and/or higher-paid roommates or partners: In both markets, food service and retail workers only earn between 37%-43% of their typical total household income. 

One way for communities to ease price pressures on renters is to make it easier to create new inventory, including relaxing zoning restrictions. Basic supply and demand is the primary driver of growing housing costs, so increasing the supply of affordable housing types can help meet demand. Zillow research has shown that even modest densification could exceed what is likely needed to meaningfully slow housing price growth over the long term, which could help these essential workers start thriving, instead of merely surviving.

Methodology

The rent affordability metrics were produced using the Nowcasting methodology explained in this document. 

Rent burdens are based on individual incomes and shares of rent calculated by taking the median share of total household income that is from the individual working in the occupation and assuming that share is the same share of rent that the individual pays. Then using individual income, we derive the individual rent burden. The raise needed to afford the typical Zillow Observed Rent Index (ZORI) rent is based on the above, assuming the individual pays the same share of the ZORI rent and has their current rent burden. The difference in individual income needed and what is observed is calculated as the raise. This assumes that no other income in the household changes, only the individual in the occupation’s income. 

The rental inventory data is from Zillow’s rental listings as of August 2021. 

Occupations were derived from and grouped based on the 2019 American Community Survey. Some examples of the jobs included in each occupation group are:

• Teacher – elementary and middle school teachers, secondary school teachers, special education teachers, tutors, other teachers and instructors
• Nurse – registered nurses, nurse anesthetists, nurse practitioners, and nurse midwives
• Food Service – fast food and counter workers, waiters and waitresses, food servers – non-restaurant, dining room and cafeteria attendants and bartender helpers, dishwashers, hosts and hostesses, restaurant, lounge, and coffee shop workers, food preparation and serving related workers
• Retail – cashiers, counter and rental clerks, parts salespersons, retail salespersons