Income growth outpaces Houston rental growth – Houston Agent Magazine

Analysis of Houston’s Rental Market and its Alignment with Sustainable Development Goals

Executive Summary: Housing Affordability and Economic Trends

A recent analysis of the Houston metropolitan area reveals positive trends in housing affordability that align with several key United Nations Sustainable Development Goals (SDGs). As of October, income growth has significantly surpassed rental price increases, enhancing the economic well-being of residents and contributing to the development of a more sustainable and inclusive urban community.

• Income Growth: Median household income grew by 3.9% year-over-year.
• Rental Growth: The typical asking rent increased by only 0.2% over the same period, reaching $1,646.
• Rental Concessions: The availability of rental assistance and concessions expanded, with 48.7% of rental listings offering them, compared to 39.1% one year prior.

Progress Towards SDG 11: Sustainable Cities and Communities

The data indicates substantial progress towards Target 11.1, which aims to ensure access for all to adequate, safe, and affordable housing. The Houston market is demonstrating increased sustainability and inclusivity through improved affordability metrics.

1. Improved Rent-to-Income Ratio: A household earning the median income would need to allocate 23.1% of their earnings to afford the typical rent. This figure is well below the national average of 27.2% and the standard 30% affordability threshold, marking a significant achievement in making housing more accessible.
2. Market-Driven Support: The notable increase in rental units offering concessions demonstrates a market response that further supports housing affordability, directly contributing to the stability of communities.

Contributions to SDG 1 (No Poverty), SDG 8 (Decent Work and Economic Growth), and SDG 10 (Reduced Inequalities)

The observed economic trends have broader implications for sustainable development, directly impacting goals related to poverty, economic growth, and inequality.

• SDG 1 (No Poverty) & SDG 10 (Reduced Inequalities): By ensuring that housing costs do not consume a disproportionate share of income, households have more financial resources for other essential goods and services. This trend helps alleviate the financial burden on low- and middle-income families, reducing poverty and mitigating economic inequality within the city.
• SDG 8 (Decent Work and Economic Growth): The robust 3.9% growth in median household income is a direct indicator of a healthy local economy that supports decent work and sustained economic growth for its citizens.

SDGs Addressed in the Article

• SDG 1: No Poverty

  The article connects to SDG 1 by discussing economic vulnerability related to housing costs. It highlights that income growth is outpacing rental growth, which reduces the financial burden on households. When a smaller percentage of income is required for housing, households have more disposable income, which is a key factor in preventing and reducing poverty.

• SDG 11: Sustainable Cities and Communities

  This is the most direct SDG addressed. The article’s entire focus is on housing affordability within major U.S. urban areas (“metros”). It analyzes rental prices, income levels, and the percentage of income spent on housing, which are central themes to creating sustainable and inclusive cities where all residents have access to affordable housing.

Specific SDG Targets Identified

1. Target 1.2: By 2030, reduce at least by half the proportion of men, women and children of all ages living in poverty in all its dimensions according to national definitions.

   The article’s content relates to this target by addressing the economic dimension of poverty. The data showing that a median-income household would only need to spend 23.1% of their income on rent—a figure below the common affordability threshold of 30%—suggests a positive trend in reducing the risk of housing-cost-induced poverty.

2. Target 11.1: By 2030, ensure access for all to adequate, safe and affordable housing and basic services and upgrade slums.

   This target is directly addressed. The article provides specific metrics on housing affordability, such as the typical rent ($1,646) and the percentage of income required to pay it (23.1%). Furthermore, it mentions the increase in “rental assistance” through concessions, which is a mechanism to improve access to affordable housing for residents.

Indicators for Measuring Progress

1. Proportion of income spent on rent

   The article explicitly provides this indicator. It states, “a new renting household earning the median income would need to spend 23.1% of their income to afford the typical rent.” This is a direct measure of housing affordability and can be used to track progress towards Target 11.1.

2. Rate of income growth versus rental growth

   An implied indicator for measuring progress towards poverty reduction (Target 1.2) and housing affordability (Target 11.1) is the comparison between income and rent trends. The article states that median household income grew by 3.9% while rent increased by only 0.2%. This positive differential indicates that housing is becoming relatively more affordable, reducing financial strain on households.

3. Availability of rental assistance/concessions

   The article mentions a specific indicator for efforts to make housing more affordable. It notes that “48.7% of rental units in the city offer concessions, up from 39.1% a year ago.” This percentage serves as a measurable indicator of market-based or policy-driven actions to improve access to affordable housing, relevant to Target 11.1.

Summary Table of SDGs, Targets, and Indicators

Source: houstonagentmagazine.com