The formula to calculate Rent Burden (RB) is:
\[ RB = \left( \frac{R}{I} \right) \times 100 \]
Where:
Let's say we have a Monthly Rent Payment (R) of $1200 and a Monthly Income (I) of $4000. Using the formula:
\[ RB = \left( \frac{1200}{4000} \right) \times 100 = 30\% \]
So, the Rent Burden (RB) would be 30%.
Rent burden refers to the financial strain a person or household experiences when a large percentage of their income goes towards paying rent. The U.S. Department of Housing and Urban Development defines rent burden as spending more than 30% of one’s income on rent. Those spending more than 50% are considered severely rent burdened. This can lead to difficulty in affording necessities like food, clothing, transportation, and medical care.
