by Terry Featherstone

Created on: December 23, 2011   Last Updated: December 26, 2011

Rent to income ratios are not unjust in themselves. Landlords have every right to make sure that a prospective tenant will be able to afford not only the rent but all the other living expenses as well. The most common rent-to income ratio is 1:3. Landlords expect that a tenant's monthly salary is equal to or greater than three times the rent.

The problem happens when landlords set an arbitrary rent and then require the tenant to make three times the arbitrary rent. When the ratio is used to deny housing because the rent itself is unjust, then the ratio is also unjust. The intention of the ratio is a tool to evaluate the tenant's ability to pay given a fair market rent. Many landlords redefine fair market as whatever a tenant is willing to pay.

Many landlords choose to believe that tenants have the same free choice about renting as they have about any other purchase. For example, buyers generally have free choice about buying a book. They can freely choose which book to buy, or they may decide not to buy any book. If too many buyers decide not to buy, the store goes out of business.

Rent is not like buying a book. In communities with lots of decent rentals available, tenants will naturally choose the best value for the money. The rental market competition will put pressure on landlords to not only maintain their rentals, but also charge a reasonable rent. However, in some communities, decent rentals, especially fairly-priced one, are scarce. People must put a roof over their heads. They are forced to pay whatever the landlord asks, and accept crummy housing to boot.

It is pretty obvious that in a community where the typical tenant earns $15/hour, the typical one-bedroom costing $$1300 is way over priced. There are tenants living in such communities. It requires at least two wage-earners to afford a one-bedroom. The typical tenant cannot qualify for even the typical studios which rent for about $1000. Nevertheless, these crummy rentals get tenants anyway. Either landlords do not enforce the ratio, or employers certify a higher income than actually received, or there is an additional (possibly unknown to the landlord) tenant.

The HUD has determined fair market rental values for every zip code in America. You can root around on their web page to find yours (http://www.huduser.org/portal/datasets/fmr.html). Fair warning: it is easy to find fair market rents per county or metro area. You might have to do some serious digging to find the zip codes, but they are there. Once the landlord has set a fair market rent, it is entirely reasonable for landlords to assure themselves that the tenant can afford it.

It is possible to argue that the ratios are unjust because it is the tenant's responsibility to rent a place he can afford, and if the tenant want to pay a bigger percentage of his pay as rent, well let him. In such a case, the landlord must be willing to take the risk. Most aren't.

Learn more about this author, Terry Featherstone.
Click here to send this author comments or questions.