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53 November 2024 J O U R N A L November 2024 » paper "Subsidizing the Middle: Policies, Tradeoffs, and Costs of Addressing Mid- dle-Income Affordability Challenges." In 2022, more than 14 million renter households could be designated mid- dle-income. While these renters do not face all the hardships of lower-income households, where an incredible 80% of renters had cost burdens in 2022, middle-income renters are not immune from adversity. About 33% of middle-in- come renters were cost-burdened in 2022, up 6.3% from only three years ago. Not surprisingly, cost burdens de- cline as incomes rise: • Some 47% of renters were cost- burdened in the 60%-80% AMI range. • An estimated 28% of renters were cost-burdened in the 80%-100% AMI range. • Roughly 17% of renters were cost- burdened in the 100%-120% AMI range. Geographically, middle-income cost burdens were higher in Florida and the West and lower in the Midwest. (Lower-income households have high cost burdens across the country.) Florida leads with the highest middle-income renter cost burdens at 55%, followed by Hawaii (50%), Nevada (49%), and California (49%). Conversely, only 6% of North Dakota middle-income renters were burdened. Not surprisingly, middle-income renter households with cost burdens had more leftover income after rent and utilities than lower-income renters. The former had about $2,900 in residual monthly income in 2022; even those in the 60%-80% AMI bracket still had $2,500 remaining after housing expenses, while burdened lower-income renters only had $600 a month left over. High housing costs limit middle-income renters' ability to build savings for emer- gencies, retirement, or a downpayment, much less allow them to reach full fi- nancial stability. It is much more dire for lower-income renters, who are forced to make more urgent sacrifices, spending less on food and healthcare just to make the rent each month. By creating a true profile of middle-income renter households, JCHS hopes to reveal their needs and affordability challenges. By definition, middle-income renters have higher earnings and greater earning potential. The national median household income for middle-income renters was at $63,000 in 2022, almost three times the median household income of lower-in- come renters, at only $21,000. Education and ethnicity are also factors. In terms of schooling, 41% of cost-burdened middle-income renter households were headed by someone with a bachelor's degree, compared to 19% of lower-income renters, and middle-income renter households were more likely to be headed by someone in their peak earning years. They were also far more likely to be headed by a non-Hispanic white person than a person of color, possibly compounding racial inequities if households with larger AMI percentages were to receive subsidies. The differences between the two income brackets are noticeable: • Some 51% of cost-burdened middle- income renter households are headed by a white person, compared to 41% of cost-burdened lower-income renter households. • Approximately 22% of cost-burdened middle-income renter households are headed by a Hispanic person, compared to 23% of cost-burdened lower-income renter households. • Roughly 17% of cost-burdened middle-income renter households are headed by a Black person, compared to 24% of cost-burdened lower- income renter households. One problem with many state and local housing programs created to address the affordability challenges of middle-income households is that they target households based on the area's median income. Using this metric, the programs might miss the large major- ity of cost-burdened households with lower incomes. For instance, 9.8 million renters working full time have cost bur- dens, but the number of lower-income renter households with burdens far exceeded the number of cost-burdened middle-income renter households by over 60% (5.8 million households vs. 3.6 million). Even working full time did not guarantee affordable housing, especially By creating a true profile of middle- income renter households, JCHS hopes to reveal their needs and affordability challenges.