By Ellen McGirt
March 30, 2017

New data from Zillow, the real estate and rental marketplace site, shows black and Latinx people are spending more of their money on rent than they were even a few years ago. That, combined with comparatively sluggish wage growth, adds up to what Skylar Olsen, a senior economist for Zillow, calls an “affordability crisis.”

Fortune breaks it down: “In 2016, it took about 44% of income to make rent in predominantly black communities, up from 40% five years earlier,” according to the report Zillow released Thursday. “In Hispanic communities, about 48% of income goes to the monthly rent check, up from 41% in 2011.”

People in primarily white communities are spending closer to 31% of their income on rent. Here’s where the math gets even trickier: The average income for households in black neighborhoods has increased about 2.9% over the last five years, compared to a 5.4% rise in white communities.

Affordability is a serious issue. When you’re spending almost half your income on rent, you’re not saving for emergencies, career development, retirement, let alone for a down payment on a house. And the zip codes in question, all highly segregated, often lack the investment and amenities that make for truly happy neighborhoods. That is, until, gentrification comes to call. As people are displaced, it becomes increasingly unlikely that a young professional of color can afford to live near desirable employers in bold faced towns like San Francisco, Manhattan or Austin.

But affordability is not the only issue in play.

Last year, the New York Times analyzed 2014 census figures and found that income alone can’t explain why neighborhoods remain so segregated in the U.S.:

“The choices that black families make today are inevitably constrained by a legacy of racism that prevented their ancestors from buying quality housing and then passing down wealth that might have allowed today’s generation to move into more stable communities. And even when black households try to cross color boundaries, they are not always met with open arms: Studies have shown that white people prefer to live in communities where there are fewer black people, regardless of their income.”

Of course, this raises many broad questions about history, equity, and the systemic barriers that have shaped communities for generations. But what about the up-n-coming account executives who came in through your diversity outreach? What do they really need to succeed? Would flexible working arrangements help them with their long commutes? What about specially-tailored financial programming? Do they believe that their bosses, who probably live in upscale white-flight neighborhoods, understand who they are?

For employers, who are increasingly focused on retaining “diverse” employees, the questions this affordability crisis raises should hit close to home.


You May Like