Rent Affordability Calculator

Where the 30% rule for rent comes from

The idea that rent should take about a third of what you earn did not begin as advice. It began as policy. When Congress passed the Brooke Amendment in 1969, it capped rent in public housing at 25% of a tenant's income. A 1981 change raised that cap to 30%, and the number stuck. Over the decades that followed, 30% became the figure that lenders, housing agencies and landlords quote when they ask whether a rent is affordable.

The Department of Housing and Urban Development still uses those lines as its measuring stick. A household paying more than 30% of its income on housing is counted as cost burdened, and one paying more than 50% is counted as severely cost burdened. The most recent figures HUD publishes show that as of 2023 about 22.6 million renting households spent more than 30% of their income on housing, and 12.1 million of those crossed the 50% line.

That makes 30% a starting point rather than a law of nature. It was written for one program in one era, and there are plenty of good reasons your own number should land above or below it.

How HUD defines cost burden and severe cost burden

HUD's two lines are easy to remember, and they have been stable for decades.

• Under 30%. The household is not counted as cost burdened. In HUD's data this is what affordable means.
• Over 30%. The household is cost burdened, meaning housing takes a large enough share of income that other needs get squeezed.
• Over 50%. The household is severely cost burdened, meaning housing takes at least half of everything coming in.

Two details decide which side of those lines you fall on, and both of them trip people up.

The first is which income counts. HUD uses gross income, meaning what you earn before taxes and before anything else comes out. If your paycheck shows $5,000 a month before tax and lands at $3,900 after it, then $5,000 is the number HUD divides by.

The second is which housing cost counts. HUD measures gross rent, which is the rent itself plus the utilities you pay yourself, not only the check you hand the landlord. Leave the utilities out and you understate your own burden, sometimes by several percentage points. HUD lays out these affordability measures in plain language in its guide to defining housing affordability.

Contract rent versus gross rent, and why utilities matter

Landlords and rental listings quote contract rent, which is the money that goes to the landlord each month. HUD's measure adds the utilities you pay on top. The gap between the two is small for an apartment where heat and water are included, and large for a house with electric heat and an air conditioner.

Household B is the instructive one. Its contract rent sits at 38.2% of income, which anybody using the 30% rule loosely might wave through. Fold in the $180 of utilities and it reaches 42.9%, closer to the severe line than to the 30% target.

Household D shows the reverse. Rent alone at 22.6% looks comfortable, yet once $250 of utilities joins the calculation it is at 26.6%, and one rent increase of $200 would push it past the line.

Ask what the previous tenant paid for heat, electricity and water before you sign anything. If the landlord will not say, call the utility company for the average at that address. A number you estimate beats a number you forgot to count.

Worked example: $5,000 a month with $150 in utilities

Here is the case loaded into the calculator above, walked through step by step.

• Gross income: $5,000 a month, which is $60,000 a year
• Contract rent: $1,500 a month
• Utilities: $150 a month

Rent alone is 30.0% of income, so this household sits exactly on the standard line. The 30% ceiling is $1,500.00, which is precisely the rent, leaving no slack at all.

Add utilities and the picture shifts. Rent plus utilities is $1,650, which is 33.0% of gross income. Under HUD's own measure this household counts as cost burdened, even though plenty of people would call a $1,500 apartment on a $60,000 salary sensible.

The two ceilings say it all. You can afford $1,500 if the landlord covers every utility, and $1,350 if you pay $150 of them yourself. Across twelve months that difference is $1,800, which is why the utilities field in the calculator is not optional.

The severe line sits much further out at 50% of income, which is $2,500 a month. Rent would have to jump by $1,000 before this household reached it.

Where the 30% rule breaks down

One percentage applied to every household in the country has predictable weak spots.

It is measured against money you never see. Thirty percent of gross income is a bigger share of what reaches your bank account. Someone earning $5,000 a month gross may take home closer to $3,900 after federal tax, state tax and FICA. Renting at the $1,500 ceiling means paying 38.5% of take-home pay, which is a different decision from paying 30%.

It bites hardest at the bottom. A household earning $2,000 a month has a $600 ceiling, and in most markets $600 does not cover a decent one-bedroom plus heat and power. Whatever comes after rent has to fit inside $1,400.

It is generous at the top. A household earning $20,000 a month has a $6,000 ceiling, and few people need to spend that much to live comfortably. Above roughly the middle of the income range the rule stops binding and becomes a budgeting choice instead of a constraint.

It ignores everything else you owe. A $700 student loan payment, a $450 car payment and $900 a month of child care change what you can afford far more than any housing formula does. A full budget split handles those better than a single housing percentage.

It ignores where you live. In expensive metros rents run above 30% of a middle income for nearly everybody, so following the rule to the letter can mean moving an hour away. That move costs fuel, time and tolls, and those belong in the calculation too.

What the 30% ceiling looks like at different incomes

This table is the quickest way to check a listing without doing arithmetic. Find your income on the left, read across, and compare the middle column with what the landlord is asking.

Look at how narrow the useful gap is. At $4,000 a month the difference between the rent-only ceiling and the ceiling that leaves room for utilities is $150 a month, which is one utility bill. That is the margin separating affordable from cost burdened for millions of households, and it is why asking about utilities before signing matters more than negotiating $25 off the rent.

What being cost burdened costs over a year

Running the rule backwards is more practical when you are looking at apartments rather than at your income.

Now stretch it over twelve months. Rent of $1,500 a month is $18,000 a year, and with $150 of utilities it is $19,800, which is close to a third of a median household income in much of the country. Running ten percentage points above the 30% line on a $5,000 monthly income costs an extra $500 a month, or $6,000 a year. That is roughly what a decent used car costs, and it is the difference between a budget that breathes and one that does not.

Nationally, HUD counted 22.6 million renting households above the 30% line as of 2023, including 12.1 million above 50%, figures it tracks in its annual performance plan. The U.S. Census Bureau publishes the rent side of the same picture through the American Community Survey, whose survey results on renters and homeowners are the source of most of the rent figures quoted in housing reports.

How to use the number when you are apartment hunting

A percentage only helps if you turn it into a decision. This order works well in practice.

1. Add up household gross income. If two people sign the lease, count both incomes before tax, then check whether one of you could cover the rent alone if the other stopped working.
2. Get a utilities number. Ask what the last tenant paid, or ask the utility company for the average at that address. Leave it at zero only when every utility is included in the rent.
3. Add what rides along. Renters insurance runs about $15 to $25 a month, parking can add $75 to $250 in a city, and internet often costs $50 to $80.
4. Leave room for the increase. Rents rise at renewal. If $1,500 is the absolute limit, aim for $1,400 so next year's bump does not put you in trouble.
5. Check the damage to everything else. Run the total through a full budget split and see what is left for savings and debt payments.

Treat the result as a guardrail rather than a verdict. A household at 34% with no debts, a ten-minute commute and a funded emergency account is frequently better off than one at 26% with a $700 car payment and nothing saved. This page gives you an estimate for planning, not financial advice.