Dear Landlords in Billings: Single People Can’t Afford Your Units
Dear Rental Owners/Management Companies in Billings,
I understand that owning and maintaining rental properties can be costly, but charging exorbitant prices for apartments is not a sustainable or fair solution. The cost of living in Montana is already high, thanks to the mass migration from other states during COVID, and many residents are struggling to afford basic necessities, let alone housing.
By charging too much for your rentals, you are pricing many residents out of the housing market and contributing to the affordability crisis in our state. This not only affects low-income families and individuals but also middle-class renters who are struggling to make ends meet.
I urge you to consider the impact that your rental prices have on the community and to be more mindful of the economic realities of the residents in Montana. There are many resources available to help you understand the cost of living in our state and to make informed decisions about rental prices.
Breaking it down
For example, the "Average" salary in Montana for 2023 is $57,551 (according to Zip Recruiter) pre-tax per year. Breaking that down, after tax, comes in around $1,739 every two weeks. Add-in health insurance (Around $120 every two weeks), dental ($16/two weeks), vision ($3/two weeks), 401k (5% of Gross Pay = $120 every two weeks)... and exclude Disability insurance, life insurance, FSA & HSA... you're left with $1480 every two weeks.
$2960 take home for a single person at that pay rate a month SOUNDS great, doesn't it? It isn't. The average rental for a 1 bed 1 bath/studio in Billings (that is not income restricted) is around $850 a month, plus utilities... if you can find one for that price. It's more likely you will have to shoot for a much more expensive unit, as they are more widely available, taking that upwards toward $1100 a month, plus utilities.
The running rule is "your rent/house payment should be no more than 1/3 of your income". At $1100 a month, plus utilities, you're looking around $1250/$1300 a month. Still, not bad, but it does not leave much room. Groceries are around $300 a month to eat well, but you can get by for $150-$200 a month. A car payment, these days, will run you at least $350/month plus insurance... so let's say $450 a month for that. Internet? $50/month. Cell phone? $45 a month.
Where are we at so far?
Grand total so far? $2145, leaving you with $815 for the month. And that is just the minimum for the average person, not including gas, basic necessities, unforeseen expenses, etc.
Round all that up, and let's say for all those extras, that is another $300 a month.
Revised total? $2445. And you can put away $500 a month in the savings account, netting you $6000 a year.
$60,000 in 10 years.
And by retirement (62 at the earliest, starting at age 20) you'd have around $240,000 in your bank account... if everything stayed the same price.
What's my point?
The job we calculated all this from was the "average" for Montana. The majority of jobs do not pay anywhere near that. Let's take a more reasonable job, paying $42,000 a year. That comes down to $1,327 every two weeks. $2,654 a month. Minus everything? $209 a month in savings, living fairly reasonably.
If everything stays the same, you'd have... drumroll please... $105,336 in savings by the time you are 62. Making it impossible to retire, as your savings would run out in... about 3 years and 9 months.
So... landlords, and not widely loved rental companies... Take this with a bit of consideration, as you are raising housing costs for those in our community. I also encourage you to work with our local government and non-profits to help address the affordable housing crisis in Montana. Together, we can find solutions that benefit everyone in our community. Rather than continue to price out those who have been here, supporting the community and YOU, for many years.
What are your thoughts? Is your rent outrageous? Let us know on AppChat or Facebook.