Whether owned or rented, housing is often people’s top monthly expense. Falling behind on housing payments can lead to severe consequences ranging from a damaged credit score to eviction. What is less clear is how the monthly pressure to pay for housing relates to the ability to pay for other basic needs, such as food and medical care.
Renters have it worse than homeowners
Let’s compare rates of material hardship—difficulties paying for housing, utilities, food, and medical care—among working-age owners and renters. Most young renters face difficulties meeting basic needs, regardless of whether they rent or own a home.
Even after accounting for key socioeconomic differences, such as education, age, employment, and income, renters are more likely than owners to report trouble paying for at least one of these basic needs.
Renters face greater financial uncertainties than homeowners, making them more vulnerable to hardship.
Low-income renters struggle with savings even more. At the same time, a percentage of renters experienced a large and unexpected drop in income during a year compared to homeowners.
Homeownership is no guarantee against hardship
Though they generally fare better than renters, low-income homeowners also struggle to cover living expenses. Nearly half of homeowners earning less than Kes 100,000 face difficulties meeting basic needs. In contrast, only one in five homeowners earning at or above Kes 100,000 report any hardship.
Much like renters, low-income Kenyan homeowners face the greatest hardship with non-housing-related living expenses, including costs related to medical needs and food.
Although low-income homeowners struggle with paying for food and more than one in four have unmet medical needs because of cost or struggle to pay medical bills, fewer than one in ten high-income homeowners have the same problems.
Housing at what cost?
Regardless of whether they rent or own their home, Kenyans experience significant material hardship struggle to meet non-housing-related basic needs and to save for financial emergencies. Multiple kinds of research suggest that families are forgoing other basic needs just to maintain a roof over their heads.
Although the affordable housing initiative would increase funding for rental assistance programs and reduce barriers to housing construction, safety net programs for renters are in jeopardy, and supports for low-income homeowners are limited.
Moreover, growing evidence that resource-strapped families face impossible decisions and trade-offs when paying for housing and basic needs like food and medical care every month. Weakening the housing safety net would only increase material hardships they already experience.