Introduction:

In Argentina, nearly half of tenant households allocate more than 30% of their income to housing-related expenses. However, this measure does not account for the cost of other equally essential needs.

Objective:

To estimate the extent of the rental housing affordability crisis in Argentina during 2017-2018 using a residual income approach, taking the poverty line as a reference.

Methodology:

Using data from the 2017-2018 National Household Expenditure Survey and the poverty line, percentages of tenant households experiencing housing-induced poverty are estimated based on various sociodemographic characteristics and compared to those obtained using the 30% threshold. Subsequently, multivariate logistic regression analyses are conducted to identify which of these characteristics are associated with a higher probability of experiencing financial overburden from a residual income perspective.

Results:

The percentages of households with housing-induced poverty are similar to those estimated using the 30% threshold but show a significantly different distribution according to the sociodemographic composition of households. Tenant households with greater economic dependency, mainly those with children, and/or headed by young individuals, with low education attainment and in low-skilled jobs, are more likely to face affordability problems.

Conclusions:

A residual income approach enables a more accurate analysis of the constraints faced by tenant households by highlighting poverty resulting from housing cost burdens, especially due to high rental costs.

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