One of the COVID-19 pandemic’s biggest impacts on the labor market has been the remarkable shift to working from home. While working from home is not new, the U.S. has never seen remote work at the current scale. A recent Gallup poll from the fall shows that a whopping 58 percent of U.S. workers were working remotely at least part of the time, yet many lacked sufficient space at home to do so effectively.
Having a dedicated home office can help remote workers be more productive, and sizing up to an apartment with space for a home office may be worthwhile for workers who plan to continue working remotely. However, depending on rent prices and income, renting a larger space is more affordable in some cities than others. According to income data on renters from the U.S. Census Bureau and rent prices from the Department of Housing and Urban Development (HUD), sizing up to an apartment with an additional bedroom costs about 9 percent of monthly income, on average.
An obvious advantage of working from home is not commuting, which saves valuable time and money. Data from HUD shows that commuters who drive the entire way to work spend a median of $242 each month on commuting costs. Carpoolers and those who take public transportation spend less—$132 monthly at the median—while those who drive part of the way (while also using another mode of transportation such as public transportation, walking, or cycling) spend the least at $110 per month. According to fair market rent data from HUD, the median monthly cost of an additional bedroom in the U.S. is $317, meaning upgrading to a larger apartment could be close to cost-neutral for workers in more affordable areas with long and expensive commutes.
Due to geographic differences in rent and median earnings, it is more feasible to rent an additional bedroom in some places than in others. Sizing up is most affordable in the Midwest. In Wisconsin and Nebraska, an additional bedroom costs $215–$220 per month, or just 6.6 percent of monthly income for renters. Sizing up is least affordable in California and Hawaii where adding a bedroom costs an additional $531–$672 per month, or 11.2 and 13.3 percent of income, respectively.
To find the most affordable locations to size up for a home office, researchers at Filterbuy analyzed the latest data from the U.S. Census Bureau’s 2019 American Community Survey and the Department of Housing and Urban Development (HUD). The researchers ranked states according to the cost of an additional bedroom as a percentage of renter income. Researchers also calculated median monthly rent for a 1-bedroom, 2-bedroom, 3-bedroom, and 4-bedroom apartment.
The analysis found that the median monthly income for renters in Texas is $3,632. The median cost of sizing up for an additional bedroom is $318 per month, or about 8.7% of the median monthly income in Texas. Out of all states, Texas is the 17th least affordable to size up for a home office. Here is a summary of the data for Texas:
- Additional bedroom cost as a percentage of income: 8.7%
- Median monthly cost for an additional bedroom: $318
- Median monthly income for renters: $3,632
- Median monthly rent: $937 (1-br), $1,143 (2-br), $1,523 (3-br), $1,890 (4-br)
For reference, here are the statistics for the entire United States:
- Additional bedroom cost as a percentage of income: 9.0%
- Median monthly cost for an additional bedroom: $317
- Median monthly income for renters: $3,540
- Median monthly rent: $1,053 (1-br), $1,293 (2-br), $1,723 (3-br), $2,005 (4-br)
For more information, a detailed methodology, and complete results, you can find the original report on Filterbuy’s website: https://filterbuy.com/