Remote Workers Less Burdened by Housing Costs

Generally accepted wisdom holds that a household should not spend more than 30 percent of gross household income on housing costs in order to maintain good financial health. 

However, as of 2019, nearly one-in-three American households spent above this threshold; these 36.5 million households are considered to be “cost-burdened.”

Apartment List examined housing’s cost burden on remote and onsite workers in a new report and found that  onsite workers are 41% more likely to be cost-burdened for housing than those in remote-friendly jobs.

Nationally, it is estimated that roughly one-third of the American workforce are employed in occupations that can be performed remotely, according to the report.

Occupations are classified based on whether we deem them to be compatible with remote work, regardless of whether the individual working in that occupation was actually working remotely at the time of data collection. 

Remote-friendly occupations include software developers, accountants, and office clerks, while onsite occupations include retail salespeople, foodservice workers, construction workers, and teachers. 

Remote-Friendly Occupations Earn 64% More

The median worker in a remote-friendly occupation earns $59,000 annually, 64 percent more than the median for onsite workers ($36,000).

However, the median monthly housing costs of remote-friendly workers is only 24% greater than that of onsite workers ($1,540 vs. $1,242). As a result, workers in onsite occupations are significantly more likely to live in cost-burdened households than their remote-friendly counterparts.

Nationally, 22.2 percent of employed adults who work in jobs that must be performed onsite live in cost-burdened households, compared to 15.8 percent of those working in remote-friendly occupations.

In other words, onsite workers are 41 percent more likely to be burdened by their housing costs. Perhaps even more concerning, onsite workers are 70 percent more likely to be severely cost-burdened (8 percent vs 4.7 percent).

Examining Regional Differences in Cost-Burdened Housing

The San Francisco Bay Area has the biggest gap in cost burden rates between remote-friendly and onsite workers.

Cost burden rates are worse for onsite workers in every market in the US, but there is significant regional variation in both the overall prevalence of cost burden and the magnitude of the gap between onsite and remote-friendly workers. 

The Greater Los Angeles region has the nation’s worst cost burden rates for both remote-friendly and onsite workers. More than one-in-three onsite workers (34.3 percent) in the Los Angeles CSA live in cost-burdened households, compared to 26.6 percent of remote-friendly workers. 

The Miami CSA has the second highest cost burden rate for workers in onsite occupations (34.2 percent), while the San Francisco Bay Area is third. The Bay Area – where remote-friendly tech jobs dominate the local economy – also has the largest gap in cost burden rates between the two groups of workers (29.9 percent vs 18.8 percent). 

The Washington, D.C., New York City, and Denver CSAs also stand out for having the largest gaps between remote-friendly and on-site workers. These are some of the nation’s most expensive housing markets, putting significant financial strain on workers in lower-paid onsite occupations. 

At the other end of the spectrum, lower cost regions such as St. Louis and Cleveland have both less significant cost burden rates, and less extreme gaps between the two groups of workers.