Why It Costs More to Rent When You Are Poor
The cost of living is skyrocketing for everyone, but today’s rental market is particularly brutal for people in the lower and middle-income tax brackets. For this reason, some have gone so far as to describe the working class as the “new face of homelessness”.
We recently spoke with experts in the field to get an insider view of the housing market that hasn’t been positively serving the average American family in decades. Here’s what we learned about rent-gauging and poverty profiteering.
Billionaire Landlords and Backpedaling Politicians: Poverty is Currency in 2025
Have you ever felt like you just can’t get ahead? The second your savings account hits triple digits, the car is making a mysterious sound. The moment you garner a decent raise, inflation hits like a tidal wave. You finally land the big promotion, but now you have to spend more on childcare.
If it seems like every corner you cut opens up a financial wall the height of Mount Everest and the depth of the Atlantic Ocean, it’s not your imagination. The poverty tax is as real as rain, and most working Americans are barely weathering the storm. This isn’t just because people are growing increasingly poorer, but also because being poor is becoming increasingly more expensive. To make matters worse, one person’s poverty is another person’s ticket into the billionaire’s club, and the wealth gap is gaping as a result.
“My car has a leaky seal on the transmission. It’d be about $250 to replace the seal and flush the transmission. I don’t have $250, so I keep topping up the fluid and keep driving it because I’ll never get $250 if I don’t get to work. But, in time, that’s going to destroy the transmission, which will be about $1200 to replace,” said username pokey1984 in a now-viral Reddit thread highlighting the real-life price of poverty.
The thread has no shortage of glaring examples — from a woman who spends money on a taxi just to spend even more money washing clothes at the laundromat because her apartment didn’t come with a washer-dryer system, an amenity often reserved for wealthy apartment complexes, to a user paying quadruple prices to rent-to-own furniture.
From payday loans and repossessions to paying more to buy and fix low-quality items, the elongated list of woes seems never-ending. One user was quick to note how expensive it is to have no money at all because then you have to pay overdraft fees at the bank.
All of these examples illustrate the profound truth that poverty is, of itself, expensive. But here’s the kicker: nine times out of ten, that money is going directly into a wealthy person’s pockets and neighborhood, essentially showing that poverty is profitable for people in powerful enough positions to take advantage. Here are the highlights:
- Predatory PayDay Lending Agencies Acquired $2.4 Billion in Fees from Low-Income Neighborhoods — According to the Center for Responsible Lending, predatory lenders made immense profits in 2025 from people who were so strapped for $500 or less that they were willing to borrow at rates as high as 400%.
- Rent-to-Own Companies Make Big Bucks too — Charging poor people $4,150 for a $1,500 sofa.
- Fines and Fees are Big Business for For-Profit Prisons — The Prison Policy Initiative reports that CoreCivic Corporation raked in $911.8 million from federal contracts, and an additional $756.9 million from state contracts in addition to fines and fees in a single calendar year.
Money is Funneled Out of Poor Neighborhoods and Into Rich Neighborhoods Via Predatory Practices. Then, Housing Costs Are Inflated in Low-Income Areas.
According to experts, this flawed aspect of capitalism is causing the middle class to become the working class and the working class to become homeless. Homeless historian and renowned lecturer Dr. Owen Clayton expounded on this concept in an exclusive discussion with Invisible People reporters.
“Capital accumulates power to itself in an increasingly smaller number of hands over time,” Dr. Clayton said. “Karl Marx identifies it as proletarianization. The process causes more people to kind of sink into the lower classes as time wears on, and then the gap between rich and poor gets wider and wider.”
“I think that’s what we’re witnessing right now,” he continued. “There’s a tiny number of impossibly wealthy billionaires. Meanwhile, people who might have been considered middle class in decades gone by are increasingly considered to be working class, and henceforth, people who are perhaps working class are increasingly being driven to a state of almost underclass.”
“For this reason, we see rising numbers of people who are working and are also homeless. It’s a process that is part of a continuum, and it falls right in line within the overall framework of what’s happening in capital globally,” Dr. Clayton said.
Housing, Homelessness, and Crisis: Why Rent’s Going Up Faster for America’s Poor
While much capital is already circulating out of impoverished neighborhoods and into wealthy ones, as billionaire landlords’ portfolios swell, rental rates are going up faster in poorer neighborhoods than they are in rich zip codes. This, again, creates an advantage for the rich that comes at the expense of the poor, and the supply of affordable housing continues to underwhelm the demand for it.
Adding insult to injury, impoverished people tend to have lower credit scores and exhibit higher rental rejection rates, causing them to spend more on application fees than higher earners. The financial burden of moving can force them to remain in housing that might not suit their needs. They are also more likely to be renting in storm-prone areas in buildings with less durable construction. If these unfortunate circumstances create environmental displacement, they are likely to be thrust into a vicious rental market that caters to higher-earning renters and drains them of what little resources they have left.
“As the affordable housing crisis affects more people, demand for affordable housing increases even more,” said Maria Foscarinis, who founded the National Homelessness Law Center, in a recent exchange with Invisible People’s news team.“People who once could afford somewhat more expensive neighborhoods are now also looking for less expensive options, increasing pressure on housing prices in low-income neighborhoods. This means that poorer people, already facing a massive shortage of affordable units, are squeezed even more.”
Talk to Your Representatives About Making Housing a Human Right
We have reached a tipping point in our economy, a time when upward mobility is a thing of the past and the prospect of homeownership is slipping through our fingers. Talk to your representatives about addressing the affordable housing crisis by drafting laws that make housing a human right.