Yea...its never made sense to me to base it on gross income because thats not available money to you. But maybe they say that because some of the income withholdings are of our own doing like how much you contribute to IRA or pensions via your employment (if you're lucky enough to work for someplace that still does that).
I dont like to include utilities in what the housing cost should be. Mainly because most places you live (apts or your own home) you pay for those utilites anyways. Apts didn't used to be that way, but they are these days. And in some places you even have to supply your own appliances (CA pretty much now you have to bring your own fridge with you for example). But even renting in an apt I still have to pay my own water, trash, sewer and electric and gas. So thats just expenses you take with you where ever you live. So to me...the ideal ratio for your housing cost should probably be like 28% of your net income. But I still find even that number impossible for single income earners...or especially folks on disability either through age or disability, or our younger disabled vets, etc.
