A report by New York University’s Furman Center and Capital One titled Renting In America’s Largest Metropolitan Areas shows that growth in the rental housing stock in the 11 largest metropolitan areas in the U.S. has not kept pace with the growth of the renter population. Rental markets have tightened, leading to overcrowded units and higher rent burdens, especially for the lowest income renters.
The rental housing stock increased in all 11 metropolitan areas between 2006 and 2014. Atlanta (26% growth), Dallas (25%), Houston (28%), Miami (27%) and Washington, DC (24%) had greater growth in their rental housing stock than the national growth rate of 18%. Six of the eleven metropolitan areas saw the addition of more single-family rental units than multifamily rental units. Across all metropolitan areas single-family units accounted for nearly 60% of the increase in rental units.
The growth in the renter population outpaced the growth in the rental housing stock, resulting in a decrease in vacancy rates in all of the metro areas except Miami. The mismatch between supply and demand led to rising median gross rents in both the suburbs and the central cities of all the metropolitan areas from 2006 to 2014, with the only decrease occurring in the Miami suburbs. Rents increased faster in the central cities than in the suburbs in all 11 metro areas except for Dallas and Houston. The most significant increase in rents occurred between 2013 and 2014. All of the study’s metropolitan areas except Los Angeles, New York and Washington, DC experienced annualized rent increases of less than 1% between 2006 and 2013.
In 2014, the majority of renters in eight of the 11 metropolitan areas were cost-burdened, spending at least 30% of their income on housing. At least one-quarter of renters in seven of the metropolitan areas were severely cost burdened, spending at least half of their income on housing. In all 11 metropolitan areas, more than half of the lowest income renters (25th percentile of income) were severely cost-burdened. The size of the average renter household also increased, with more people doubling and tripling up due to higher rents and a lack of affordable and available units.
Rent affordability was particularly challenging for recent movers. The median income renter could afford only 35% of the rental units that became available 2014, down from 38% in 2006. Only four metropolitan areas saw an increase in the share of recently available units affordable to median income renters between 2006 and 2014. The situation was worse for the lowest income renters. In 2014, these renters in all 11 metro areas could afford only 10% of the recently available units.
The report uses data from the American Community Survey from 2006 to 2014.
Renting In America’s Largest Metropolitan Areas is available at http://bit.ly/1M54Lhv.