On December 9, the Joint Center for Housing Studies at Harvard University released a new study that shows that 35% of U.S. households were renters in 2012. America's Rental Housing: Evolving Markets and Needs also shows that half of U.S. renters now pay more than 30% of their income on rent, up 12% from a decade earlier. Renters with severe cost burdens (paying more than 50% of income on housing) account for much of the increase.
In 2011, about 83% of renters with incomes below $15,000 were cost burdened, the majority of whom paid more than half their income on housing. Three-fourths of renters with incomes between $15,000 and $30,000 were cost burdened. According to the authors’ analysis, the number of cost burdened renters with incomes below $15,000 rose by 2.5 million between 2001 and 2011, while the number with incomes of $15,000 to $29,999 increased by 1.8 million. Meanwhile, higher-income renters also increasingly faced affordability challenges. Forty-four percent of renters earning $30,000–$44,999 were cost burdened, and so were 20% of renters earning $45,000–$74,999.
The authors point out that rising rents and declining renter incomes were the primary factors causing severe affordability problems. With surging demand for rental units, rents increased by 6% in real terms between 2000 and 2012. However, real median renter income fell by 13% during this period, creating a wide gap between rents and renter incomes.
Another factor contributing to affordability problems is the inadequate supply of rental housing for very low income renters. According to the report, new housing units tend to serve the higher end of the rental market; only 34% of new units had rents below $800, a rent that is affordable for the median renter in 2011. At the same time, affordable housing units, priced under $400, were lost at twice the loss rate across the rental market overall between 2001 and 2011.
The report emphasizes that rental housing assistance is essential to the poor, but the share of income-eligible renters able to access limited rental assistance is down to the lowest point in years. The authors urge policymakers to ensure that a discussion about the need to expand housing assistance and the supply of affordable housing is not lost in the federal budget debate.
View America's Rental Housing: Evolving Markets and Needs at: http://www.jchs.harvard.edu/americas-rental-housing