A study by The Joint Center for Housing Studies of Harvard University, America’s Rental Housing: Expanding Options for Diverse and Growing Demand, finds growing demand for and an inadequate supply of affordable rental housing in the United States. Forty-three million households live in rental housing as of 2015, an increase of 9 million households since 2005. Only 8.2 million new rental housing units were added to the rental housing stock during this period, resulting in a record number of 21.3 million renter households who spend more than 30% of their income on housing costs.
The number of renters aged 50 and older increased from 10 million to 14.6 million households over the past decade, accounting for more than half of the renter growth. The number of renters between the ages of 30 and 49 grew by 3.1 million, from 14.7 million to 17.8 million households. The number of renters under the age of 30 grew by only 1 million, from 10.3 million to 11.3 million households, as household formation by adults in their 20s slowed since the Great Recession of 2007-2009.
All income groups have seen a rise in renter households. The greatest absolute growth has been among the lowest income households, while the greatest rate of growth has been among the highest income households.
|
Household Income |
# of Renter Households in 2005 |
# of Renter Households in 2015 |
Growth |
Growth Rate |
|
Lowest Quintile |
11,594* |
14,182 |
2,588 |
22.3% |
|
Lower-Middle Quintile |
9,264 |
11,101 |
1,837 |
19.8% |
|
Middle Quintile |
7,174 |
8,718 |
1,544 |
21.5% |
|
Upper-Middle Quintile |
4,532 |
6,181 |
1,649 |
36.4% |
|
Highest Quintile |
2,462 |
3,834 |
1,372 |
55.7% |
*Numbers in millions
The number of cost-burdened renter households spending more than 30% of their income on housing costs increased among all income groups between 2001 and 2014. The number of cost-burdened renter households rose by 2.2 million for those earning less than $15,000, by 2 million for households earning between $15,000 and $29,999, by 1.2 million for households earning between $30,000 and $44,999, by 0.9 million for households earning between $45,000 and $74,999, and 0.2 million for those earning $75,000 or more. The number of severely cost-burdened renters, those spending more than half of their incomes on housing costs, likewise increased for all income groups (see “Fact of the Week” in this Memo to Members).
The lowest income renters had by far the highest percentage of cost-burdened renters, but the share of cost-burdened renters increased for all income groups. From 2001 to 2014, the share of renters earning less than $15,000 who were cost-burdened increased from 80% to 84%; from 69% to 77% for renter households earning between $15,000 and $29,999; from 37% to 48% for those earning between $30,000 and $49,999; and from 12% to 21% for those earning between $45,000 and $74,999. Among the lowest income renters, more than seven out of ten (72%) had severe cost burdens in 2014.
Large shares of low income renter households were cost-burdened in every part of the country, but moderate income renter households earning between $30,000 and $44,999 were much more likely to be cost-burdened in high-cost housing markets, such as the District of Columbia, San Francisco, Los Angeles, and New York than in lower cost markets, such as Detroit and Houston.
The study projects that the number of renters will continue to increase by at least 4.4 million additional households by 2025. The study attributes this growth to new household formation by the millennial generation, strong immigration, and baby-boomer homeowners aging and transitioning to rental units.
America’s Rental Housing: Expanding Options for Diverse and Growing Demand is available at http://bit.ly/1NbLqhf.