The Joint Center for Housing Studies of Harvard University released the latest version of its annual report, The State of the Nation’s Housing 2023. The report combines analyses of data from the U.S. Census Bureau, HUD, Freddie Mac, the National Association of Realtors, RealPage, and other sources to provide a comprehensive snapshot of the country’s housing supply and demand.
The report reveals that, although the rate of growth in rent prices has slowed in early 2023, rents are still increasing and remain well above pre-pandemic levels. As of March 2023, apartment prices were 131% higher than they were ten years prior; rents in professionally managed units jumped by nearly 24% between early 2020 and early 2023 alone. The authors highlight that only 55 affordable units are available for every 100 renter households who earn less than 50% of area median income – a key finding from NLIHC’s 2023 The Gap report. In addition, housing costs comprise a larger proportion of renters’ incomes than ever before. In 2021, a record 21.6 million renters were cost-burdened, defined as spending 30% or more of household income on housing and utilities. Among households with annual incomes less than $15,000, 85% of renters were cost-burdened and 76% were severely cost-burdened (spending 50% or more of household income on housing and utilities). Many low-income renters who were stabilized by pandemic-era protections and financial supports are now at greater risk of losing their homes as those programs come to an end.
Low-income renters face additional threats to their housing security due to a limited and rapidly shrinking supply of affordable rental housing. According to the report, the rental housing market lost 1.2 million low-cost units between 2019 and 2021, impacting nearly every state. During this period, nearly three-quarters of states lost more than 10% of rental units that had contract rents less than $600. This loss was particularly acute in southern states that recently experienced rapid population growth. The authors warn that the stock of low-cost rental units is likely to be further impacted in the coming years by natural disasters and a lack of investment to repair aging units.
Furthermore, the report finds that recent growth in the rental housing supply has been largely driven by construction of an unprecedented number of new multifamily units, the vast majority of which are unaffordable for low-income renters. In 2022, just 5% of new units had asking rents less than $1,050, compared to 22% of units in 2015. Conversion of single-family properties to rental units has also contributed to growth in the rental housing stock and can help diversify neighborhoods that may have been less accessible to renters in the past. However, the authors note that a rising share of these converted units are purchased by large institutional investors, which research suggests are more likely to pursue evictions than other types of landlords. This trend may have contributed to the return of national eviction rates to pre-pandemic levels.
The report advises federal, state, and local officials to implement policies that help alleviate strain on the housing market, such as increasing rental housing subsidies to make available units more affordable to low-income households and passing zoning reforms to lower the development cost of new affordable units. It also recommends proactive measures to preserve the existing housing stock, including rehabilitation of aging units, adaptations for a changing climate, and enhanced accessibility features to support a growing population of older adults. Lastly, the report urges policymakers to continue and build upon pandemic-era programs that help people secure and maintain safe, accessible, affordable housing.
Read the full report at: https://bit.ly/42T6Pqo