The Joint Center for Housing Studies (JCHS) at Harvard University released a new report, America’s Rental Housing 2022, on January 21. The report finds that the rental housing market rebounded in 2021, resulting in low vacancy rates and increased rents, while many low-income renters continued to suffer from income and employment losses stemming from the pandemic. Some low-income renters remained behind on rent. Unprecedented federal housing supports, however, mitigated the worst housing outcomes for many low-income renters. The report highlights the need for the federal government to revitalize the housing safety net and expand the supply of affordable rental housing in the face of continuing challenges.
According to the report, demand for rental housing increased, vacancy rates dropped, and rents climbed between 2020 and 2021. Renter households increased by 870,000 between the first quarter of 2020 and the third quarter of 2021, while the overall vacancy rate dropped to 5.8%. This vacancy rate was the lowest observed since the mid-1980s. Rents grew across all market segments in the professionally managed rental stock, especially in the highest-quality segment, where rents increased 13.8% in the third quarter of 2021. Rents in the highest-quality segment were driven in part by recent growth in the share of higher-income renters. While the rebound was most pronounced in the highest-quality market segment, rents still increased 4.3% year-over-year for lower-quality units in the third quarter of 2021.
The report also highlights how lower-income renters were far more likely to struggle with housing costs leading into the pandemic. One million rental units affordable to households with incomes at or below $30,000 were lost between 2018 and 2019. By 2019, lower-income renters accounted for 62% of all renter households paying more than 30% of their income on rent and 86% of renter households paying more than 50%. Thus, lower-income renter households were already in a housing crisis before the pandemic.
The housing impacts of the pandemic reverberated into 2021. The report finds that, although most renters stayed current on rent, 15% were still behind on rent in the third quarter of 2021 and a quarter reported lost employment income in the previous month. These impacts were most acute for the lowest-income renters. Twenty-three percent of renter households earning less than $25,000 were behind on rent compared to just 5% of households with incomes over $75,000.
The report notes the important role of federal interventions – such as the CARES Act and Centers for Disease Control and Prevention (CDC) eviction moratoriums, unemployment insurance, economic impact payments, and emergency rental assistance – in mitigating the worst housing outcomes during the pandemic. Citing data from Eviction Lab, the report shows that eviction filings dropped by 40% at the beginning of the pandemic and remained 40% below average in November 2021. Eviction filings increased after the CDC moratorium ended, but not by as much as expected. The report attributes the lower-than-expected increase in eviction filings to a combination of emergency rental assistance, income supports, and landlord flexibility.
JCHS cites these emergency housing supports as evidence of the federal government’s power to address housing instability for renters, while also underlining the need to invest in the capacity of state and local governments to administer housing programs. There remains a longer-term need to expand the supply of affordable housing to address structural inequities facing lower-income renters in the housing market.
The report can be found at: https://www.jchs.harvard.edu/americas-rental-housing-2022