The Joint Center for Housing Studies of Harvard University on June 16 published its report on The State of the Nation’s Housing 2021. Amid the recovery of the U.S. economy, housing inequalities persist. Those with stable jobs throughout the pandemic were able to build wealth through reduced expenses and cash infusions from the federal government, while those who lost employment income struggled to stay afloat. Among renters, 53% reported a loss in income since the beginning of the pandemic, and at least 17% of all renters were behind on rent by early 2021.
The report summarizes pre-existing inequalities that shaped how the pandemic impacted households. In 2019, there were significant racial disparities in median renter household income, with white renters making $45,000 compared to Hispanic renters making $42,000 and Black renters making $32,100. Similar disparities exist in median net wealth: white renters have $8,300 in median net wealth, compared to $6,000 for Hispanic renters and $1,830 for Black renters. These disparities are nowhere near those between renters and homeowners; homeowners had a median wealth of $254,900, 40 times the $6,270 median wealth among renters.
Despite a decade of economic expansion, the share of rent burdened households fell only 4 percentage points from 2011 to 2019. Forty-six percent of renters spent more than 30% of their income on rent in 2019, with 24% spending more than 50% of their income. While it comes as no surprise that the lowest-income renters face the highest cost burdens—over 80% of renters making less than $25,000 were cost burdened in 2019—58% of those making between $25,000 and $49,999 were also rent burdened. Among all renters, racial disparities exist, with 54% of Black renters and 52% of Hispanic renters being cost burdened, compared to 42% of Asian and white renters.
These trends are especially worrisome in light of the disparate economic effect that renters have faced during the pandemic. One in four renters earning less than $25,000 were behind on rent as of early 2021. When disaggregated by race, 29% of Black renters were behind, compared to 21% of Hispanic, 18% of Asian, and 11% of white renters who had arrears. This metric does not capture households who used savings, credit, or money borrowed from friends and family to cover rent. Among renters who had fallen behind, 17% believed eviction was very likely within the next two months.
Examining the rental market, the authors found that construction was not deterred by the pandemic, despite an initial slowdown: multifamily housing completions hit 375,000 units in 2020, the highest annual total since 1989. The rental vacancy rate in urban neighborhoods grew from 7.2% in the first quarter of 2020 to 9.6% in the first quarter of 2021, while in suburban neighborhoods, the vacancy rate decreased from 7.2% to 6.0%. However, in the market for moderate- and lower-quality apartments, no significant change in vacancies occurred during this time, with the market remaining tight for both. While rents for the highest-quality units fell during the pandemic, rent continued to increase for moderate- and lower-quality homes, albeit more slowly than before the pandemic.
This report finds a substantial need for investment in the existing housing stock. The median age of the housing stock in the U.S. was 41 years in 2019, up from 34 years in 2007. This problem is compounded by the prevalence of disasters stemming from climate change. In 2020, the U.S. experienced 22 billion-dollar disasters (in addition to the pandemic). The authors argue that the American Jobs Plan, which would allocate $213 billion to construct, preserve, and retrofit two million housing units, is essential to addressing these needs.
Read the report at: https://bit.ly/3cMTVDw
Interactive charts and maps, a data appendix, and supplementary material are available at: https://bit.ly/3vyrDmK