Friday, April 29, 2011

Rent Asunder

The housing depression is now leading to millions of Americans being priced out of affordable rental housing just when America needs it most.

The number of renters paying more than half of their income towards rent has hit record levels, according to a new study by the Joint Center for Housing Studies (JCHS) of Harvard University.

Rental affordability is a critical issue for seniors, who live on fixed incomes and already are coping with low yields on their savings, fast-rising healthcare expenses and stagnant Social Security benefits. Yet the struggle with affordability is found most often among low-income Americans; JCHS found that 75 percent of renters in the lowest quartile of income are spending more than half of their income on housing. JCHS also found that lower-middle class renters also are having trouble finding affordable rental housing.

For example, 33 percent of renters with annual income of $14,500 to $30,000 are facing “severe burdens” in finding affordable rent. And the problem is growing most rapidly among demographic groups traditionally less likely to have affordability problems, including younger households, married couples with children and renters with some college education.

“These are astounding numbers,” says Eric Belsky, managing director of JCHS. “If you are spending half of your income on housing, you have very little to spend on everything else.”

Seniors are moving back in with their kids because the rent is, well, too damn high.  And more and more Americans are finding that because mortgage lenders now want up to a 20% down payment on a house, that renting is the only option.  That's driving the demand for apartments up, and that's driving rent up too, in some cases substantially.

Like all housing matters, federal programs and policy loom large in matters of affordable rentals. But federal housing policy hasn’t kept pace with the changing rental market. The most significant existing federal program is the Low Income Housing Tax Credit (LIHTC), which aims to stimulate availability of capital for the purpose of replenishing affordable housing stock. An array of vouchers and other subsidies also help some renters.

But the JCHS study notes that the federal programs are focused mainly on the lowest-income renters, so won’t address the growing need in higher income brackets.

So Americans who are making it now in their apartments are finding a raft of new fees and higher rent to pay, and wages are going down.  You can imagine where this is going next.

No comments:

Post a Comment