The Rent Is Too Damn High, Con't

As I've been warning about for months now, corporate takeovers of rental property companies, double-digit rent inflation, NIMBY bans on new apartment complexes, the end of pandemic eviction moratoriums, and the housing crisis pushing both existing and potential homeowners into renting, now means that the renting crisis is upon us and in a bad way.

Rental costs in the US are soaring at the fastest pace in more than three decades, surpassing a median of $2,000 a month for the first time ever and pushing rents above pre-pandemic levels in most major cities. Increases are particularly steep in metropolitan areas that saw large influxes of new residents during the pandemic, but the rental market is sparing almost nowhere and no one.

While the affordability crisis in the US is not new, it has snowballed over the past year as people returned to big cities and some areas short on housing supply saw a boom of new residents. Demand for rentals has soared, with many would-be homebuyers backing out of the market after mortgage rates jumped this year as a result of the Federal Reserve’s aggressive interest-rate hikes.

Tight inventory is leading to bidding wars, typically more a fixture of the homebuying market. Rising costs and a shortage of available units are giving landlords the leverage to hike rents at all price points. And the end of the federal eviction moratorium, combined with dwindling rental assistance, has forced people to make tough choices.

“It’s pretty much the perfect storm for renters right now,” said Kate Reynolds, principal policy associate at the Washington-based Urban Institute. “Those renters and their landlords don’t have a place to turn if they’re unable to pay the rent.”
Inflation Pressure

Many renters, who typically spend a greater share of their income on housing than homeowners, are already struggling to keep up with larger bills at the grocery store and the gas station thanks to inflation running near the highest in four decades. And rent hikes are expected to persistently push inflation higher, since leases are staggered and renters face shocks at different times. Shelter costs account for about a third of the closely watched consumer price index, which increased by 8.5% in July from a year earlier, according to Labor Department data released Wednesday.

People of color and those with lower incomes are the most affected by the increase in rent prices, since they account for the majority of renters. In the US, about 58% of households headed by Black adults rent their homes, along with nearly 52% of Latino-led households, according to a Pew Research Center analysis of census data. In comparison, about a quarter of households led by non-Hispanic White adults, and a little under 40% of Asian-led households, are rentals. Some 54% of renters earn less than $50,000, and the annual median household income among renters is about $42,500, below the national median of $67,500, according to Zillow.

 

And again, this isn't a nationwide focus because it's a problem that primarily affects Black, Hispanic and Asian folks, not white ones, so nobody's going to care.

Certainly we won't see any legislation get past the GOP that would help the tens of millions of American renters facing financial ruin.