Report Shows Rent is Unaffordable for Half of Renters
Climbing rents have propelled cost burdens to staggering new heights: in 2022, half of all US renters were cost burdened. The number of renter households spending more than 30 percent of their income on rent and utilities rose by 2 million in just three years to a record high of 22.4 million, according to our new report, America’s Rental Housing 2024, released today. Among these renters, 12.1 million had severe burdens, paying over half of their income for housing, also an all-time high.
Rental Markets Cool After Overheating During the Pandemic
Rent growth has almost completely stopped, following historically high rent increases in 2021 and 2022. In the third quarter of 2023, rent growth plummeted for professionally managed apartments to just 0.4 percent, down from 15.3 percent in early 2022. While the slowdown is a welcome change for renters, asking rents still remain well above pre-pandemic levels. And amid market slackening and high financing costs, multifamily starts have fallen sharply in recent months.
Unaffordability Reaches New Heights
The extended period of rising rents during the pandemic put unaffordability at an all-time high. The share of cost-burdened renters rose to 50 percent, up 3.2 percentage points from 2019, and the financial strain has been felt across the income spectrum. Since 2019, cost-burden shares have risen the most for middle-income renter households earning between $30,000 and $74,999 annually.
US Continues to Lose Low-Rent Units and Rents Significantly Outpace Incomes
The country’s dwindling supply of low-rent units has only made things worse. In 2022, just 7.2 million units had contract rents under $600, a loss of 2.1 million units since 2012. Additionally, rent increases are outpacing income gains. In 2022, median rents were 21 percent higher than they were in 2001, while renters’ incomes have risen just 2 percent during the same period.
Record Number of People Are Experiencing Homelessness
As pandemic-era protections and financial supports have largely expired, housing instability is again on the rise. Homelessness has grown, hitting an all-time high of 653,100 people in January 2023. Indeed, the number of people experiencing homelessness jumped by nearly 71,000 in just one year and in 2023, the total number of people experiencing homelessness in unsheltered locations reached 256,610, the highest on record.
Rental Stock Is Aging, and Needs Investments for Climate Risk Mitigation
The rental stock is older than it has ever been: the median age was 44 years in 2021, up from 34 years two decades ago, and nearly 4 million renter households live in physically inadequate units. Additionally, more than 18 million occupied rental units are located in areas with substantial expected losses from weather and climate hazards such as wildfires, flooding, earthquakes, and hurricanes.
Need for Rental Assistance Is Greater Than Ever
During the pandemic, the increased resources demonstrated that financial assistance and supports keep tenants stably housed and landlords solvent. As these resources have expired, however, the housing safety net is once again overwhelmed and underfunded and a larger commitment is required to expand housing supports and preserve and improve the existing affordable stock. Only then will the nation finally make a meaningful dent in the housing affordability crisis making life so difficult for millions of people.