Rental Housing Costs Rise as Demand Increases Among Working Households
The Center for Housing Policy at the National Housing Conference recently released its annual Housing Landscape 2016 report. It finds that more low- and moderate-income (LMI) working households are renting as opposed to owning their homes, with the share of households who rent increasing from 50.8 percent to 52.6 percent from 2011 to 2014. LMI working households are defined as those with at least one household member working on average at least 20 hours a week and with income at or below 120 percent of the area median income (AMI).
The report finds that the cost of renting for LMI working households increased 6.3 percent between 2011 and 2014, while homeownership costs for LMI working households decreased 5.1 percent. The demand for rental housing has increased substantially as the number of LMI working households who rent has grown from 22.7 million households in 2011 to 24.2 million in 2014. The number of LMI working homeowners has held steady at 21.9 million.
The report also finds that the overall share of working households paying more than half their income for housing costs has declined modestly between 2011 and 2014 due primarily to the decline in the costs of homeownership, as well as modest increases in incomes over the three-year period. Still, housing affordability remains a major issue for a large number of working households, with renters bearing the greatest burden. In 2014, 24.2 percent of all renter households experienced severe housing cost burden, compared to 9.7 percent of all homeowners. The numbers are worse for low- and moderate-income working households: 25.1 percent of working renters and 16.2 percent of working homeowners were severely housing cost burdened in 2014.