Report Finds Tight Rental Markets, Rising Cost-Burdened Households
Harvard’s Joint Center for Housing Studies (JCHS) recently released its annual “America’s Rental Housing 2020” report. The new report shows that rental markets are still extremely tight despite slowing demand and the continued strength of new construction. The JCHS report finds vacancy rates at the lowest level since the mid-1980s and rents continuing their climb for the seventh year straight.
The report also points out that the country is at risk of losing some of its subsidized affordable housing stock. According to JCHS tabulations of the National Housing Preservation Database, the affordability restrictions on 935,000 subsidized rentals could expire by 2030. This includes 529,000 LIHTC and 266,000 project-based Section 8 units. In five states—Montana, North Dakota, Oregon, South Dakota, and Wisconsin—contracts could expire on more than a quarter of subsidized units with end dates. These projected losses far surpass losses in recent years, which the report estimates at less than 50,000 from 2014 to 2018.
The report also points out that cost-burdened households are on the rise again. After three years of modest declines, the number of renters who are cost-burdened (paying at least 30 percent of income for housing and utilities) edged up in 2018. According to JCHS, one in four renters is severely cost-burdened, spending more than half of their income on rent. The report finds that this cost burden is rising among middle-income households. The largest jump in cost-burdened households has been among middle-income renters earning between $30,000 and $44,999 annually, with their share up 5.4 percentage points from 2011 to 2018 to 55.7 percent. Renter households earning between $45,000 and $74,999 also saw an increase at 4.3 percentage points to a share of 27 percent.
The consequences of being cost-burdened are debilitating for lower-income households. After paying rent, the median renter earning less than $15,000 in 2018 had just $410 left on average each month to cover all other necessities, including food and medical care.