Housing Renters Being Squeezed Harder: Report
The incidence of severe housing cost burdens among working renter households has risen for the third consecutive year, according to the newest edition of the Center for Housing Policy (CHP)’s annual Housing Landscape report.
Housing Landscape 2013 explores the latest American Community Survey data from 2011, showing 26.4 percent of working renters spent more than half of their household income on housing costs. Although the incidence of severe housing cost burdens stayed relatively stable for working homeowners between 2008 and 2011, roughly one in five working homeowners experienced severe housing affordability challenges throughout this period, despite falling home prices and mortgage interest rates.
Rents Up, Incomes Down
The share of working renter households with a severe housing cost burden grew over the three-year period, due primarily to falling incomes and rising rental housing costs. Nationally, working renters saw their housing costs rise by 6 percent from 2008 to 2011, while their household incomes fell more than 3 percent.
Lead report author Janet Viveiros says renters are stretched so thin by growing housing costs that many face impossible choices.
“The growing rate of severe housing cost burdens among renters is not a new trend, but it is clearly an unsustainable one,” said Viveiros. “While rental costs have steadily risen over the last few years, wages for these working families have not fully recovered from the hit they took between 2008 and 2009. Spending most of your paycheck on rent means cutting back on other necessities, including health care and even food.”
Rising Rental Demand
Coauthor Maya Brennan noted the causes of rising housing cost burdens among working renters include a difficult economy and an increased demand for rental housing, partly due to the crisis on the homeownership side of the market.
“While the economy pushed both owners’ and renters’ incomes down, the shift away from homeownership is pushing rents up due to increased demand. What we’re seeing with the rental market is not explainable by population trends alone—it clearly reflects the movement of former homeowners into rentals as well as delays in home purchases by current renters,” Brennan explained. “But this increase in rental demand has not been matched by an increase in supply. This imbalance leads to rising rents in markets across the country.”
Working homeowners may have dodged the upswing in housing costs that hit renters, but they have not avoided the effects of falling incomes. In fact, while housing costs among homeowners fell some 3 percent over the study period, household incomes among these homeowners fell even more than they did for renters, down more than 4 percent over the three-year span.
Source: Center for Housing Policy