A report by Harvard University’s Joint Center for Housing Studies revealed that the number of cost-burdened renters in the US reached a record high due to declining affordability nationwide. The report stated that there were 21.6 million cost-burdened renter households in 2021, increasing by 1.2 million from pre-pandemic levels in 2019, marking the highest level since 2001.
Although the percentage of cost-burdened renter households was seen to be declining, the pandemic reversed this trend with 49% of renter households becoming cost-burdened in 2021, inching closer to the peak of 51% during the Great Recession-era in 2011.
The rise in the number of cost-burdened households during the pandemic was driven by households that spend more than half of their income on rent, known as “severely” burdened households. According to the report, 11.6 million US households fall into this category in 2021, an increase of 1.1 million households from 2019.
The Struggle for Low-Income Households in the US Housing Market
The annual “State of the Nation’s Housing” report by the Joint Center for Housing Studies highlights the challenges that many households with lower incomes face due to high housing costs. The report shows that these households may struggle to pay for other necessities like food, clothes, and healthcare, which have become more expensive as inflation has risen.
In 2021, the median renter and homeowner households with incomes under $30,000 had just $380 and $680 per month, respectively, after paying for housing to cover other necessities — the lowest residual incomes in two decades. This situation affects renters with low incomes and Black and Hispanic renters more, according to the report.
Spending too much of one’s income on rent can have dire consequences, leaving already-vulnerable households with little wiggle room for emergencies. Rent-burdened families may be at higher risk for eviction and homelessness. A 2018 study sponsored by Zillow found homelessness to increase faster in communities where renters spend 32% or more of their income on housing.
Although “overall homelessness has remained steady”, the report shows that unsheltered homelessness has worsened. It is crucial to address this issue to ensure affordable and safe housing for all Americans.
Housing Challenges Persist in the US
Despite some recent progress, the US still faces significant housing challenges, according to a recent report. The nation’s affordable housing programs are struggling to keep up with the demand, leading to a significant housing shortage. Additionally, pandemic-era programs have expired, resulting in rising housing insecurity and homelessness.
The existing housing stock is also a concern, as investment is needed to meet the needs of an aging population and address climate change. Meanwhile, racial segregation and inequities continue to persist.
While rents surged earlier in the pandemic, the rate of growth has slowed considerably. However, many renters are still facing higher prices compared to pre-pandemic levels. Increasing costs of homeownership mean that some may struggle to make the transition from renting to owning.
Unfortunately, lower-income tenants may face particular difficulties, as new housing construction has been geared towards high-end buyers. The number of affordable units for low-income households has also diminished in recent years.
Despite some promising developments, more resources are needed at all levels of government to address these persistent housing challenges.
The Decline of Low-Rent Housing
According to recent reports, the affordable housing market has experienced a significant decline in the last decade. In total, 3.9 million units with contract rents below $600 have disappeared from the market. Furthermore, this loss has been accelerating with a decline of 1.2 million units between 2019 and 2021 alone, bringing the total to 8.0 million units. This worrying trend highlights the need for increased action and investment in affordable housing projects.
