A new report from the Harvard Joint Center for Housing Studies reveals a stark reality: in 2022, half of all U.S. renters were burdened by the cost of their housing. The study, titled "America’s Rental Housing 2024," shows a dramatic increase in renters spending over 30% of their income on rent and utilities, surging by 2 million in three years to a high of 22.4 million. Among them, a record 12.1 million are severely burdened, paying more than half of their income for housing.
Pandemic's Aftermath: Easing Rent Increases
After a period of steep rent hikes in 2021 and 2022, the market is showing signs of cooling. The third quarter of 2023 saw rent growth for professionally managed apartments plummet to a mere 0.4%, a significant drop from the 15.3% peak in early 2022. While this deceleration brings relief to renters, rent levels still hover substantially above those seen before the pandemic. The report also highlights a sharp decline in new multifamily construction, attributed to slowing market dynamics and high financing costs.
Unprecedented Rent Burden Across Income Levels
The Harvard study underscores a troubling trend: the proportion of renters facing cost burdens has escalated to 50%, up 3.2 percentage points since 2019. This financial strain is widespread, impacting renters at various income levels. Notably, middle-income households earning between $30,000 and $74,999 annually have seen the most significant increase in cost burdens since 2019.
Scarcity of Affordable Housing Exacerbates Issue
The U.S. continues to face a severe shortage of low-rent housing units. The study finds that in 2022, there were only 7.2 million units with rents under $600, down 2.1 million units from 2012. Compounding the issue, rent increases have significantly outstripped income growth; median rents in 2022 were 21% higher than in 2001, while renter incomes rose a mere 2% in the same period.
Homelessness Hits Record High
The expiration of pandemic-era protections has led to a worrying increase in homelessness. In January 2023, the number of homeless individuals reached a record 653,100, an increase of nearly 71,000 in just one year. The number of unsheltered homeless people also reached a record high of 256,610 in 2023.
Aging Rental Stock and Climate Risk
The report also sheds light on the aging state of the rental housing stock, with the median age of rental units reaching 44 years in 2021, up from 34 years two decades ago. Nearly 4 million renter households are in physically inadequate housing. Moreover, over 18 million rental units are located in areas prone to significant weather and climate hazards, highlighting the need for investments in climate risk mitigation.
Urgent Need for Enhanced Rental Assistance
The study concludes with a call for increased rental assistance, noting that the pandemic-era financial support was critical in maintaining housing stability. With these resources now depleted, the housing safety net is overburdened and underfunded. The report argues for a more significant commitment to expand housing support and improve affordable housing stock to address the deepening affordability crisis.
