Renters Face Affordable Housing Crisis, Harvard Housing Study Reports
- Dec 09, 2013
Washington, D.C.—Renters are spending more of their monthly incomes on housing than ever before. A major need exists for new rental buildings with affordable apartments. And though newly built rental units surged in 2012, rental completions remain below average annual levels over the previous decade.
These are among findings of the 2013 America’s Rental Housing study, released today, by Harvard University’s Joint Center for Housing Studies (JCHS). The release event at Washington, D.C.’s Newseum was headlined by Secretary of Housing and Urban Development’s Shaun Donovan.
One finding of the study is that the rental burden has never been higher. Half of renters spend more than 30 percent of their monthly income on housing. What’s more, between a quarter and a third (27.3 percent, or 11.3 million American renters) spend in excess of half of their income each month on housing.
Along with these findings, the study also reports a pressing need exists for new rental buildings with units available at affordable rates. The oldest rental units are primarily single-family detached homes or in two- to four-unit buildings, 44 percent of them constructed prior to 1960.
Most markets nationwide have seen lower vacancies, increased rents and higher construction levels, all indicators of a widespread rental housing recovery. When the homeownership boom was at its zenith, more than 40 percent of new multifamily units were for-sale residences. But the rental market recovery has sent the share of multifamily units built as apartments to more than 90 percent.
Along with that recovery has come an increase in the number of Americans who rent, up from 31 percent in 2004 to 35 percent last year. Most of the new demand for rental housing was met by the transition of three million units, most of them single-family homes, from owner-occupied to rental housing stock.
Meeting the demand for new apartments has been difficult. Multifamily permitting has accelerated in two-thirds of the 100 largest metros. While newly constructed rental units rebounded to reach a total of 186,000 last year, rental completions remain significantly below the previous 10 years’ annual levels.
Finally, the study authors report that “broad demographic trends, from the aging of the population to the increasing importance of minorities for household growth, will have profound impacts on housing demand for years to come.”