American renters are facing a double whammy of weak income growth and rising rents that is creating “severe affordability problems,” according to a new report Monday.
Titled “America’s Rental Housing: Evolving Markets and Needs,” the report was issued by the Harvard Joint Center for Housing Studies.
“More than ever before, the private market struggles to provide decent housing that is affordable for people of even modest means,” said a press release that accompanied the report.
One report finding: Half of US renters pay more than 30 percent or more of their income on rent, up 12 percentage points from a decade earlier.
Another finding: The share of Americans that rent has increased from 31 percent in 2004 to 35 percent in 2012. In fact, the 2000s marked the strongest numerical growth in renter households in the last 50 years.
As fewer Americans can afford to buy a home, demand for rental housing has increased, causing rents to rise, the report said.
In a statement, Eric Belsky, managing director of the Harvard Joint Center for Housing Studies, said: “The gravity of the situation for the large proportion of renters spending so much of their incomes on housing is plain. We are losing ground rapidly against a chronic problem that forces households to cut essential spending. With little else to cut in their already tight budgets, America’s lowest-income renters with severe cost burdens spend about $130 less on food each month, and make similar reductions in health care, clothing, and savings. And while many choose longer commutes to lower their housing costs, the combined cost of housing and transportation means even less remains for other expenses.”