As millions of families succumb to foreclosures, and the recession takes it toll on family incomes, the cost of renting has begun to rise for many, adding even more pressure on those most vulnerable to even tiny changes in their monthly costs.
A recent report by Harvard’s Joint Center for Housing Studies underscores this pressure. In 2010, 10.1 million individuals—more than one in four renters—were paying more than half of their income to rent and utilities, an all-time high. Simultaneously, those spending 30-50% of their income on rent and utilities rose from 20.5% to 26.2% over the last decade. In other words, nearly half of all renters now face at least moderate housing cost burdens.
As “America’s Rental Housing: Meeting Challenges, Building on Opportunities” notes, maintaining an adequate supply of affordable rental housing is important because nearly all Americans rent at some point in their lives. While renters reflect the diversity of the nation, they are more likely to be young, single, and low-income, which makes them particularly sensitive to increases in housing costs.
These often more vulnerable groups are also more likely to live in older, less well-maintained, overcrowded, more precarious housing. BRR network member Rolf Pendall, along with Brett Theodos, and Kaitlin Franks, find in their BRR working paper, “Vulnerable People in Precarious Housing,” that the most vulnerable individuals (minority, immigrant, older, disabled, poor, least educated, for example) are more likely than the average person to live in precarious housing and to pay a much greater portion of their income for housing.
Even before the recession, in 2005-2007, about two-fifths of people in single-parent households, Hispanics, recent immigrants, blacks, and those who had dropped out of high school lived in unaffordable housing. More than three-quarters of people in poverty were paying more than 35% of their incomes to housing.
The Harvard study suggests that the problem of affordability and tighter housing stock will only get worse. Even though demand for affordable rental housing is greater than ever, the supply has been shrinking. As the report states:
“Since the mid-1990s, more than 700,000 rentals with federal subsidies tied to them were lost from the subsidized housing stock (either through demolition, or owner decision to abandon subsidies and turn the units into market-rate rentals). Meanwhile, nearly 12% of low-cost market-rate rentals existing in 1999 were demolished or otherwise permanently lost from the housing stock by 2009. With a median age of 38 years, the rental housing stock is older on average than it has ever been, raising concerns about continued high losses of this valuable resource.”
Pendall and colleagues note that thoughtful local and regional policy can and must play a significant role in restoring affordability and improving the housing stock—for the benefit of everyone. Regional protections against stresses on people and households allow all families to thrive, and the social, business, and civic networks in the region to function with greater synergy.
Eric S. Belsky, Managing Director of the Joint Center for Housing Studies and an author of the study would agree. “Rental housing policies can also be an important component of broader antipoverty efforts and can help to revitalize communities hit hard by the foreclosure crisis,” he noted in a press release accompanying the report.
“The current budget reality adds even greater pressure to do more with less to address these needs.”