The number of Americans who rent rather than own their home has risen to its highest-ever level in the past decade, according to a new study from the Joint Center for Housing Studies (JCHS) at Harvard University.
While the number of renters is up, so are rental costs, and with the impact of the recession and financial crisis lowering incomes for many Americans, more families are facing the threat of homelessness, the study says.
When adjusted for inflation, between 2000 and 2012 median rents increased by 6 percent nationally, while over the same period the median income of renters dropped by 13 percent, according to the study. More than half of U.S. renters pay 30 percent or more of their income on rent, up 12 percent from a decade ago. More than a quarter of renters, 27 percent, pay more than half their income on rent. The number of renters facing such "severe cost burdens" was "unimaginable just a decade ago, when the share of American renters paying half their income on housing, at 19 percent, was already a cause for serious concern," the study authors wrote.
In Massachusetts, more than 45 percent of households spend more than 30 percent of their income on rent. That puts the state in the middle of the pack nationally in terms of affordability, since while the Bay State has high housing costs, renter incomes are also relatively high.
"The gravity of the situation for the large proportion of renters spending so much of their incomes on housing is plain," Eric Belsky, JCHS managing director, said in a statement. "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 healthcare, 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."
The decrease in affordability is especially worrisome because the percentage of renters among American households is higher than ever, and set to increase over the next several years, the study suggests. From 31 percent in 2004, the renter share of all US households climbed to 35 percent in 2012, bringing the total number of renter households to 43 million by early 2013. Approximately 3 million existing homes switched from owner to rental occupancy from 2007-2011 alone.
"The shortfall in the number of units affordable to extremely low-income renters in the U.S. more than doubled from 1.9 million in 2001 to 4.9 million in 2011. The situation just keeps getting worse," Chris Herbert, research director at the JCHS, said in the statement. "Assistance efforts have failed to keep pace with escalating need, undermining the nation’s longstanding goal of ensuring decent and affordable housing for all."
