Older, Richer Renters Are Feeling Cost Burdened, Too

February 3, 2020

Renters who are priced out of homeownership aren’t getting financial relief by renting either, according to a new report from Harvard’s Joint Center for Housing Studies. “Despite the strong economy, the number and share of renters burdened by housing costs rose last year after a couple of years of modest improvement,” says Chris Herbert, managing director of the JCHS. “And while the poorest households are most likely to face this challenge, renters earning decent incomes have driven this recent deterioration in affordability.”

The number of wealthier renters is on the rise. The percentage of renter households earning $75,000 or more in 2019 reached 22%, the highest on record, according to the study. The number of high-income renter households increased by 45% between 2010 and 2018. The share of low-income renter households, defined by those who earn less than $30,000 per year, declined by more than 5%.

The rising costs of homeownership may be pushing more high-income families into the rental market. Between 1994 and 2019, the number of middle-aged families renting grew: 4.5% more of those between the ages of 35 and 44 and 5.3% more among those ages 45 to 54 were renters compared to the prior 25 years. The number of married couples with kids renting has surged by 14% between 2004 and 2018.

Still, the number of cost-burdened renters—those who pay 30% or more of their income on rent—is on the rise, swelling by 6 million from 2001 to 2018, according to the report. Overall, 20.8 million Americans are considered “rent-burdened,” with nearly half considered “severely rent-burdened” (devoting half of their income to housing costs).

New rental construction is at or near the highest levels in the past three decades. However, there is still a significant need for more housing, particularly at lower price points, the report notes. Between 2012 and 2017, the number of units renting for $1,000 a month or more increased by 5 million. On the other hand, the number of units renting for $600 or less decreased by 3.1 million. The percentage of low-cost units nationwide decreased to 25% of the nation’s overall housing stock in 2017, the report shows.

Source: 
America’s Rental Housing 2020,” Harvard University’s Joint Center for Housing Studies and “U.S. Renters Are Richer, Older, and Have Larger Households,” Curbed.com (Jan. 31, 2020)