US Rents Squeezing Low-Income Tenants

U.S. renters are seeing little relief from high housing costs despite what has been described as a boom in apartment construction, reports Patrick Sisson in a piecefor Bloomberg CityLab.

According to the Harvard Joint Center for Housing Studies annual State of the Nation’s Housing Report, “the portion of the country’s renters who face significant cost burdens has hit record levels — and the strain has moved up the income ladder.” Today, 65 percent of working-age renters can’t cover their non-housing expenses after their housing costs.

If the federal government proceeds with cuts to federal housing assistance programs, the situation could get worse for low- and middle-income renters. According to Harvard senior research associate Alexander Hermann, “Affordability challenges have never been greater, and the private housing market isn’t serving those households, so this is basically the worst time to cut housing assistance for low-income households.”

The number of Americans spending more than 30 percent on housing — considered rent-burdened — hit an all-time high of 22.6 million in 2023, with 83 percent of Americans making under $30,000 per year being rent-burdened. “But those with higher salaries are affected as well: 45% of Americans making $45,000 to $74,999 a year are rent burdened, twice the 2001 rate.”

The number of housing units renting for lower costs is dropping, while “the stock of apartments renting for more than $2,000 tripled, from 3.6 to 9.1 million” between 2013 and 2023. “Beyond rent, the growth of several housing-related costs has been making apartment living more expensive. Consumer electricity costs rose 4.5% last year, double the consumer price index, amid surging demand from power-gobbling data centers.”