Apartments are Unaffordable for Half of US Renters

In 2022, half of all renters were cost burdened, spending more than 30 percent of their income on rent and utilities. According to a new report from the Harvard Joint Center for Housing Studies, this represents a record high of 22.4 million Americans who are cost burdened. In fact, among those renters, 12.1 million were severely cost burdened, paying over half of their income for housing and utilities. This surge also represents an all-time high.

While the report notes the rental market is cooling, evictions have risen, and we have the highest homeless numbers on record as a country. As a result, the need for rental assistance appears to be greater than ever before.

Historically high rent increases were recorded in 2021 and 2022. However, rent growth has almost completely stopped. In some markets, rents have even fallen.

“While the slowdown is a welcome change for renters, asking rents remain well above pre-pandemic levels, “said Whitney Airgood-Obrycki, a senior research associate at the Harvard joint Center for Housing Studies and lead author of the report.

The extended period of rising rents during the pandemic caused unaffordability to reach an all-time high. The percentage of cost-burdened renters rose to 50 percent, an increase of 3.2 percentage points since 2019.

Every income bracket has felt this cost burden, too. In fact, cost burdens have risen the most for middle-income renter households earning between $30,000 and $74,999 annually since 2019. At the same time, higher-income households saw their burden rate increase by 2.2 percentage points. Lower income renters, making less than $30,000 annually, experienced a 1.5 percentage point increase in cost burden rate. This brought their burden rate up to 83 percent. Most lower income renters, 65 percent, experienced severe burdens, which represents another all-time high.

The report outlines key factors to consider as cost burdens surge to new levels. For starters, the country’s supply of low-rent units is dwindling. More than half a million low rent units were lost between 2019 and 2022. With rent increases outpacing income gains and the loss of low-rent units, it creates a challenge in the rental market.

In addition, housing instability is on the rise, with homelessness hitting an all-time high of 653,100 people in January 2023. Finally, the stock of rental units is aging and is greatly in need of improvements, especially in energy efficiency.

While uncovering the issue of rent unaffordability in the U.S., the report recognizes the great need for rental assistance in the country.

“While states and localities have acted to fill some of the gaps, a larger commitment from federal government is required to expand housing supports and preserve and improve the existing affordable stock, “said Chris Herbert, managing director of the Harvard Joint Center for Housing Studies.