For nearly five years, home rental prices have been on an upward trajectory, surging at twice the pace of average hourly wages. The fallout: More rental households are struggling to make ends meet, and just over one in four families use half of their income to cover housing and utilities.
Those are the findings of an analysis of Census data by Enterprise Community Partners (ECP), a nonprofit that helps finance affordable housing. The data is part of a “Make Room” awareness campaign sponsored by ECP.
The rental market is a side effect of the foreclosure crisis and Great Recession, with income failing to keep up with rent increases. Meanwhile, construction lags behind demand from renters.
Tough economic times and a student loan debt crisis has pushed more millennials, former homeowners who faced foreclosure and low-wage workers into rental housing.
More than 30 percent of renters in California, Florida, New Jersey and New York state devote at least half their incomes to housing and utilities, according to the analysis. Other than Alaska, South Dakota and Wyoming, at least 20 percent of renters in every state face similarly high costs relative to income.
“It means making really difficult trade-offs,” said Angela Boyd, a vice president at Enterprise Community Partners. “There are daily financial dilemmas about making their rent or buying groceries.”
The Associated Press points out that the Enterprise Community Partners’ analysis closely reflects findings from other organizations. he U.S. Department of Housing and Urban Development estimates that 12 million renters and homeowners spend at least 50 percent of their income on housing. Moreover, Harvard University’s Joint Center for Housing Studies found in a 2013 report that about 27 percent of renters were spending half their incomes on rent. These levels were “unimaginable just a decade ago,” the report concluded.
See the infographic below from Enterprise Community Partners. Also, read more about the “Make Room” campaign.