Rental Crisis: Half of US Renters Struggle with Unaffordable Housing, Harvard Study Reveals
A recent report from Harvard’s Joint Center for Housing Studies unveils a stark reality: in 2022, a staggering half of all US renters found themselves burdened by the escalating costs of housing. The number of households spending over 30% of their income on rent and utilities surged by 2 million in just three years, reaching a record high of 22.4 million.
Among these struggling renters, 12.1 million faced severe burdens, allocating more than half of their income towards housing expenses—an unprecedented figure. Despite signs of cooling in rental markets post-pandemic, evictions have surged, homelessness rates are at an all-time peak, and the demand for rental assistance has never been greater.
The overheated rental markets witnessed during the pandemic have gradually cooled off, with rent growth nearly coming to a standstill. After experiencing historic spikes in 2021 and 2022, rent growth plummeted to a mere 0.4% in the third quarter of 2023 for professionally managed apartments. While this slowdown offers some relief to renters, asking rents remain significantly higher than pre-pandemic levels. The slowdown has been accompanied by a sharp decline in multifamily starts, although already initiated construction projects continue to add to the rental supply.
Unaffordability has reached unprecedented heights, exacerbated by the prolonged period of escalating rents during the pandemic. The proportion of cost-burdened renters soared to 50%, marking a 3.2 percentage point increase from 2019. This financial strain has affected renters across all income brackets, with middle-income households witnessing the steepest rise in burden rates. Even lower-income renters, earning less than $30,000 annually, experienced a 1.5 percentage point increase in their cost-burden rate, with the majority facing severe burdens.
The shortage of low-rent units has exacerbated the crisis, with the country losing 2.1 million units priced under $600 since 2012. Rent increases have far outpaced income growth, with median rents climbing 21% higher than 2001 levels while renters’ incomes rose by a mere 2%.
Moreover, the nation is grappling with a record number of homelessness cases, reaching an alarming 653,100 individuals in January 2023. Despite temporary protections and financial aids during the pandemic, homelessness rates have surged, emphasizing the urgent need for sustainable housing solutions.
The aging rental stock further compounds the issue, with nearly 4 million renter households residing in inadequate units. Energy efficiency and climate risk mitigation measures are sorely needed to address the environmental impact and safety concerns associated with these aging units.
As the report highlights, the need for rental assistance has never been greater. While temporary resources provided relief during the pandemic, a more substantial and sustained commitment from the federal government is essential to address the housing affordability crisis effectively. Only through concerted efforts can the nation hope to alleviate the hardships faced by millions of renters across the country.