As Rental Costs Rise, Incomes Fall, and Low-Income Renters Are Left Behind

Here at the Alliance, we believe the solution to homelessness is housing. Connecting homeless people to housing ends their homelessness, but finding the resources to help people access housing isn’t always easy. And unfortunately, economic trends are making this task even harder.

In many places across America, there is simply not enough affordable housing available to move people out of homelessness and into permanent housing. Without this housing stock, many homeless Americans are likely to remain stuck in the homeless assistance system. Sadly, it doesn’t look like this problem is about to get better any time soon.

Last week, Harvard’s Joint Center for Housing Studies released its biennial report on rental housing in America. The study found that demand for rental housing has increased, which has increased rents and reduced vacancy rates. Though new rental housing has been developed, it has been mostly units available to households who can afford to pay above-median rents. In other words: the rental market is changing, and those at the bottom of the income ladder are increasingly left behind.

Let’s take a closer look at some of the key findings from the report:

  • The number of available rental units is startlingly low. In the first three quarters of 2015, the national vacancy rate was at its lowest point in 30 years – only 7.1 percent.
  • Rents are increasing faster than inflation. In all major metro areas in the America, rent growth has outpaced overall inflation in 2015
  • Rents are rising while incomes are falling. In 2014, median housing costs for renters rose 7 percent since 2001. The median income for renter households, however, decreased 9 percent in inflation-adjusted terms in the same time period.
  • More and more Americans are severely burdened by housing costs. In 2014, the number of renters paying more than 50 percent of their income on housing costs increased to 11.4 million—a record high.
  • Nearly all minimum-wage workers are severely burdened by housing costs. In 2014, a full-time minimum wage worker made $15,000 per year. 72 percent of renters with incomes at or below this level paid spent than 50 percent of their incomes on housing.
  • Low-income renters simply do not have enough units available to them. In 2013, 11.1 million extremely low-income renters (i.e., those earning less than 30 percent of area median income) were vying for only 7.2 million housing units that they could afford. This means there were only 34 affordable rental units for every 100 extremely low-income renters.

This report is troubling in many ways, particularly for those in the homelessness field. It demonstrates that millions of Americans—those who are severely cost burdened by housing costs—are vulnerable to homelessness, and that it is becoming harder to find affordable housing for people experiencing homelessness. If we are going to end homelessness, we must address the affordable housing crisis.

So what can you do? You can tell your members of Congress to support funding for housing and homelessness programs—find out how to do that here. Congress has not yet passed a funding bill for FY 2016, which means your voice is critically important. We need your support and federal support to address the affordable housing crisis, fully fund homeless assistance programs, and end homelessness.

Graphic from from "America's Rental Housing: Expanding Options for Diverse and Growing Demand" by Harvard University's Joint Center for Housing Studies.