If you’ve been paying attention to the housing market at all then you know that rents are up. In some markets way up, and that’s becoming a growing point of concern with those who study housing in the US. From an article at The Atlantic:
A recent report from the Joint Center for Housing Studies (JCHS) at Harvard, puts some numbers on just how bad this problem is: About half of all renters in the U.S. are using more than 30 percent of their income to cover housing costs, and about 25 percent have rent that exceeds 50 percent of their monthly pay…
A big part of the problem is that fewer households are making the transition from renting to owning, which means more competition for limited inventory—driving rental prices up. Renters who would previously be able to qualify for mortgages are either finding that mortgage lenders are still super strict post-recession, or that there simply aren’t many homes in their price range—or both. “In normal times when homeownership was achievable you could get a starter home for between $150,000 to $250,000,” says Andrew Jakabovics, a senior director at Enterprise Community Partners, a nonprofit that focuses on affordable housing. “That segment of the market is basically dead.”
So instead, households with higher incomes and dreams of white picket fences remain in the rental market. Those households take up available units in the mid-to-high price ranges, for which they can afford to pay a premium. In fact, renters with incomes that top $75,000 are among the fastest growing group in the market, says Chris Herbert, the managing director of the JCHS. “Developers will be drawn to build the houses that provide the highest returns,” he says. That means not enough new apartments are affordable apartments that can accommodate low- and middle-income residents. Instead, high-priced luxury units get built first, pushing rents up and middle and low-income earners into apartments that are more expensive than they can afford. Sometimes this means pricing them out of cities altogether.
The situation in secondary and tertiary cities like those here in the Piedmont Triad isn’t as constrained as in some of the major metros like San Francisco, but it’s still an issue. Rents here are up in general, but relative to other areas of the country – even our neighbors in Raleigh and Charlotte – the rise in rents has been moderate. Still, we face many of the same issues outlined in The Atlantic article and housing affordability is likely to be a topic of concern for our local leaders for the foreseeable future.