Rental Market Tightens as Housing Cost Burdens Increase

330,000 New Jerseyans
Severely Cost Burdened by Rent

Rental Market Tightens as Housing Cost Burdens IncreaseA study by The Joint Center for Housing Studies of Harvard University, America’s Rental Housing: Expanding Options for Diverse and Growing Demand, finds growing demand for and an inadequate supply of affordable rental housing in the United States. Forty-three million households live in rental housing as of 2015, an increase of 9 million households since 2005.

Only 8.2 million new rental housing units were added to the rental housing stock during this period, resulting in a record number of 21.3 million renter households who spend more than 30% of their income on housing costs.

All income groups have seen a rise in renter households. The greatest absolute growth has been among the lowest income households, while the greatest rate of growth has been among the highest income households.

In New Jersey, in 2014, 272,000 households were moderately cost burdened paying between 20-50% of their income for housing and 330,000 households were severely cost burdened paying more than 50% of their income for housing.

Large shares of low income renter households were cost-burdened in every part of the country.

Rental housing is home to a growing share of the nation’s increasingly diverse households. But even with the strong rebound in multifamily construction, tight rental markets make it difficult for low- and moderate-income renters to find housing they can afford.

As a result, the number of cost-burdened renters set another record last year. Addressing the challenge of affordability in a time of rising overall demand will require greater efforts from both the public and private sectors to expand the range of rental housing options.

The study projects that the number of renters will continue to increase by at least 4.4 million additional households by 2025. The study attributes this growth to new household formation by the millennial generation, strong immigration, and baby-boomer homeowners aging and transitioning to rental units.

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