Harvard Rental Housing Study Highlights High Level of Cost Burdens for Lowest Income Households

Harvard Rental Housing Study: Over Half of Renters in Many NJ Metropolitan Areas Cost Burdened by Rent

On December 14, 2017, the Joint Center for Housing Studies of Harvard University released its biennial rental housing study, America’s Rental Housing 2017.

The rental housing study finds that the decade-long growth in renter households subsided over the past year. Rental vacancy rates have increased, especially among higher-priced apartments.

Significant affordability challenges persist, however.

  • Increases in rental prices continue to outpace inflation for non-housing goods.
  • The number of cost-burdened renters who spend more than 30% of their income on rent remains above levels of a decade ago.
  • Housing assistance for very low-income renters remains inadequate.
  • The growth of housing assistance is not keeping pace with the growth in households needing assistance.
  • The number of cost-burdened renters declined from 21.3 million in 2014 to 20.8 million in 2016.
  • And the number of severely cost-burdened renters spending more than 50% of their incomes on housing declined slightly from 11.4 million to 11.0 million.
  • Cost burdens remain significantly higher than in 2001. In 2001, there were 14.8 million cost-burdened and 7.5 million severely cost-burdened renters.

Low income households are those most challenged by cost burdens.

  • Seventy-two percent of renter households with incomes below $15,000 and 39% of those with incomes between $15,000 and $30,000 had severe cost burdens.
  • This is compared to 2% of renter households with incomes higher than $45,000.
  • The lowest income renters have far less disposable income for other necessities after paying for their housing.
  • The poorest 25% of renters had a median of $500 per month left over for other expenses after paying for their housing.

The availability of rental assistance has not kept pace with the growth in very low-income renters.

The number of very low-income households with incomes below 50% of their area median income increased from 14.9 million to 19.2 million between 2001 and 2015.
The number of very low-income households receiving rental assistance increased slightly from 4.2 million to 4.8 million.

The rental housing study finds that cost-burdened renters live in communities of all sizes, but finding affordable housing in larger metro areas is particularly challenging.

In the New York-Newark-Jersey City, NY-NJ-PA area the report found the following data:

  • Share of Renter Households with Cost Burdens – 51.4%
  • Share of Renter Households with Severe Cost Burdens – 29.2%
  • Number of Renters with Moderate Cost Burden – 775,620
  • Number of Renters with Severe Cost Burden – 1,016,085
  • Median Renter Income – $45,100
  • Median Housing Costs – $1,350
  • Median Percent of Income Dedicated to Housing Costs – 32%

In the Vineland-Bridgeton, NJ area, the report found the following data:

  • Share of Renter Households with Cost Burdens – 58%
  • Share of Renter Households with Severe Cost Burdens – 34.6%
  • Number of Renters with Moderate Cost Burden – 4,557
  • Number of Renters with Severe Cost Burden – 6,747
  • Median Renter Income – $22,500
  • Median Housing Costs – $960
  • Median Percent of Income Dedicated to Housing Costs – 39%

In the Trenton, NJ area, the report found the following data:

  • Share of Renter Households with Cost Burdens – 50%
  • Share of Renter Households with Severe Cost Burdens – 27%
  • Number of Renters with Moderate Cost Burden – 11,094
  • Number of Renters with Severe Cost Burden 12,476
  • Median Renter Income ($) 38,400
  • Median Housing Costs ($) 1,200
  • Median Percent of Income Dedicated to Housing Costs (%) 30.7

Moderately (severely) cost-burdened households pay 30-50% (more than 50%) of income for housing. Households with zero or negative income are assumed to have severe burdens, while households paying no cash rent are assumed to be without burdens.

Housing costs are monthly and include cash rent and utilities. Displayed metropolitan areas include metropolitan areas with populations between 10,000 and 50,000.

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