Cost Burdened Renters in the U.S. Increase; Face Tight Housing Market

Black Renters Disproportionately Represented in the Low-Income Renter Population

The number of cost burdened renter households—those paying at least 30 percent of income for housing and utilities—increased to 20.8 million in 2018.

This increase brings the cost-burdened share of renters to 47.5 percent, according to the Harvard Joint Center for Housing Studies’ (JCHS) latest report on America’s Rental Housing.

Renters in New Jersey and every other state – in metropolitan and rural areas – pay very high shares of their income for housing. As this affordability crisis deepens, it’s affecting more moderate-income households.

Comparing rental housing data from 2008 to 2018, New Jersey saw an increase in cost burdened households. In New Jersey, in 2008, there were 231,000 moderately housing cost burdened households; 262,000 severely housing cost burdened households; and 1,039,000 total renter households. In 2018, there were 258,000 moderately housing cost burdened households; 322,000 severely housing cost burdened households and 1,171,0000 total renter households.

Nationwide, higher-income households with incomes of $75,000 and above accounted for more than three quarters of the 3.2 million growth in renters between 2010 and 2018. The new rental housing supply has been concentrated at the upper end of the market. And most of the growth in renters of this high-income renters have been married, young, and white.

Rental vacancies are at their lowest point in over three decades. With rental vacancies this low, landlords may feel that they can charge higher rent for rental housing that is in high demand.

With the expansion of predominately rental housing for high-income renters, it is not surprising that we are seeing shortages in affordable rental housing for low- and moderate-income households. The median asking monthly rent for unfurnished apartments completed in 2018 was just over $1,600/month, well above the $900 /month median contract rent for all units in 2018.

Another wrinkle is that we also know that wages are not keeping up with rents and other living expenses. Households working one, two, or three low-wage jobs still cannot afford this median rent.

Renters with the lowest incomes working these low wage jobs are the likeliest to pay a disproportionate share of their monthly budgets on rent and utilities. These renters make difficult decisions between between buying food and taking their children to the doctor before they even think about paying for energy expenses to heat and cool their apartments.

Renters with the lowest incomes face a much greater rate of eviction. The report finds racial disparity not only among the population of high-end renters but also among renter households facing eviction.

Lower income Black households who make annual salaries less than $30,000 up to over $75,000 were more likely than any other races – Hispanic, Asian/Other and White – to face the threat of eviction.

According to the 2017 American Housing Survey, 1.9 percent of all renter households—including 1.4 million adults and 810,500 children—reported being threatened with eviction within the previous three months. The share is highest among renters with incomes under $30,000, and particularly among black households (Figure 36).

As a growing number of people experience high housing cost burdens, housing instability, and homelessness, the researchers conclude that, “only the federal government has the scope and resources to provide housing assistance at a scale appropriate to need across the country.”

Federal rental assistance is highly effective at helping the lowest-income people afford decent, stable housing, but only 1 in 4 eligible households receives assistance due to funding limitations. We need the federal government to make a significant investment in affordable housing to end the social problem of cost-burdened renters. Given the depth and breadth of the housing affordability crisis, policymakers should significantly expand federal rental assistance.

We should also work to end the racial disparity in the low-income population facing eviction. NJCounts 2019, the statewide count of the homeless found a racial disparity in New Jersey’s homeless population, many households experiencing homelessness have experienced homelessness.