Can’t Afford to Buy, Can’t Afford to Rent
Is the rent too damn high? A Harvard study says yes, according to Bloomberg Businessweek:
If you can’t afford to own, you can rent. But what if you can’t afford to rent, either? Millions of Americans are in precisely that situation, according to a study released today by the Joint Center for Housing Studies of Harvard University. The availability of apartments, especially cheaper ones, hasn’t nearly kept up with demand, and the problem has worsened since the 2007-09 recession, the study says.
“In 1960, about one in four renters paid more than 30 percent of income for housing. Today, one in two are cost burdened,” according to the study, America’s Rental Housing.
“Cost-burdened” means you’re paying more than 30 percent of income for housing and “severely cost-burdened” means you’re paying more than half. “By 2011, 28 percent of renters paid more than half their incomes for housing, bringing the number with severe cost burdens up by 2.5 million in just four years, to 11.3 million,” according to the Harvard study, which was conducted with partial funding from the MacArthur Foundation.
Beyond the low inventory for affordable apartments, the chart above shows that adjusted for inflation, rents have steadily risen while incomes have fallen (notice the dive during the financial crisis).
In this survey we had earlier this year, we asked everyone what percentage of their take-home pay was dedicated to rent—many said they were paying more than 30 percent, which meant they are cost-burdened, but also detailed the trade-offs they make to live where they do (people in large cities with access to public transportation, for example, don’t have to deal with paying for and maintaining an automobile). If the rents get much higher, I’ll start living with roommates again. Who’s looking?