Policy Makers and Housing Experts Gather Today to Address Rental CrisisDecember 9th, 2013 by DWM Magazine
The Joint Center for Housing Studies (JCHS) at Harvard University released its America’s Rental Housing Report today, a report published every other year, and a few of the presenters echoed the same sentiment, “The simple fact is we are in midst of the worst rental crisis in terms of affordability that this nation has ever known.” Speakers gathered in Washington, D.C., today to discuss the report, and this important issue, including how to build more rental housing, which would further help the construction and door and window industries, further its recovery.
The recent economic turmoil underscored the many advantages of renting and raised the barriers to homeownership, sparking a surge in demand that has buoyed rental markets across the country, according to the report. “But significant erosion in renter incomes over the past decade has pushed the number of households paying excessive shares of income for housing to record levels. Assistance efforts have failed to keep pace with this escalating need, undermining the nation’s longstanding goal of ensuring decent and affordable housing for all,” says the report.
“The simple fact is we are in midst of worst rental crisis in terms of affordability that this nation has ever known,” said Donovan. We have had a major shift to rentals over a short period of time due to the foreclosure crisis.”
He added that the parties involved have to figure out how to do a better job in three elements: preserving what we have, building more units and linking housing to neighborhood and regional development.
“We have a once-in-a-generation opportunity to build opportunity in rental housing,” he added. “We will fight for a consistent source of funding that allows for production of affordable rental housing and home ownership. If we miss that chance, shame on all of us. This report shows that we face a crisis of rental housing affordability and we must take action now to help America’s families.”
Following are a few additional details from the report:
• Reversing the long uptrend in homeownership, American households have increasingly turned to the rental market for their housing. From 31 percent in 2004, the renter share of all U.S. households climbed to 35 percent in 2012, bringing the total number to 43 million by early 2013.
• Households of all but the oldest age groups have joined in the shift toward renting. The largest increase in share is among households in their 30s, up by at least 9 percentage points over an eight-year span. But shares of households across all five-year age groups between 25 and 54 also rose by at least 6 percentage points. In fact, the jump in rental rates for most age groups was well above the 4 percent overall rise, reflecting how the movement of the population into older age groups (when owning is more prevalent) stemmed some of the drop in homeownership.
• The future pace of growth will depend largely on how the share of households that rent evolves. This in turn depends primarily on economic factors such as changes in household incomes, the direction of prices and rents, and the availability and terms of mortgage finance. But given the ongoing recovery in the homeowner market and the fact that rentership rates for households aged 30–64 are at their highest in the last 30 years, further increases in renter share are likely to be small and growth in the number of renters is likely to slow.
• Depending on the pace of immigration, the number of renter households is likely to increase by between 4.0 million and 4.7 million in 2013–23. These projections would of course understate renter household growth if renting becomes more popular over the next decade and overstate growth if homeownership rates rebound.