In the nation’s large metros, the share of households renting their homes continued to grow, according to the 2017 National Rental Housing Landscape, released today by the NYU Furman Center.
The recent uptick in renters was particularly strong among higher-income and highly-educated households, who increasingly opted to rent their homes even as the economy continued to recover after the Great Recession. The National Rental Housing Landscape, released annually by the NYU Furman Center, examines rental housing trends in the nation’s largest metropolitan areas. In 2017, the analysis expanded to include all U.S. metros with over a million people (53 metros total).
The report observes trends and makes data on renter demographics, renter households, rental housing affordability, and the rental housing stock for each of the 53 metro areas, available at www.RentalHousingLandscape.org.
“We’re seeing a shift in the composition of renter households in the nation’s large metro areas. As renting a home becomes a more popular option among those with higher education levels and higher incomes, median renter income has also risen,” said Sewin Chan, associate professor of Public Policy at NYU Wagner and Research Affiliate at the NYU Furman Center. “The rise in higher-income renter households may mask the significant housing affordability challenges faced by lower-income renter households, who are both struggling to pay rent and have fewer affordable options if they need to move,” said Chan.
According to the report, affordable housing options in most large U.S. metros have become increasingly limited. Households making half of the median income across all 53 metros ($30,500 in 2015) could only afford 17% of recently available units in 2015, down from 21.5% in 2006. Rentals that were recently on the market were more expensive than units overall in 51 of the 53 metros included the study. Across the 53 metros, median rent for recently available two-bedroom units was 4.8% higher than the median rent of all two-bedroom units, though this rent premium varied widely by metro.
Recently-available two-bedroom units in the San Jose and San Francisco metros, for example, were roughly 30% more expensive than all two-bedroom units in the metro, while recently available rental units in the Minneapolis and Grand Rapids metros did not command a premium. Renter households today spend much more of their income on housing costs than in previous decades.
Nationally, 46% of households were rent burdened in 2015, compared with 36% in 2000, and just 25% in 1970. The national trend for severely rent burdened households followed a similar pattern.
“This research outlines the economic pressures that have led to a rise in the cost of living for many low and moderate income families,” said Joanne Collett, executive director, JPMorgan Chase. “JPMorgan Chase’s support of this research aims to advance better housing policies that create more inclusive and equitable communities, and promotes greater access to affordable housing and more economic opportunities for all.”
