Every month there are people struggling to pay their rent. Sometimes it’s a choice between what utility bill gets paid, in order just to have keep a roof over their heads. If more than 30% of your income is going towards your rent, housing experts call that unaffordable. In cities like Washington, D.C and New York City, where rent for a one bedroom can cost over $3k a month, chances are many people are going rent broke.
According to a recent report by the Joint Center for Housing Studies of Harvard University, over the last decade, renters who pay more than 30 percent of what they make on housing, or what the study labels “cost-burdened,” rose 12 percentage points last decade, reaching 50 percent in 2010. What’s even worse are those who have a “severe burden,” which means they’re paying more than half of their income towards rent, which rose 8 percent.
It’s not too hard to figure out why so many struggle to afford rent. There is very little affordable housing available. These low-income renters who make $15,000 or less would have to find housing that costs less than $375 a month, yet the median monthly cost for housing that was built in the last four years is more than $1,000. Less than a third of those units rents for under $800, and a mere 5 percent go for less than $400. There were just 6.9 million housing units that these renters could afford in 2011, but there are 11.8 of these renters, and to top it off, 2.6 million of the affordable units are occupied by higher-income people. The availability of low-cost housing has been declining for decades — in 1970, there was an actual surplus of 300,000 low-cost rental units, but by 2011, there was a shortfall of 5.3 million units.
Unemployment also exacerbated the situation, although the report notes that “high unemployment rates are not the main culprit because the spread of burdens has been even greater among households with full-time workers.” Three-quarters of renters whose household heads couldn’t find a job in the previous year had a housing cost burden. But the share of those who were burdened while also working throughout the year before rose nearly 10 percentage points from 2001 to 2011, reaching more than 2.5 million people.
Meanwhile, federal subsidies to help low-income people afford housing have been hammered by budget cuts and are far from reaching everyone who needs help. One quarter of the households who are eligible for rental assistance actually gets it given the high demand that puts many on lengthy waiting lists. That problem got even worse this year thanks to sequestration, as some people who had finally moved off the waiting lists got their vouchers snatched back because of the automatic budget cuts. Between 40,000 and 65,000 fewer people will have gotten assistance this year compared to last, and if the cuts remain in place next year somewhere between 125,000 and 185,000 additional people will lose the support. Yet housing subsidies kept 2.8 million people out of poverty last year.