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Weak Income Growth and Rising Rents Create Severe Affordability Problems for American Renters

December 18, 2013 Comments off

Weak Income Growth and Rising Rents Create Severe Affordability Problems for American Renters
Source: Harvard Joint Center for Housing Studies

Affordability problems for renters have skyrocketed over the past decade both in number and the share of renters facing them, according to a new report on rental housing from the Harvard Joint Center for Housing Studies. The inability of so many to find housing they can afford dramatically impacts the health and well-being of U.S. renters, as lower-income households cut back on food, healthcare, and savings, just to keep up.

Released today at an event held at the Newseum in Washington, DC, the report, America’s Rental Housing: Evolving Markets and Needs, finds that half of U.S. renters pay more than 30 percent or more of their income on rent, up an astonishing 12 percentage points from a decade earlier. Much of the increase was among renters facing severe burdens (paying more than half their income on rent), boosting their share to 27 percent. These levels were unimaginable just a decade ago, when the share of American renters paying half their income on housing, at 19 percent, was already a cause for serious concern.

Escalating rental affordability problems come at a time when the share of Americans that rent has increased from 31 percent in 2004 to 35 percent in 2012. In fact, the 2000s marked the strongest numerical growth in renter households in the last fifty years. As ownership rates fell, housing markets have adjusted dynamically to the increased demand for single-family rentals, with about 3 million existing homes switching from owner to rental occupancy from 2007-2011 alone.

On the strength of the surge in rental demand, rental vacancies have fallen, rents have climbed, and construction of new rental housing has picked up sharply, giving an important spur to the struggling residential construction market. Rising rents combined with softness in wages has put the squeeze on affordability. The report points out that between 2000 and 2012 real median rents (adjusted for inflation) nationally increased by 6 percent, while over the same period the real median income of renters dropped by 13 percent. More than ever before, the private market struggles to provide decent housing that is affordable for people of even modest means.

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Homeownership Symposium – Reexamining the Social Benefits of Homeownership After the Housing Crisis

August 29, 2013 Comments off

Homeownership Symposium – Reexamining the Social Benefits of Homeownership After the Housing Crisis
Source: Joint Center for Housing Studies at Harvard University

The purposes of this paper are, first, to present a conceptual model of how the housing crisis and ensuing recession might impact both interest in and the social impacts of homeownership. A second purpose is to review the limited empirical evidence on how, if at all, the recession and housing crisis have altered interest in homeownership or altered its actual impacts. A third purpose is to provide an updated review of the literature of the social impacts of homeownership, most of which was conducted before the recession. Fourth, we will draw some preliminary conclusions on how the recession and housing crisis may have altered the social impacts and what additional research is needed on this important topic. In this paper we focus on five social impacts: psychological health, physical health, parenting and children’s academic achievement and behavior, social and political participation, and neighborhood/social capital.

The U.S. Housing Stock: Ready for Renewal

March 19, 2013 Comments off

The U.S. Housing Stock: Ready for Renewal

Source: Joint Center for Housing Studies of Harvard University

After languishing for several years, the U.S. remodeling industry appears to be pulling out of its downturn, and a renewal of the nation’s housing stock is underway. The U.S. Housing Stock: Ready for Renewal is the latest report in the Improving America’s Housing series, published by the Remodeling Futures Program at the Joint Center. Foreclosed properties are being rehabilitated, sustainable home improvements are gaining popularity, older homeowners are retrofitting their homes to accommodate their evolving needs, and the future market potential is immense, as the emerging echo boom generation is projected to be the largest in our nation’s history.

Housing Landscape 2012: Nearly a quarter of working households spend more than half of income on housing

February 29, 2012 Comments off

Housing Landscape 2012: Nearly a quarter of working households spend more than half of income on housing
Source: Center for Housing Policy

A new study by the Center for Housing Policy confirms that falling home prices have not solved the housing affordability problems of the nation’s working households. In fact, the Center’s Housing Landscape 2012 report found that the share of working households paying more than half their income for housing rose significantly between 2008 and 2010 for both renters and owners. This annual report explores the latest Census data from 2008 to 2010 on housing costs and income, including housing cost burden data from the 50 largest U.S. metropolitan areas, all 50 states and the District of Columbia. Among other conclusions, Housing Landscape 2012 finds that nearly one in four working households in the U.S. spends more than half of total income on housing.

Housing cost burden for working households grew over the two-year period studied largely due to falling incomes and rising rental housing costs. Report author Laura Williams says rents rose due to increased demand for rental housing which has outstripped supply, partly due to the crisis on the homeownership side of the market.

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