Study finds rents soaring as apartment supply lags
Harvard's Joint Center for Housing Studies issued its big annual report on the rental market Wednesday.
Like other reports of its sort, it found that rents are high, and getting higher.
They're growing faster than incomes. And — despite a surge in multifamily construction in many cities — supply is having a hard time keeping up with demand.
All of it paints a picture of a rental crisis that shows few signs of slowing any time soon.
"The number of renters paying excessive amounts of their income for housing continues," said Chris Herbert, the center's managing director.
It's a thick report, 44 pages. But we pulled out a few highlights:
■ There are a lot more renters than there used to be.
About 43 million American households rent their homes today, up from 34 million in 2005. That's 37 percent of all Americans, the highest share since the mid-'60s. Who are these new renters? They're former homeowners who lost homes to foreclosure and have struggled to get a mortgage since. They're young workers in their 20s and 30s. And, increasingly, they're baby boomers, who either never bought a house or have sold and downsized into a rental.
■ And more are coming.
Harvard projects another 4.4 million households will be renting by 2025, a more than 10 percent increase from today. More millennials will move out from under mom and dad's roof. More seniors will age out of their current homes. And growing immigration will continue to increase demand as well.
■ New supply will help, to a point. All the apartment construction in Boston and many other big cities is keeping rent growth in check, but mostly at the higher end of the market.
Developers aren't building enough units suitable for families or for senior citizens, and high development costs make it hard to produce new housing that a low- or middle-income renter can afford.
■ The rent crunch is becoming a middle-class phenomenon. The number of households paying 30 percent or more of their income in rent has soared, jumping by nearly half a percent since 2001. Among families earning $15,000 or less, 84 percent pay that much, with most forking over at least half their income to the landlord every month.
But as rents have grown and incomes stagnated, more middle-income households are cost-burdened, too. In the Boston area, 38 percent of households that earn between $45,000 and $75,000 a year report spending 30 percent or more of their income on rent.
■ It pays to stay put. People who’ve moved in the last year are paying a lot more for their apartment. In Boston, the average person who moved in the last 12 months has a monthly rent of $1,500, compared to $1,180 for those who’ve been in place at least a year. In a city where Sept. 1 is moving day for tens of thousands, that’s a lot of additional money in the pockets of landlords.