Rental growth making affordability impossible for more people in the US
Rents in the United States are at record highs across the country but income growth is not keeping pace meaning that it is becoming more expensive to rent a home, the latest research suggests.
The problem is most acute in locations such as New York, Los Angeles, Washington DC, Seattle and Portland, according to the report from real estate firm Zillow which has forecast for the first time how rising rents are affecting homelessness.
The median rent payment in Los Angeles requires 49% of the typical household income, leaving little opportunity to save in case of an unexpected medical bill, or loss of a job, the research shows.
Homelessness rates in New York, Los Angeles, Washington DC and Seattle increased by at least 4% between 2011 and 2016, and these cities have a strong relationship between rising rents and growing homeless populations. Philadelphia, Chicago, Minneapolis, Detroit, and Pittsburgh also show a significant connection between rising rents and homelessness rates.
A 5% increase in New York rents over the next year would force almost 3,000 more people into homelessness and in Los Angeles, the homeless population would grow by roughly 2,000, the report says.
‘We’ve seen so much pressure in rental housing markets that it’s created a rental affordability crisis that has spilled over into a homelessness crisis at lower income levels,’ said Zillow senior economist Skylar Olsen.
‘Often, the rental demand in these markets isn’t being met with a sufficient supply. There are several cities grappling with this problem, but there is no one size fits all solution for everyone. This report puts a number on the link between rising rents and homelessness, highlighting the very real human impact that rent increases are having across the country,’ added Olsen.
However, not all markets in this analysis have a strong relationship between rents and the number of people experiencing homelessness, indicating that they have found a way to interrupt the trend.
Even as rents have risen in Houston and Tampa, for example, the homeless population in each city fell. Other cities where the homelessness rates also fell include Chicago, Phoenix, St. Louis, San Diego, Portland, Detroit, Baltimore, Atlanta, Charlotte, and Riverside.