Our top 3 takeaways from the JCHS America’s Rental Housing 2020 report
Each year, the Harvard University Joint Center for Housing Studies (JCHS) publishes a report on the state of America’s rental housing, giving an in-depth look at renter households, housing stock, and affordability.
This year’s report makes one thing very clear: Affordability is a serious problem for renters in the United States.
Our top three takeaways:
1. The housing affordability problem is getting worse
It likely won’t come as a surprise to anyone familiar with the housing market that affordability is a huge problem for renters across the country. As this report shows, the number and share of cost-burdened renters across the country are on the rise.
Renter households spending at least 30% of their income on rent are considered cost-burdened. They now account for 20.8 million households, or almost half of the renters in the U.S. Of these cost-burdened renters, more than half spend over 50% of their incomes on housing, making them “severely burdened.”
This isn’t just an issue that impacts low-income renters, either. In fact, the group with the highest increase in cost-burdened status was middle-income renters, with 56% of renters earning $30-45k now falling into this category.
Plus, after falling for six straight years, the number of people experiencing homelessness nationwide increased between 2016 and 2018, bringing the total to 552,830.
2. Low-cost rentals are disappearing
Vacancies across the U.S. are lower than they’ve been in decades. According to the report, the national rate in 2019 was down to 6.8%, which is the lowest it’s been since the mid-1980s.
This lack of open units has created a level of demand that’s pushing rents up far faster than incomes. As a result, the number of units renting for over $1,000 increased by 5 million between 2012 and 2017.
At the same time, the number of units renting for under $600 dropped by 3 million, reducing the share of low-cost rental homes nationwide from 37% to 25%—and making it even more difficult for renters to find homes within their budget.
3. New construction isn’t positioned to help the affordability problem
Multifamily construction has increased over the past few years, and doesn’t seem to be slowing down any time soon. There are now 600,000 units under construction, surpassing the level of construction activity in the U.S. since 1973.
On the surface, this may seem like a solution to the current affordability problem. After all, more supply means lower demand—but the new units being built aren’t cheap. Median asking rent for apartments built between July 2018 and July 2019 was $1,620, with 20% over $2,450, and only 12% below $1,050.
As the report explains, most of these newly built rental homes are high-end apartments in urban locations with asking rents that are well out of reach for middle- and lower-income households. So while there’s certainly a need for more rental housing across the U.S., the expensive units currently being built are unlikely to help solve the affordability problem.
Jetty helps make renting a home more affordable
The affordability problem is a serious one.
Finding ways to help renters access rental homes has always been a priority for us at Jetty—and while there are many factors at play, our focus is on lowering move-in costs.
In a survey we conducted in 2019, we found that while less than half of renters would be able to afford a cash security deposit of one month’s rent, 70% of those renters could afford a deposit alternative if it cost 17.5% of one month’s rent.
There’s still a lot of work to be done in making housing more accessible for renters. But we’re proud to offer a solution that makes moving in more affordable for renters across the country.