Growth in income lags very far behind rises in rent: report

Household income grew by 18% in the past 50 years, while rents soared by 60%

New York /
Jun.June 29, 2016 11:53 AM

If you haven’t heard, it’s not easy for renters these days. But the complaints are not an exaggeration.

Examining census data from 1960 to present day, a new report has illustrated the drastic — but very real — drop in housing affordability nationwide.

Though median rents have increased by 64 percent between 1960 and 2014, median household incomes grew by only 18 percent in the same time, according to an analysis by rental listing website Apartment List cited by the Wall Street Journal.

And unless something major happens, the trajectory will continue.

Renters had the worst of it between 2000 and 2010, according to the Journal — thanks in part to a recession and then a housing bust, inflation-adjusted household incomes fell by 9 percent while rents increased by 18 percent during that period.

Economic crises notwithstanding, reasons for today’s challenging housing situation include land-use restrictions, rising construction costs and disproportional migration trends, in which more people are moving to already-expensive cities like New York and San Francisco. Whereas globalization has driven down the cost of other products, housing still relies on domestic resources, according to the Journal.

Predictably, Apartment List cites the worst cities for renters as San Francisco, New York City, Boston and Washington D.C. There are, however, cost-effective options. For instance, in Austin, income growth has matched that of rent in recent years. And not all renters are flailing.

A report by property management software maker RealPage found that the trend of rising rents and diminishing housing supply has little negative impact on mid- and high-earning renters. It’s low-income households that suffer the most from the affordable housing crisis. [WSJ]Cathaleen Chen


Related Articles

arrow_forward_ios
All Falls Down: Kanye West’s “Star Wars”-themed affordable housing plan hits snag
All Falls Down: Kanye West’s “Star Wars”-themed affordable housing plan hits snag
All Falls Down: Kanye West’s “Star Wars”-themed affordable housing plan hits snag
East Hampton Councilman David Lys and 395 Pantigo Road in East Hampton, Long Island (Getty, Google Maps, Town of East Hampton)
East Hampton affordable housing project nears approval
East Hampton affordable housing project nears approval
Extell's Gary Barnett and illustration of building (Extell Development, Getty)
Extell swaps office for resi in East Harlem
Extell swaps office for resi in East Harlem
Orinda mayor Inga Miller and map of Orinda, California (City of Orinda, Google Maps, Getty)
Bay Area city caught trying to pull a fast one for housing sites
Bay Area city caught trying to pull a fast one for housing sites
People, apartments
NYC’s millionaire renters on the rise
NYC’s millionaire renters on the rise
Eli Weiss and a rendering of 3875 9th Avenue
Developers land $414M for Inwood project after waiting out rezoning fight
Developers land $414M for Inwood project after waiting out rezoning fight
Bruce Teitelbaum; West 145th Street and Lenox Avenue (Getty, Google Maps)
Bruce Teitelbaum reboots controversial Harlem project
Bruce Teitelbaum reboots controversial Harlem project
From left: Rachel Fee, Eli Weiss, Kathy Hochul and Cea Weaver
Here are the real estate policies to watch in Hochul’s budget
Here are the real estate policies to watch in Hochul’s budget
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...