Written By: David Fasasi
INTRO TO HOUSING ISSUES
Around the world, house prices are increasing at a disturbing rate while wages lack significant improvement, resulting in a global housing crisis. Many news and media reports say that most countries worldwide are currently and will continue to experience a shortage of affordable housing, as people around the world are victims of the economic oppression known as rent.
THE CONCERNS OF RENT PRICE IN 2024
At the national level, between February 2023 and February 2024, rent prices have climbed by 2.25 percent, from $1,937 to $1,981, registering a price difference of $44. Prior to last month’s gains, on a national level, rent prices have fallen or remained flat for the past five months. February’s uptick was the fourth time in twelve months that asking rents have risen above one percentage point.
Narrowing regionally, the Northeast and Midwest continued to be at the vanguard of rental gains. Year-over-year, rents in the Northeast rose from $2,357 to $2,481, or 5.3 percent — the largest regional increase in the study. The Northeast remains the most expensive region in the nation, with current rents standing at their highest since August of 2023.
Rents also climbed once again in the Midwest, topping last month’s record. At $1,441, rents here are up 4.9 percent on a yearly basis. Despite the region’s steady gains, the Midwest still offers renters the most affordable prices in the nation, currently $1,440 cheaper than its Northeast counterpart, and $907 cheaper than rents in the West.
Focusing on the West, where a glut of housing inventory contributed to a cooling in Southwest and Mountain West metros, current median rents fell by one-tenth of a percent year-on-year, to $2,349. Rents in the West peaked in August of 2022 to $2,497. Finally, in the South, the second most affordable region in the U.S., median asking rents were $1,635, down 0.3 percent on a yearly basis.
Household instability is growing. Early pandemic efforts to keep renters housed — including eviction moratoriums, income supports, and a $46.55 billion emergency rental assistance program — were winding down as rents skyrocketed, leaving many renter households vulnerable to housing instability. At the end of 2022, evictions neared pre-pandemic levels and remained elevated through the middle of 2023, when about 12 percent of renter households reported that they were still behind on rent.
The end of pandemic relief measures and historically high rent growth also led to a dramatic rise in homelessness. The number of people experiencing homelessness jumped by nearly 71,000, from January 2022 to January 2023, the largest single-year increase on record, to an all-time high of 653,100 people.
WORSENING MENTAL IMPACTS OF INCREASING RENT
While rent is increasing homelessness and household instability nationally, it also changes people mentally. Rising rents are detrimental to both mental and physical health, experts say. A growing body of research shows high rent burden and the threat of eviction increase the risk of depression and anxiety. They also increase the risk of chronic diseases such as diabetes, obesity and cardiovascular disease. Meanwhile, people who received rental assistance to alleviate high costs have shown reduced psychological distress.
In the January study, study authors isolated the impact of rent on renters’ health by looking at millions of eviction records and linking them to the evicted person’s death records and census data. They controlled for systematic differences in characteristics — including race, ethnicity, sex, education, household, and neighborhood — when comparing mortality rates and tenants with different rent burdens over time.
WAYS WE CAN HELP MAKE HOUSING MORE AFFORDABLE
Even though the crisis is bad, it does not mean it’s impossible to fight against it. One way to fight the crisis is to legalize more apartment units. While rolling back single-family zoning is one of the highest-profile policies proposed to enhance affordability, early evidence from Minneapolis, which eliminated single-family zoning, indicates that such measures alone are not sufficient. Cities can also address other potentially restrictive policies, including minimum lot size requirements, density limits, and prohibitions against mixed-use developments (apartments in commercial zones) to quickly build affordable housing at scale.
Another way is to establish more affordable housing trust funds. A housing production trust fund is a source of funds designated to finance the production and preservation of affordable housing, providing additional gap financing in addition to other sources like the Low-Income Housing Tax Credit and private subsidies. Some cities, such as Albuquerque, have capitalized their housing trust funds through voter bond measures. While their exact structures and processes vary, the results are promising and worthy of consideration. In Washington, D.C., the Housing Production Trust Fund has produced over 6,000 affordable units since 2015.
THE ROLE OF THE GOVERNMENT IN THE RENT INFLATION CRISIS
The United States is slogging through a housing affordability crisis that was decades in the making. At the root of this problem: America failed to build enough homes for its growing population.
The lack of housing has caused a record number of renters to devote an excessive amount of income to housing, according to a Harvard University analysis. Not enough homes are for sale or being built, keeping prices elevated. Average mortgage rates have more than doubled and further worsened affordability. Because the government isn’t doing much, local governments are! (Take notes, Biden) through programs such as New York’s Rental Assistance and HRA assistance programs.
The unfortunate crisis of rent and housing instability dominates the lives of many Americans and civilians worldwide, but can be solved through the united efforts of our local, national and global communities by trying to make a difference.
References:
Rent. (2024, April 18). April 2024 Rent Report — Rent. Research. Rent. Research. https://www.rent.com/research/average-rent-price-report/Six Takeaways from America’s Rental Housing 2024. (2024, January 25). Joint Center for Housing Studies.https://www.jchs.harvard.edu/blog/six-takeaways-americas-rental-housing-2024Rodriguez, A. (2024, January 11). Soaring rent prices aren’t just hurting wallets. They’re shortening life spans. USA TODAY. https://www.usatoday.com/story/news/health/2024/01/10/high-rent-bad-health-short-lifespan/71891093007/Ten Actions Cities Can Take To Improve Housing Affordability | Bipartisan Policy Center. (n.d.). https://bipartisanpolicy.org/blog/10-actions-to-housing-affordability/Americans are frustrated by housing prices ahead of the 2024 election. (2024, March 16). PBS NewsHour. https://www.pbs.org/newshour/politics/americans-are-frustrated-by-housing-prices-ahead-of-the-2024-electionRental assistance. (n.d.). https://www.nyc.gov/site/hra/help/rental-assistance.pageAffordable Housing — HRA. (n.d.). https://www.nyc.gov/site/hra/help/affordable-housing.page