Less than one rental subsidy was available for every three eligible households in 2020
WASHINGTON, D.C. (March 18, 2021) – Home prices and rent appreciation have exceeded income growth since the turn of the 21st century. This has created economic obstacles for many American households, especially for low- and moderate-income (LMI) renters living in cities with recent employment growth but significant housing supply constraints.
This is according to a new research report, The Location of Affordable and Subsidized Rental Housing Across and Within the Largest Cities in the United States, released today by the Mortgage Bankers Association’s (MBA) Research Institute for Housing America (RIHA).
The findings reveal that nearly all of the 50 largest metropolitan statistical areas (MSAs) since 2001 have become less affordable for renters and prospective first-time homebuyers, with annual median rent growth rising at 2.0% above inflation, compared to an 0.8% real increase in annual median income. This disparity has led to a typical household in 2020 – compared to 2001 – needing to devote an additional 7.6% of its income to rent a median-priced housing unit.
“There is a significant lack of affordable housing supply in the United States, and the problem is worsening. In 2001, a low- and moderate-income household could spend less than 30% of its income to rent the median rental unit in 38 of the largest 50 metro areas. By 2020, this was the case in only 17 metro areas,” said Michael Eriksen, author of the report and West Shell Associate Professor of Real Estate at the University of Cincinnati and Academic Director of the Real Estate program. “The highest and fastest-growing rents have been in cities with strong employment and population growth that have a scarcity of developable land, primarily because of geography and land-use restrictions.”
Suraj Shrestha is an associate at Harborside Partners. He has been taking the lead role on research projects; to develop and implement online marketing strategies for search engine optimization and social media marketing. He is one of the core parts for helping to grow business revenue and the company’s online presence.