Americans face having to move or pay much bigger slice of income to stay in their homes as prices outstrip wages.Joshua Beadle of Sarasota, Florida, lived in a 950 sq ft loft apartment for four years for about $900 a month until about one year ago when the owner sold the building and he was forced to move.
“Over the course of one year my rent has increased 116%. How does someone who works gigs and is making the same amount of money afford a price increase of $1,050 a month?” said Beadle. “Every month that I pay my rent I breathe a sigh of relief knowing I can live one more month, but I know that I am one emergency away from not being able to afford living expenses.”
According to an analysis conducted by RedFin, rents in the US jumped 14% in December 2021 to $1,877 a month, the largest rise in more than two years.
Some of the most affected cities included Austin, Texas, with a 40% increase in rental prices compared with a year previous, New York City at a 35% increase, and several metro areas in Florida exceeding over 30% increases in rental prices.
There is less housing available for rent or sale now than anytime in the past 30 years, with supply shortages worsening, contributing to rising rental costs, inflation, and making home ownership more unattainable.
For Beadle, his situation is now untenable.
His $1,500-a-month rent was already a struggle for him to pay, and if late on rent payments he incurs a $100 fee. With the latest rental increase of nearly $450, he worries about his future in Sarasota, a community he’s lived in and helped build as a promoter and organizer for LGBTQ events over the years.
“Now, I can’t even afford to live in the community that I helped to create,” added Beadle. “This is not OK, There needs to be an answer for the young, single people who are trying to survive and thrive. We can’t just be happy with being able to pay rent one more month not knowing if we will have a place to live next month.”
Though rental prices in the US initially dropped due to the Covid-19 pandemic, prices rebounded in 2021 and increases quickly began to outpace pre-pandemic growth trends. These soaring costs – coupled with a broader surge in inflation – have wiped out any wage gains experienced by low-income Americans, as rental prices were already far outpacing wage increases in the US.
Between 2001 to 2018, renter incomes grew by 0.5% while rental prices increased by 13%, leaving 20.4 million households, nearly half of all renters in the US, burdened by the cost of rent with more than one-third of their income going toward rent and utility bills.
A report published by the Roosevelt Institute in November 2021 emphasized solutions for these soaring rent prices, including increasing the supply of affordable housing and expanding rights for tenants who are currently at the mercy of landlords and real estate developers without rent control and rent stabilization policies in place.
Owens argued against solutions put forth by some economists seeking to rely on contractionary monetary policies such as raising interest rates through the Federal Reserve.
“We advocate for an aggressive increase in supply and for the federal funding required to get that done,” said Owens. “But because we’re not going to see that happen quickly, and because when you have a supply shortage, landowners and landlords really have quite a bit of power because you don’t have a lot of options, we think rent control should be on the table to really take the edge off of those annual increases.”
Without these comprehensive actions, the report notes, landlords, especially in markets where affordable housing supply shortages yield them significant power, will continue to hike rental prices, further burdening the incomes of renters and expanding their profits without any capital improvements to housing
One week before his wedding in January 2022, Joey Texeira and his partner received a lease renewal from their landlord in New York City, with a 30% increase to rent of $750 a month for a one-year lease renewal or a 41% rent increase of $1,050 a month for a two-year lease renewal for an apartment they have lived in since December 2020. The lease renewal would start on 1 May.
“We’re very stressed and don’t know exactly what we plan to do yet,” said Texeira.
His husband was also unexpectedly laid off recently and their neighbors downstairs were recently priced out of the apartment building with a rental increase of $250 to $500 added to their monthly rent.
“It’s criminal,” said Texeira. “Renters are completely unprotected. The only thing a landlord has to do is give proper notice in proportion to the percentage increase. Technically my landlord could have increased my rent 100% and there would have been nothing I could do. Renters need help and better protections.”
Sabrina Marie DeAngelis, a tutor in Austin, Texas, recently experienced her rent increase from $920 to $1,440 a month for an apartment she has been living in since 2014, which she first rented for $675 a month.
She was forced to accept the renewal with a monthly rental increase of $520, as she suffers from a disability that makes moving difficult and doesn’t have any family living nearby to help. DeAngelis tried applying for rental assistance benefits, but she didn’t qualify for assistance and Covid-19 rental relief funds in her area were already depleted by the time she applied.
During the pandemic, DeAngelis decided to return to school to complete her master’s degree in hopes of increasing her income in the long term, taking a short-term cut in her income to attend school.
“Now I’m forced to increase my work hours while going to school,” said DeAngelis. “My productivity at work and school has been terrible because I’m stretched thin on time. On top of that, almost all my income is going toward rent and bills.”