About 70 percent of the 7 million lowest-income renters in the country pay more than half of their income for housing, according to a study by the Joint Center for Housing Studies at Harvard University.

The median asking rent increased 32.7 percent in a decade, from $734 in 1994 to $974 in 2004. Meanwhile, monthly renter income grew about 3.3 percent in that time, from $2,272 a month in 1994 to $2,348 a month in 2004, according to the study, “America’s Rental Housing: Homes for a Diverse Nation.”

And the stock of rental units has been in decline. The nation is losing approximately 200,000 rental housing units each year because of demolition, the Harvard center reported.

The Low-Income Housing Tax Credit program and other programs supply about 100,000 new units of affordable rental housing each year, the center also reported, but that is not enough to compensate for the overall decline.

“We are taking one step forward and two steps back as gentrification in some neighborhoods and continued deterioration in others leads to the removal of vitally needed lower-cost rental housing,” said Nicolas P. Retsinas, director of the Joint Center for Housing Studies, in a statement.

An estimated 95 percent of Americans are renters at some point in their lives, according to the study. The total rental housing inventory, which is valued at about $2.7 trillion, “is big enough to support both a sizeable high-end market for luxury housing and the vast majority of the nation’s lowest-income families,” according to an announcement by the housing center.

There is a sizable population of renters who could purchase a home but choose to rent, the study found.

About 20 percent of all renters have median annual incomes that exceed $60,000, according to the report, while 20 percent have incomes below $10,000.

Those renters who could afford homes “prefer to rent because they want to maintain a flexible lifestyle, with easy access to work and the amenities of the city,” the report states. “Others rent because they want to take advantage of the low transactions costs, at least relative to those involved in home ownership. Still others rent to avoid the risk of a potentially volatile home purchase market.”

About 22 percent of all renters pay more than half of their incomes for housing, the report states. “Single-parent families, seniors and singles of all ages are especially likely to be so severely cost-burdened.”

Retsinas said, “Difficulty accessing the resources needed to maintain this much needed housing too often sets off a cycle of disinvestment and demolition. Even after a period of strong new production of market rate rentals, the available supply of housing that is affordable to the majority of the nation’s low- and moderate-income families continues to shrink.”

Among the findings in the report:

– After a 10-year slide starting in 1986, gross rents moved up steadily from $611 in 1996 to $711 in 2004.

– Among lowest lowest-income group renters, some 70 percent pay more than half of their incomes for housing and another 2 percent pay 30-50 percent.

– One-third of poor households receive housing assistance, leaving the other two thirds with housing cost burdens that consume more than half of their incomes.

– In high-cost areas such as Boston and San Francisco, even schoolteachers, nurses and other essential workers must pay more than 30 percent of their income to afford a modest two-bedroom apartment.

– After paying more than half of their incomes on rent, households in the lowest expenditure quartile have just $384 a month left over to meet all of their other needs. This means spending only $177 on food, $44 on transportation, and $28 on health care each month.

– Today, some 6.2 million households receive rental assistance, including the nearly 1.5 million households living in units built under the LIHTC program.

– Since 1994, an estimated 2.3 million rental units (6 percent) were demolished or otherwise permanently removed from the inventory.

– From 1993-2003 the number of units renting for $400 or less in inflation-adjusted terms fell by 13 percent – a loss of about 1.2 million. By comparison, the number of housing units renting for more than $800 a month increased by 1.7 million over this same 10-year period.

– According to the National Low Income Housing Coalition, workers in the vast majority of metro and non-metro area counties must earn two or three times the minimum wage-or live in households with multiple wage earners- to afford a modest two-bedroom apartment.

– The gap between median owner and renter incomes increased from $22,500 in 1990 to $26,700 in 2004.

– One-third of households rent, and over 80 percent of all households 25 or under are renters, along with two-thirds of those 25 to 29.

– 4.1 million households with heads aged 65 and older rent their homes.

– 60 percent of households that moved in 2003 because of divorce or separation chose to live in a rented unit.

– From 1994-2004 the number of minority renters rose by nearly 3 million households, offsetting a comparable decline in the number of white renters.

– Without the influx of foreign-born households, the number of renters would have fallen by over 2 million (or 5 percent) from 1993-2003 instead of rising by 118,000.

– Continued immigration and the growth of young minority households ensures that the number of rental households will increase by more than 1.8 million from 2005-2015.

– From a share of 4 in 10 today, minorities are expected to make up the majority of renters by 2015.

– Nearly 3 million new rental units were built from 1994-2003. Of this total, 2.3 million were in apartments in multifamily structures and another 700,000 were new single-family and manufactured homes.

– The Low-Income Housing Tax Credit program (LIHTC) adds as many as 90,000 units each year for lower-income renters.

– Nearly 60 percent of LIHTC rental units are newly built, with the balance added through rehabilitation of older subsidized apartments.

– Over the past 10 years nearly half of all rental production has been concentrated in the South and another quarter in the West.

– With half of all tax credit units located in developments with 50 or more units, large multifamily structures have become the fastest-growing segment of the rental housing market.

– Rental owners increased their real (inflation-adjusted) expenditures on repairs and improvements by 14 percent from 2001-2003, bringing total outlays to $58.5 billion.

– People and jobs continue to move away from central city locations. In 1970, half of all households in the nation’s 91 largest metro regions lived more than 8.9 miles from the central business district. By 2000 that boundary had pushed to 12.2 miles

– Half of all African-American renters live less than 7.4 miles from the center city – closer than both white and Hispanic renters, and twice as close as white homeowners.

– About half (3.3 million) of the lowest-income renter families live in center cities, another 2 million live in suburban locations, and 1.5 million live in rural areas.

– Nearly 60 percent of assisted renters and almost 70 percent of assisted minority renters live in center city locations.

– One in four employed center-city residents now works in the suburbs, while in distressed cities such as Detroit the share can reach 50 percent.

– Commuting to suburban jobs is especially difficult for the 60 percent of those lowest-income renters that live in central cities and do not own cars.

– Individuals and couples own more than 70 percent of all rental units in smaller multifamily structures (10 units or less).

– Individuals own disproportionately large shares of older, lower-rent units, units that are from two to three times more likely than rental units in general to be abandoned or otherwise removed from the housing inventory.

– The growing secondary market has expanded financing options for multifamily rental production, especially for the owners and developers of large properties. According to the 2001 Survey of Residential Finance, 86 percent of all rental properties with 50 or more units had mortgages. For properties with 10 or fewer units, the share with mortgages was less than 60 percent.

The rental market report, sponsored by the John D. and Catherine T. MacArthur Foundation, is part of a new research focus on rental housing at the housing center. The foundation seeks to promote the preservation of affordable rental housing.

“Preserving affordable rental housing is sensible public policy. On average across the country, it costs half as much to acquire and improve an existing rental apartment than to build a new one,” said Jonathan Fanton, foundation president.


Send tips or a Letter to the Editor to glenn@inman.com or call (510) 658-9252, ext. 137.

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