2,500 Groups Urge Congress To Pass Affordable Housing Legislation As Economy Keeps People Renting
More than 2,500 businesses, nonprofits and public agencies signed off on a letter delivered to Congress Monday urging legislation to address affordable housing as the nation faces a critical shortfall and more Americans struggle to pay rent.
The letter — penned by A Call to Invest in Our Neighborhoods, or ACTION, Campaign — asks congressional leaders to expand the Low-Income Housing Tax Credit by 50% and lower the Private Activity Bond financing threshold from 50% to 25%.
These actions could finance 1.93 million affordable rental homes in the next decade, the campaign said in a news release.
"The most important thing we can do to combat the supply-demand imbalance causing rents to skyrocket is to build and preserve more affordable housing with the Housing Credit,” Jennifer Schwartz, ACTION Campaign co-chair and director of tax and housing advocacy for the National Council of State Housing Agencies, said in a statement. “Our nation has underbuilt for too long and low-income families and seniors are paying that price.”
It is getting more expensive to rent and build, according to the release. Almost all developments awarded LIHTCs since 2019 have faced significant financing gaps due to increased costs, project delays or both, according to research by Abt Associates cited by ACTION.
The call for more affordable housing comes as rent growth slowed somewhat in October, though surveys show renters still feel financially strained.
The U.S. rental market experienced single-digit growth for the third month in a row with a 4.7% year-over-year increase last month, Realtor.com reported. Growth has slowed since January’s peak of 17.4% growth.
The slowed rent growth is consistent with recent for-sale data, suggesting the rental market is seeing typical seasonal cooling rather than impacts from the economy, Realtor.com said.
But October’s relatively low rental growth rate is still almost 1.5 times greater than the growth rate in March 2020, Realtor.com reported. The median rent in the 50 largest metros is $1,734 a month, a $47 drop from July’s peak.
Most landlords still plan to increase rent over the next year, Realtor.com found, citing results from its 2022 Fall Landlord and Renter Survey, though the number of landlords with those plans decreased from 72.1% in July to 70.4% in October.
Despite rent increases, inflation and rising interest rates will keep most people in the rental market, per the report. More than 67% of renters reported they are delaying purchasing a home as a result.
The survey suggests renters are feeling pressure. About 74% of renters who have moved in the past year said their rent increased, and about 63% of renters living in their current rental between one and two years also reported rent increases.
High rents, along with climbing interest rates, limited inventory and high prices in the homebuying market, are forcing some to relocate to more affordable areas, the New York Times reported. Realtor.com's survey showed that almost 70% of renters are considering moving in search of lower rents, up from 66.2% of renters who were considering that in July.
Using a study by Rent.com that examined renter migration by analyzing user activity on its platform from July to September, the NYT reported Chicago had the lowest share of inbound migration. It also had the highest year-over-year rent growth in October at 23.7%, according to Realtor.com.
Chicago’s rent growth is a full 10% higher than No. 2: Providence, Rhode Island, at 13.6%. That was followed by the New York City and Newark, New Jersey, region at 12.7%.
However, rent is decreasing in certain cities, including New Orleans (down 3.7%), Phoenix (down 1.6%) and Atlanta (down 0.8%), contributing to 1.8% year-over-year growth for the metros in the Sun Belt.
The South is seeing the highest share of inbound migration, according to the NYT. Biloxi, Mississippi, and Huntsville, Alabama, came in first and second, respectively.