It's going to get worse before it gets better. The number of “severely cost-burdened” households—those who spend at least half their income on rent—could increase 25% to 14.8 million over the next decade, Harvard research says, including one million Hispanic households and one million elderly households.
In NYC and LA alone, over one-third of middle-income renters are “severely cost-burdened,” the report says. As it stands, the old rule of spending no more than 30% of income on rent is becoming increasingly useless by the day. If rents and wages both increase at 2% a year--which it doesn't look like it will--demographic trends alone would raise the number of severely burdened renter households by 11% to 13.1 million by 2025.
But wages have only grown 0.2% in Q2 ’15, the slowest pace since 1982. Enterprise Community Partners (the co-author of the research report) senior director of research Andrew Jakabovics echoed the Department of Commerce’s notion, saying telling Bloomberg that affordable housing is the only cure to the rising-rents epidemic. [Bloomberg]
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