Slowing Rent Growth Is Unlikely To Make Housing Affordable
Rent growth is slowing in several top U.S. markets, but that drop-off has not helped bridge the gap between wage growth and housing rents that is plaguing working Americans.
National multifamily rents grew 1.5% in May, marking the lowest year-over-year period of rental growth since 2011, according to Yardi Matrix’s survey of 121 markets. While slowing rent growth sounds like good news for cost-burdened renters, a new report from the National Low Income Housing Coalition suggests the slowdown is not enough, and says the gap between rents and wages has become so large that a full-time worker earning minimum wage is still unable to rent a two-bedroom apartment anywhere in the country, Construction Dive reports.
When it comes to one-bedroom apartments, the same worker can only afford one in 12 counties in the country spread across Washington, Arizona and Oregon. The study said U.S. renters earn an average of $16.38/hour, but said they would need to earn $21.21/hour, or nearly three times the federal minimum wage, to afford a typical two-bedroom unit.
Construction Dive said an infusion of affordable rental housing would be the quickest way to address this crisis, and some states and cities are already doing just that. California recently passed bills to create a $3B affordable housing bond, and last month New York Gov. Andrew Cuomo announced plans for a $20B five-year plan to add affordable housing in that state.