What Record Rent Growth Looks Like: Pawning Belongings, Going Hungry, Fearful Of Tomorrow
Ten years ago, living in the luxury condo she owned in Los Angeles, Barbara never pictured herself on the verge of homelessness.
Today, the threat of eviction looms over her daily life.
“I loved my place,” Barbara said. “But it just got too expensive, and I had to sell it back to the bank. … Now, I’m just trying to prevent living in a tent.”
A growing number of Americans like Barbara — once upwardly mobile, now paycheck-dependent — struggle to pay their rent.
The 76-year-old former real estate agent has developed a medical disorder that prevents her from working and now lives on Social Security and whatever else she can scratch together. Somehow every month, she manages to scrape up the $1,700 it costs to lease a one-bedroom apartment in West Hollywood.
But that hasn't stopped her landlord from using intimidation tactics to try to force her out. Barbara, who asked Bisnow to conceal her last name for fear of retaliation, said she has been brought to eviction court twice for failing to pay rent on time.
“I’ve spent a lot of time in pawn shops,” she said. “I can’t order food or takeout or anything like that, it’s too expensive. I don’t go out unless it’s to the doctor. It costs money. Everything costs money.”
Barbara is hardly alone in living in month-to-month fear as housing costs rise beyond many Americans' means.
The median monthly asking rent in the U.S. surpassed $2K for the first time in May, an annual increase of 15%, according to Redfin. Exorbitant increases at a time of skyrocketing inflation mean many renters are falling behind, especially as the rate of rent growth outpaces changes to income.
Since 1986, there has been a 282% increase in nationwide rent, while the federal minimum wage has only increased 116%, according to homelessness prevention organization Family Promise.
In booming cities like Austin, rental rate growth far surpasses the national average. The Texas capital saw asking rents surge 48% year-over-year in May — according to Redfin, the largest increase on record in any metro area since at least 2019, when the company began collecting data.
“It’s sad,” HousingWorks Austin Executive Director Nora Linares-Moeller said of the city’s affordability crisis. “Austin is changing so dramatically, so quickly, that it’s almost unrecognizable, especially for people who have lived in Austin all their lives.”
Rent growth, especially in areas of high in-migration like Texas, is driven mostly by demand. But a nationwide shortage of for-sale homes, accompanied by historically high borrowing costs, are also playing a role. Rising mortgage rates, now sitting at 5%, are forcing many would-be homebuyers to continue renting.
These demand-side pressures keep rents sky-high, Redfin deputy chief economist Taylor Marr said in a statement.
Price hikes are not exclusive to cities in high-growth areas, nor do they only put pressure on the poor. Forty-eight-year-old veterinary practice manager and consultant Nicole Puzio said a third of her income goes to paying the $2,300 a month it costs to rent her studio apartment in a luxury building in Jersey City. In September, her landlord plans to raise the rent by $600 to $2,900 a month. For new tenants, the starting rate for a studio is $3,200, she said.
“That’s just price gouging at that point,” she said. “On principle alone, that really irritates me.”
The added cost means Puzio has a difficult choice to make: change jobs or move into a different building. It also allows little room to go on vacations or save for retirement, she said.
“I’m probably not as unfortunate as a lot of people,” she said. “But it still does stink — I mean, I’m 48, I don’t want to live in a studio.”
The more than 25% increase in rent faced by Puzio is hardly unheard of.
Carroll, a real estate investment manager with more than 31,000 units across eight states, has raised rents by as much as 30% over the past year. CEO Patrick Carroll said the increase is driven in part by the nation’s supply-demand housing imbalance as well as the need to offset rising expenses.
“Everyone is feeling the pinch of inflation, and nothing’s really different from an ownership standpoint,” he said. “Everything is more expensive — it costs more to run the properties and employ the people who run the properties. And it costs more to finance the properties when we buy them."
Patrick Carroll said he would like to see the public sector better incentivize affordable housing. So far, his company has been unable to make an affordable deal pencil, especially in an inflationary environment.
“In affordable housing or rent-controlled properties, you don’t have the ability to raise rents,” he said. “When you talk about becoming part of the solution, there’s got to be a way where the government can make things attractive for the private sector — like myself — to buy, manage and build these properties.”
Cata Romo, director of tenant advocacy organization Stay Housed LA, said renters have rights they can leverage in scenarios like the one faced by Barbara.
“A lot of people, with just a few light fear tactics, will leave,” Romo said. “Some people leave that day. They’re scared, and they spend their last penny getting out their dog and their cat and their kid’s toys, because they don’t want that [eviction] mark against them.”
Tenant rights aside, the odds are stacked against renters involved in eviction proceedings. According to the National Coalition for a Civil Right to Counsel, 88% of Los Angeles landlords in eviction courts have legal representation, versus only about 4% of tenants. This could change if the Tenant Bill of Rights is adopted by the Los Angeles County Board of Supervisors.
The bill would guarantee a slew of protections for renters in LA, who Romo said comprise 60% of the city’s population.
“This is really, really important to have in place so that we don’t have this big wave of poverty with a recession that might come,” she said. “Even if it doesn’t come all at once, [evictions] will still be happening in little ways here and there without some kind of protection.”
Homelessness, especially among low-income individuals, is a growing concern as the U.S. hurtles toward a recession, Linares-Moeller said. In order to house the growing number of Austinites who qualify for affordable housing, the city needs to build 2,300 new units per year. Over the past three years, the city has built just 238 of these units, per HousingWorks data.
“We are nowhere near the goal of what we need,” Linares-Moeller said. “We are seeing people experiencing homelessness because they can’t afford to stay in their place.”
Once a homeowner with a thriving career, Barbara is now among a growing number of renters who could become homeless if their rent continues to go up. And while her situation may seem extreme, Linares-Moeller said it could be the reality for a growing number of people if decisive action is not taken to alleviate America’s affordability crisis.
“The solution is affordable housing,” she said. “Whether it’s rentals or homeownership, there has to be a way.”