January 14, 2016 · Rental Trends

Mid-size U.S. metro areas face largest growth in share of renter households paying unaffordable rent

Jacksonville, Richmond and Hartford Metro Areas Show Highest Percent Change of Severely Burdened Renters Nationwide from 2005 to 2014

For Immediate Release

January 14, 2016
Contact: Maya Kriet, Group Gordon
212-784-5710
mkriet@groupgordon.com

Mid-Size U.S. Metro Areas Face Largest Growth In Share of Renter Households Paying Unaffordable Rent, Make Room Analysis Finds

Jacksonville, Richmond and Hartford Metro Areas Show Highest Percent Change of Severely Burdened Renters Nationwide from 2005 to 2014

Make Room, a nationwide campaign giving voice to American renters, today released findings showing that over the past decade U.S. metro areas with populations less than 2.5 million have faced the largest increase in the share of renters paying more than half of their household income (before taxes) toward rent and utilities.

The growth in the share of renters paying unaffordable rent highlights how many Americans continue to be left behind despite a recovering national economy.  When renters must pay such a large share of their income on rent, they are often forced to choose between paying their rent and paying for groceries, medicine, childcare and other essentials. Housing experts consider housing costs of more than half of income a “severe” burden for renters.

“The shortage of affordable rental homes is a worsening, nationwide problem that must be addressed. Focus tends to center around affordability issues in high-density, high-cost coastal cities, but the data shows that mid-size cities across the country have felt the squeeze most during the past decade,” said Angela Boyd, managing director of Make Room.

The Make Room campaign, launched in May 2015, is advocating for smart policies such as inclusionary zoning and dedicated funding sources to encourage new construction and preservation of existing affordable homes. This should complement an expansion of federal resources for affordable housing, such as rental assistance vouchers and tax credits for developers, which keep rents affordable to families earning lower incomes.

While the main drivers for rising rent burden differ by metro area and state, there are some common threads. For example, in many cities wages for lower-paid workers have not kept up with a nationwide trend of rising rents.

Additionally, many metro areas have not approved enough new apartments to accommodate a surge in renters, which has been driven by growing numbers of young, newly formed households and a decline in homeownership in the wake of the foreclosure crisis.

From 2005 to 2014, renters’ struggles grew by the largest amount in the Jacksonville, Florida metro area, where the share of renter households paying unaffordable rent increased by 7.2 percentage points. Jacksonville is followed by the Richmond, Virginia and Hartford, Conn. metro areas, where the share of renters paying unaffordable rent rose 6.2 and 5.1 percentage points respectively.

In each of these metro areas, construction has failed to keep pace with the rising demand for non-luxury rental homes.

In the Jacksonville metro area, half as many apartments were built as there were new renters from 2005 to 2014. And renters in the Richmond and Hartford metro areas fared worse, with only one new apartment constructed for every four new renter households.

Below is a breakdown of the top 10 U.S. metro areas with the fastest-growing share of severely burdened renters. See this interactive map of the top 50 metro areas.

 

PERCENT OF RENTERS SEVERELY RENT BURDENED*
Metro Area 2005 2009 2014 Change 2005-2014
Jacksonville, FL 21.3% 26.2% 28.4% 7.2%
Richmond, VA 20.6% 23.1% 26.8% 6.2%
Hartford-West Hartford-East Hartford, CT 23.0% 27.6% 28.1% 5.1%
Orlando-Kissimmee-Sanford, FL 24.9% 30.9% 29.9% 5.1%
Virginia Beach-Norfolk-Newport News, VA-NC 20.3% 24.3% 25.2% 5.0%
Sacramento–Roseville–Arden-Arcade, CA 25.0% 26.8% 29.9% 4.9%
Los Angeles-Long Beach-Anaheim, CA 28.1% 30.2% 32.8% 4.7%
Providence-Warwick, RI-MA 22.9% 25.6% 27.2% 4.3%
New Orleans-Metairie, LA 28.2% 31.9% 32.4% 4.2%

 

Nationally, 11.4 million families, or 26.4 percent of the 43.1 million U.S. renter households, spend at least half their income on rent according to 2014 Census data, the latest available.  That’s up from 11.2 million in 2013.

While the nationwide share of severely burdened renters has declined from a peak of 28 percent in 2011 during the aftermath of the recession, it is far higher than in 2005, when it was 24.7 percent. Due to population growth, the total number of U.S. households paying more than half of their income on housing costs has reached an all-time high.

On a state-by-state basis, Make Room analysis finds that the state with the highest percent change of severe rental cost burden is Hawaii, where the share of renters facing severe difficulty paying rent grew by 6.9 percent from 2005 to 2014. Hawaii is followed by Maine and Alaska, where the share of renters with unaffordable housing costs rose 6.5 percent and 6 percent respectively during this period of time.

The top 10 states with the largest growing share of severely burdened renters are as follows:

 

PERCENT OF RENTERS SEVERELY RENT BURDENED*
State 2005 2009 2014 Change 2005-2014
Hawaii 22.4% 27.6% 29.3% 6.9%
Maine 19.3% 23.5% 25.8% 6.5%
Alaska 17.1% 14.2% 23.2% 6.0%
Montana 17.8% 19.3% 23.5% 5.7%
North Dakota 14.6% 18.6% 19.8% 5.2%
Connecticut 24.1% 28.6% 28.6% 4.4%
Rhode Island 23.8% 25.7% 28.2% 4.4%
Delaware 20.5% 25.5% 24.8% 4.4%
Wyoming 15.4% 17.2% 19.6% 4.2%

 

Enterprise Community Partners is the sponsoring partner of the Make Room campaign, with the collaboration and resources of partners such as the MacArthur and Ford Foundations.

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About Make Room:

Make Room gives voice to struggling renters and elevates rental housing on the agendas of our nation’s leaders. We’re advocating for better policies and telling the stories of real families who can’t make rent today. Learn more at www.MakeRoomUSA.org.

About Enterprise Community Partners:

Enterprise works with partners nationwide to build opportunity. We create and advocate for affordable homes in thriving communities linked to jobs, good schools, health care and transportation. We lend funds, finance development and manage and build affordable housing, while shaping new strategies, solutions and policy. Over more than 30 years, Enterprise has created nearly 340,000 homes, invested $18.6 billion and touched millions of lives. Join us at www.EnterpriseCommunity.com or www.EnterpriseCommunity.org.

 

* Numbers may not add up due to rounding.