Housing affordability remains an issue for a large number of working renters, according to a new report from the Center for Housing Policy at the National Housing Conference.
In its Housing Landscape 2016 report released in February, more than 9.6 million low- and moderate-income working households were severely cost burdened, meaning they spend more than half their income on housing costs, in 2014.
As the share of working homeowners with severe cost burdens continued to decline in 2014, affordability burdens for working renters increased slightly. One in four, or 25.1% of, working renters were severely cost burdened in 2014 compared with 16.2% of working homeowners. This was the first uptick in the share of working renters with severe cost burdens in three years.
This can partially be attributed to the increased demand for rental housing. More working households are renting rather than owning. In fact, in 2014, 52.6% of working households rented, up nearly 2 percentage points from 2011. That demand is also having an effect on rents. According to the report, median rents for working renter households increased by more than 6% nationally between 2011 and 2014 and by even more in areas seeing strong economic growth.
“Working households are increasingly more likely to be renters rather than homeowners,” says Mindy Ault, research associate and report author. “Even given increases in median household incomes, the lasting effects of the foreclosure crisis pushing working owners into the rental market, combined with rising rents, make it more difficult than ever for working households to save up enough to buy a home and begin building wealth.”
The report also outlines local, state, and federal policies that have been critical for the creation and preservation of affordable housing, such as the low-income housing tax credit, the HOME program, Community Development Block Grants, the Choice Neighborhoods Initiative, and tax and zoning incentives. But it also calls for subsidies to aid working renter households, including Housing Choice Vouchers and Sec. 8 rental assistance.