In Many Cities, Rent Is Rising Out of Reach of Middle Class

[hue]

http://www.nytimes.com/2014/04/15/business/more-renters-find-30-affordability-ratio-unattainable.html?_r=1

MIAMI — For rent and utilities to be considered affordable, they are supposed to take up no more than 30 percent of a household’s income. But that goal is increasingly unattainable for middle-income families as a tightening market pushes up rents ever faster, outrunning modest rises in pay.

The strain is not limited to the usual high-cost cities like New York and San Francisco. An analysis for The New York Times by Zillow, the real estate website, found 90 cities where the median rent — not including utilities — was more than 30 percent of the median gross income.

In Chicago, rent as a percentage of income has risen to 31 percent, from a historical average of 21 percent. In New Orleans, it has more than doubled, to 35 percent from 14 percent. Zillow calculated the historical average using data from 1985 to 2000.

Nationally, half of all renters are now spending more than 30 percent of their income on housing, according to a comprehensive Harvard study, up from 38 percent of renters in 2000. In December, Housing Secretary Shaun Donovan declared “the worst rental affordability crisis that this country has ever known.”

Apartment vacancy rates have dropped so low that forecasters at Capital Economics, a research firm, said rents could rise, on average, as much as 4 percent this year, compared with 2.8 percent last year. But rents are rising faster than that in many cities even as overall inflation is running at little more than 1 percent annually.

[upaloopa]

1. Add to this that renters get no deduction on their

tax return for any part of the rent. There should be a renter's credit on tax returns.

[kristopher]

2. This is a follow-on from the real estate bubble, isn't it?

A decade of 'flipping' homes, skyrocketing property prices, easy credit and low interest rates shifted the ratio of buyers to renters and lowered the supply of rental properties.

Along comes the recession and the dynamic shift the ratio back to the more normal position with perhaps a bit of overshoot; increasing rental demand relative to supply.

Add static wages and high unemployment due to the recession and I'd think this situation is to be expected. Since proper policies could have prevented or mitigated the problem, the disfunction-by-design of the Republican party has scored another victim.