As more Americans struggle economically as a result of the downturn, seniors are finding more competition for affordable apartments and homes that are available for rent. Rising prices in the rental market pose challenges for seniors and baby boomers looking for affordable, independent living solutions and a new study by the Harvard Joint Center for Housing Studies (JCHS) is showing one in four renters, or 10.1 million households, spends more than half their income on rent and utilities. The report, “America’s Rental Housing: Meeting Challenges, Building on Opportunities” finds that increases in utility costs and a decline in jobs and incomes has put additional pressures on budgets for rental housing.
“In the last decade, rental housing affordability problems went through the roof,” said Eric S. Belsky, Managing Director of the Harvard Joint Center for Housing Studies and an author of the study. “And these affordability problems are marching up the income scale. In real terms, it means more people have less money to spend on household necessities such as food, health care, and savings.”
While housing cost burdens have been historically been more problematic in the low-income households, the report finds those in the bottom fifth of the household income distribution, over the last decade the number of renters even in the next two higher quintiles facing such burdens increased by one million households. In addition, more lower-middle income renters (56%, up from 38%) and more middle income renters (23%, up from 10%) are paying 30-50% of income for rent and utilities. As demand for rental housing increases as fewer households are able to purchase homes, the study’s authors feel that a strong government housing policy is needed to provide a foundation for future housing investments.
“While the need for affordable rental housing is growing, the squeeze on government budgets is putting these much-needed programs in jeopardy,” said Chris Herbert, Director of Research, Harvard Joint Center for Housing Studies and a study co-author. “Investments to preserve existing assisted housing may be cost-effective. But the public sector can’t tackle this problem on its own. Policy makers must look for ways to support efforts by the private sector to invest in both existing and new rental housing, while keeping prices affordable.”
The aging of the baby-boom generation will lift the number of renters over age 65 and boost demand for assisted units set aside for elderly households and for housing with accessibility features. Within the next ten years, “the sheer size of the baby-boom generation relative to its predecessor will push up the number of renters over age 65 by nearly 2 million, generating increased demand for assisted units set aside for elderly households as well as for conventional apartments,” said the report.