Is America Experiencing a Rental Crisis?
Jose Nino
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There’s a growing rental crisis taking place across America. According to a recently published Bloomberg report, various Americans are having trouble making rent.
In this report, rental costs in the United States are surging upwards at the highest rate in three decades. For the first time, rents surpassed a median rate of $2,000 per month for the first time ever.
In most major cities, rents are higher than they were pre-pandemic.
Areas in the outskirts of cities have witnessed large influxes of new renters throughout the pandemic. As a result, rents have risen disproportionately higher in these areas than others.
People who have returned to large cities after the pandemic have only placed upward pressure on prices.
Furthermore, rising interest rates have now prevented prospective buyers from acquiring homes. Now, they’re being compelled to rent.
Kate Reynolds, the principal policy associate at the Washington, DC-based think tank Urban Institute, said: “It’s pretty much the perfect storm for renters right now. Those renters and their landlords don’t have a place to turn if they’re unable to pay the rent.”
Simultaneously, renters are attempting to deal with the impact of inflation in nearly every facet of their lives.
Around 54% of renters earn below $50,000. Similarly, the annual median household income for renters is around $42,500, which is well lower than the national median of $67,500, per Zillow reports.
Single family rents increased by 14% from May 2021 to May 2022.
In several cities such as Miami and Orlando, rents have swelled by 40% and 25%, respectively. Las Vegas rents rose by 16.7% in May from that same month in 2021.
Cities such as Atlanta have also experienced rents surge 14.8% from 2021 until present. The generalized wave of people moving from the West or the Northeast to the Sun Belt has largely accelerated this trend.
40% of all households that are delinquent on their rent payments indicated that they are likely to be evicted or foreclosed in the next two months. These households constitute roughly 5.4 million households, per the report.
Tyler Durden of ZeroHedge observed that people are increasingly turning to debt to attempt to cover their everyday costs such as housing. He noted that “Credit card balances were up $46 billion in Q2 of this year and 30% of Americans have admitted to using credit cards or loans to meet ‘spending needs in the prior week’. This number was up from 23% in early January.”
America is moving towards more of a rentier state, where people can no longer afford to own their homes and are compelled to rent instead. This will impede family formation, degrade social trust, and encourage transience.
America First nationalists should put forward a common sense reform package that consists of zoning deregulation (scrapping environmental regulations that constrict housing supply), family tax credits, and measures that allow for more single-family housing development.
Sorry, Mr. Schwab, owning nothing will not make people happy.
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