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Nearly Half of Renters Put Too Much Toward Rent
Source: Wall St. Journal
A record number of renters are spending more than 30 percent of their incomes on rent, which is a ratio that economists consider financially burdensome, according to a report released this week by Harvard University’s Joint Center for Housing Studies titled, “America’s Rental Housing: Expanding Options for Diverse and Growing Demand.”
Making sense of the story
More than 21 million households are burdened by how much they pay in rent, up from fewer than 15 million in 2001. Nearly half of renters are paying more than 30 percent of their incomes in rent, the report says. While that is a slight improvement from 2011, it remains above where it has been for most of the last 13 years.
Inflation-adjusted rents rose 7 percent from 2001 to 2014, while renter household incomes fell 9 percent, creating affordability challenges for many renters. In contrast, the number of rental units expanded by just 8.2 million, most of that from the conversion of single-family homes into rentals.
Another factor exacerbating affordability is that much of the new supply is aimed at higher-income renters. The median asking rent for new market-rate apartments hit $1,372 last year, a 26 percent increase from 2012.
The number of higher-income renters earning $100,000 or more has grown by 1.6 million over the last decade. Households over age 40 now make up the majority of renters, according to the report.
It is likely to take years for some of housing being built now to come down in price, leaving cities struggling to hold onto middle-class families.
Talking Points …
Water Conserving Plumbing Fixtures
Beginning January 2017, California Civil Code § 1101.4 requires that all homes built on or before January 1, 1994 must be equipped with water conserving plumbing fixtures. Although this law does not create a point of sale requirement (unlike water heater strapping and smoke alarm compliance), it does trigger a disclosure to the buyer (like carbon monoxide detectors). As the industry works through the application of the law, there is much confusion on everyone’s part as to what needs to be done and by whom.
Your Essence Realtor will help you sort through the requirements.