Rents in the United States soar, leaving generations of younger workers behind

The cost of renting a home in the United States is on the rise and young workers have felt the sharpest pain, many of them hiring additional jobs or roommates to afford housing costs.

Household rents in 2021 rose 10% from pre-pandemic levels, according to Census Bureau estimates released last week. The figures came as rising health care and rental costs unexpectedly pushed US consumer prices last month.

Data from the office’s annual American Community Survey put the average U.S. rent at $ 1,037 in 2021, compared to $ 941 in 2019. Year-over-year increases in average household rent over the past decade have been typically 2% or 3% – an exception was the 5% increase from 2018 to 2019.

University of California freshmen Sanaa Sodhi, right, and Cheryl Tugade, search for apartments in Berkeley, California on Tuesday, March 29, 2022. (AP Photos / Eric Risberg / AP Images)

Among those most affected are recent graduates and other new entrants to the world of work, who have little savings and cannot afford to buy a home.

Take Maeve Kozlark, a PhD student at New York University.

The 23-year-old spent a year in an apartment in New York City’s Queens neighborhood with a door that wouldn’t lock. The landlord’s refusal to repair the catch prompted Kozlark to make a video on TikTok about it.

Billionaire DAVID RUBENSTEIN WARNS INFLATION WILL BE ‘HARD’ FOR THE FED TO REDUCE

A year and 230,000 views later, the lock was still broken when the owner announced a $ 1,000 raise in addition to an existing $ 2,500 rent, Kozlark said.

“So began our crazy quest to find something that was affordable and not a shoebox, which is pretty impossible,” Kozlark said, feeling lucky to have found a new rental place for $ 3,300 in Queens.

Similar reports of sharp price hikes and rent struggles abound across the country. In Austin, Texas, 22-year-old Skyler Lee signed a one-year lease for a two-bedroom apartment for which she and her boyfriend together pay $ 1950 a month’s rent.

Within a month of the move, similar apartments in the building were being rented for $ 2,400 a month, the price Lee expects to pay to renew his lease next year.

rent

SAN FRANCISCO, CALIFORNIA – A “for rent” sign posted in front of an apartment building. (Photo by Justin Sullivan / Getty Images / Getty Images)

In Chicago, 23-year-old Kelvin Angelo Cupay has decided to forgo rent altogether and move with his family to Chicago because he expects to shell out nearly $ 1000 in monthly rent, which he can’t afford while looking for a job.

On the west coast, 21-year-old Celine Pun initially added a roommate to her Santa Barbara apartment to make costs affordable. But she ended up moving in when the $ 600 monthly rent for her share of her three-bedroom apartment increased by $ 50 and some of her five roommates left.

“It was a very frustrating process,” Pun said.

‘TRULY UNPRECEDENTED’

In addition to the problems of renters, rents in the professionally managed sector – usually larger properties managed by management companies – have increased even more dramatically.

According to the Harvard Joint Center for Housing Studies, annual rental growth reached 11.6% in late 2021 and early 2022, about three times that of the five years preceding the pandemic. At the same time, vacancy rates have fallen to their lowest since 1984 as post-pandemic demand rises.

“It’s a truly unprecedented market in many ways,” said Whitney Airgood-Obrycki, a research associate at Harvard Housing Center.

A key factor in all of this was the COVID-19 pandemic.

With the spread of coronavirus infections in 2020, the richest people have moved to summer homes or to remote areas to avoid contagion, leading to vacancies and steep rent cuts in many cities.

Now, owners are recouping those losses while also trying to recoup higher maintenance and insurance costs, said Alexandra Alvarado, marketing director at the American Apartment Owners Association, which represents smallholders.

apartment for rent in New York

A “For Rent” sign outside an apartment building in the East Village neighborhood of New York, United States on Tuesday, July 12, 2022. Apartment rents in Manhattan hit another record in June, with even more pain for potential tenants as on mar (Gabby Jones / Bloomberg via Getty Images / Getty Images)

With low supply in large cities and rural areas where more people have moved to work remotely, landlords can ask potential tenants to show higher incomes than previously requested, he said.

In addition to demand, the millennial generation mostly in their thirties continue to live in apartments and are unable to buy homes, said Michael Keane, an adjunct professor of urban planning at New York University.

FEDERAL RESERVE INCREASES INTEREST RATES BY 75 BASE POINTS FOR THE THIRD MONTH CONTINUOUS

“They are somehow hindering the new rental population that was behind them,” he said.

Some minority groups are also likely to feel the blow more. Black renters are less likely to have parents who own homes – a key source of wealth in the United States – and can help them financially, said Ingrid Gould Ellen, professor of urban policy and planning at New York University.

A recent survey by real estate firm Zillow found that black renters are being asked to pay higher security deposits and more entry fees than their white counterparts.

All of this has created a market where the security of any apartment can be a big problem in some areas. In New York, long known for its competitive and expensive rental market, apartment hunters reported meeting landlords seeking tenants with an annual salary at least 40 times the monthly rent, or with guarantors earning more than 80 times. the monthly rent.

Caleb Seamon, 22, a recent graduate, began delivering for Uber Eats alongside his full-time job at a think tank to afford housing. Even so, Seamon says he found an apartment in New York only because one of his roommate’s parents acted as guarantors.

CLICK HERE TO READ MORE ABOUT FOX BUSINESS

“It’s an extraordinarily difficult and privileged thing to be able to get even the cheapest apartment on the market right now here,” Seamon said.

Leave a Comment

%d bloggers like this: