Skyrocketing Rent Creates a Housing Crisis That Raises More Questions Than Answers

August 2, 2022 by Tom Ramstack
Skyrocketing Rent Creates a Housing Crisis That Raises More Questions Than Answers
Apartment buildings. (Photo by Saru Roberts via UnSplash)

WASHINGTON — The Federal Reserve is bemoaning a new monthly report showing the highest inflation rate since 1982 while housing advocates in the Senate Tuesday said the result could mean more families living in cars.

A day earlier was the first of the month.

“That means the rent was due,” said Sen. Sherrod Brown, D-Ohio, chairman of the Senate Banking, Housing and Urban Affairs Committee. “For too many Americans, that rent is going up and up and up.”

Stories of hardships the housing crisis is creating were many during the Senate hearing but reaching agreement on a solution was elusive.


Democrats wanted more public assistance for renters. Republicans suggested reducing regulatory burdens on rental housing that get passed on as higher rents.

“We should pursue reforms that leverage the power of free enterprise,” said Sen. Patrick Toomey, R-Pa.

Both agreed a housing shortage they estimated at 3.8 million homes was keeping prices high, sometimes forcing tenants into the only substandard living conditions they could afford.

Matthew Desmond, a Princeton University sociology professor, said that in many places, one in four renters spends 70% of their income on housing.

He mentioned the example of Orlando, Florida, where rents rose 30% since March. Some of the renters are cutting back on health care and food to keep their homes, he said.

“This is the inflation problem on steroids,” he said. “They’re already living in the cheapest apartments available.”

He suggested expanding the federal government’s Section 8 vouchers, also known as the housing choice voucher program. It allows low-income applicants to receive Housing and Urban Development vouchers to pay their rent in privately owned apartments.

Another proposal Congress is considering would continue the Emergency Rental Assistance Program that started as a response to the economic downturn from the COVID-19 pandemic.

While millions of Americans faced eviction, Congress approved $46.5 billion under two funding packages to help tenants pay their rent or utilities. The money was distributed to states and local governments to pass out to eligible households under their existing or newly developed rental assistance programs.

Congress also is considering the Eviction Crisis Act, a bill introduced last year that would create an Emergency Assistance Fund with a $3 billion annual appropriation. It would be assigned to test, evaluate and expand strategies to help low-income persons maintain their housing during economic upheavals.


“Eviction is incredibly harmful to families and communities,” Desmond said.

He added, “Eviction is not just a result of poverty, it is a cause of poverty.”

Landlords who testified urged the Senate not to overlook the difficulties they face if they are unable to raise or collect the rent they need to pay their expenses.

The difficulties were exacerbated during the pandemic, when states and the Centers for Disease Control and Prevention ordered eviction moratoriums beginning in 2020 to prevent newly unemployed tenants from losing their homes. None of the moratoriums remain in effect.

Darion Dunn, managing partner of the Atlanta, Georgia-based real estate investment firm Atlantica Properties, said, “We must ensure that eviction moratoriums don’t encourage people to avoid paying their rent.”

Rather than relying heavily on public assistance, he said a greater supply of housing would reduce the demand, thereby bringing down rents.

Rosanna Morey, a small property owner in New York, said her state’s eviction moratorium sometimes became “a right to abuse the situation” for tenants.

She told about one of her renters who refused to pay rent during the moratorium despite the fact she was gainfully employed. She also damaged the property in a way her landlord was compelled to pay for repairs and cleaning.

“Landlords are not in the business of eviction but we should be able to in certain situations,” Morey said. “After all, we have families to support too.”

Economists are predicting rents will remain high through 2024 until inflation can be brought under control.

A contributing factor is the Federal Reserve’s decision this year to raise interest rates as the consumer price index continued escalating. The higher mortgage rates are forcing many would-be buyers to remain renters, keeping rents high.

Zumper’s National Rent Index reported a record high in July, making the median monthly rent for a one-bedroom apartment $1,450, up 11% from a year earlier. New York City was the highest at $3,780 a month.


Low-rent states are attracting more of the rent refugees “as people continue migrating to these states in search of more space and friendlier cost of living,” Zumper’s reported.

Tom can be reached at [email protected] and @TomRamstack

A+
a-

In The News

Health

Voting

Housing

August 2, 2022
by Tom Ramstack
Skyrocketing Rent Creates a Housing Crisis That Raises More Questions Than Answers

WASHINGTON — The Federal Reserve is bemoaning a new monthly report showing the highest inflation rate since 1982 while housing... Read More

WASHINGTON — The Federal Reserve is bemoaning a new monthly report showing the highest inflation rate since 1982 while housing advocates in the Senate Tuesday said the result could mean more families living in cars. A day earlier was the first of the month. “That means... Read More

Rents Reach 'Insane' Levels Across US with No End in Sight

Krystal Guerra's Miami apartment has a tiny kitchen, cracked tiles, warped cabinets, no dishwasher and hardly any storage space. But... Read More

Krystal Guerra's Miami apartment has a tiny kitchen, cracked tiles, warped cabinets, no dishwasher and hardly any storage space. But Guerra was fine with the apartment's shortcomings. It was all part of being a 32-year-old graduate student in South Florida, she reasoned, and she was happy... Read More

September 10, 2021
by Tom Ramstack
Congress Tries to Repair Rental Assistance Program

WASHINGTON -- Republican and Democrat lawmakers could not agree on much during Friday’s heated House hearing on the Emergency Rental... Read More

WASHINGTON -- Republican and Democrat lawmakers could not agree on much during Friday’s heated House hearing on the Emergency Rental Assistance Program, except that the funds were not reaching the renters and landlords quickly enough.  “Congress gave the Treasury Department $46.6 billion to help renters and... Read More

August 31, 2021
by Tom Ramstack
U.S. Attorney General Asks Lawyers to Help Renters Avoid Evictions

WASHINGTON -- The U.S. Justice Department sent out an urgent request this week for attorneys nationwide to volunteer to represent... Read More

WASHINGTON -- The U.S. Justice Department sent out an urgent request this week for attorneys nationwide to volunteer to represent an expected flood of renters trying to avoid eviction. A letter from U.S. Attorney General Merrick Garland asked "the entire legal community" to help prevent hundreds... Read More

Supreme Court Allows Evictions to Resume During Pandemic

WASHINGTON (AP) — The Supreme Court's conservative majority is allowing evictions to resume across the United States, blocking the Biden... Read More

WASHINGTON (AP) — The Supreme Court's conservative majority is allowing evictions to resume across the United States, blocking the Biden administration from enforcing a temporary ban that was put in place because of the coronavirus pandemic. The court's action ends protections for roughly 3.5 million people... Read More

August 26, 2021
by Tom Ramstack
Supreme Court Ruling Coming Soon On Federal Eviction Moratorium

WASHINGTON -- The Supreme Court is expected to rule within days on a lawsuit by associations of realtors that seek... Read More

WASHINGTON -- The Supreme Court is expected to rule within days on a lawsuit by associations of realtors that seek to overturn the federal extension of the eviction moratorium until Oct. 3. In a hearing on Monday, the realtors argued the moratorium violates their contractual rights... Read More

News From The Well
scroll top