The Future of America’s Rental Housing 2022
For the first time since the onset of the COVID-19 pandemic, the Joint Center for Housing Studies at Harvard University recently released America’s Rental Housing 2022 report. This report demonstrates the instability of the rental market in contrast with an inflated economy and continued pandemic.
Here are a few takeaways from the report that you should know with some other resources tied in for Texas-specific housing data.
The supply and demand of housing continues to create wider needs across the country for affordable housing units. The vacancy rate of apartments across the country “dropped to just 5.8%- its lowest reading since the mid-1980s” (1). The vacancy rate fell even lower to 3.7-4.0 for lower and moderate-quality buildings, the category most likely to be affordable for renter households. Vacancy rates in Texas’s major metropolitan areas remain only slightly higher than the national average with DFW, Austin, San Antonio, and Houston reporting vacancies of 5.8%, 6.2%, 6.6%, and 7.1% respectively.
This sharp decrease in the supply of rental housing is correlated with surging rental costs in many places across the country. Rental prices surged upwards of 4% for lower-quality apartments and up to nearly 14% for higher quality units (1). The Harvard study does not focus on individual metropolitan statistical areas (MSAs) in Texas, however, renters in Texas are also familiar with these rent increases. Texas A&M’s data demonstrates that the four largest MSAs in Texas saw average year-to-year rent increases of 9.5% in Houston, 19.9% in Austin, 14.1% in DFW, and 12% in San Antonio. One estimate of Austin’s market in particular ranges all the way up to a massive 40% increase in rent from year to year.
The rental market is rebounding and leaving many low-income renter households behind, exacerbating existing housing inequities in place for working-class people and communities of color in particular. Unfortunately, COVID-19 only continues to play off of these same existing patterns. In particular, this report shows that Black renter households are particularly overrepresented in the lowest income groups nationally.
There is a very limited amount of data published on the racial demographics of renters in Texas. But here is what we do know:
- Black and Latino renters in Texas are far more likely to see high rates of eviction in their neighborhoods. See below for a snapshot of this data in Houston from the Eviction Lab.
- Black and Hispanic Texans are also the least likely to own their homes due to a variety of barriers including down payments, credit, and a shortage of affordable housing. Only 8.3% of Black households in Texas own their homes. This is compared to 27.7% of Hispanic households owning their homes and 58.8% of their white counterparts. This huge disparity in the homeownership rates likely pushes more BIPOC folks into renting and contributes to a larger racial wealth gap.
The good news is that the last two years showed us that local, state, and federal entities are able to stabilize at-risk renter households through a variety of different mechanisms. The two main mechanisms for stabilizing low-income renter households over the past two years are :
- Eviction moratoria for non-payment of rent. Many people lost jobs and sources of income in the past two years and with it their ability to pay rent. Eviction moratoria offered many the protection of keeping their homes while they continued looking for jobs and/or sheltering from high rates of COVID-19 transmission
- Rent relief – though not perfect in its’ implementation, rent relief provided a much-needed resource for many who either lost jobs or saw decreased wages during the pandemic. Rent relief helped those with back payment of rent to get current with their landlord prior to the eviction moratorium expiring.
- Expanded unemployment, stimulus checks, and the child tax credit all had positive housing outcomes associated with them
This is a particularly precarious moment in the state of America’s rental housing, especially for our nation’s lowest-income renter households. We do have the tools to meet the moment to ensure that no one is losing their housing not just in the middle of a pandemic but during “normal” times too. Advocates should continue pushing their elected officials to expand access to rent relief while pushing for new affordable housing development, particularly for folks at 0-40% of the AMI (area median income) who are the most likely to fall into homelessness.