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Rents Have Risen More Than Incomes in Nearly Every State Since 2001

December 10, 2019 at 1:15 PM

Growth in median rents has outpaced growth in median renter income since 2001 in nearly every state, as we explain in our updated state rental assistance fact sheets. About 23 million low-income renters pay more than half of their income for housing, partly due to this gap between rental costs and income. While the need for additional federal rental assistance continues to grow, federal investment largely remains stagnant.

Renters’ incomes generally are recovering from the 2001 and 2007-2009 recessions but, in nearly half of states, the median renter household still earned less in 2018 than in 2001 in inflation-adjusted terms. At the same time, rental costs have risen, including in states where real incomes have fallen. The inflation-adjusted cost of the typical apartment (median rent and utilities) has grown in every state since 2001, with some states home to extreme spikes: rental costs rose 30 percent in California, 40 percent in Hawaii, and 59 percent in the District of Columbia between 2001 and 2018. Delaware and New Hampshire have some of the largest gaps between median rents and median renter incomes; in the latter, real incomes fell 19 percent between 2001 and 2018, while real housing costs grew 8 percent during that time. (See graphic below.)

Rental costs haven’t risen as dramatically in every state. In Arkansas, Indiana, Ohio, and Wisconsin, inflation-adjusted rental costs have grown less than 3 percent since 2001. Nevertheless, the real incomes of many renters in these states have dropped since 2001, meaning more affordable housing is still out of reach for many. In Ohio, the typical apartment costs essentially what it did in 2001, but the typical renter household earns 9 percent less.

Typical workers haven’t seen their wages grow in years, yet the cost of rental housing continues to rise, squeezing household budgets. A parent working full-time earning the federal minimum wage cannot afford a modest two-bedroom apartment in any state without receiving rental assistance or making tough choices between paying the rent or meeting essential daily needs such as food, medicine, and child care. Parents aren’t the only ones struggling to afford their rent. Most working-age, non-disabled renters are working, but at jobs with wages too low to pay the rent.

When low-income renters can’t find a decent, affordable home, they’re likelier to face eviction and homelessness. Renters across the country pay more than half their income for rent, our fact sheets show, and people in every state, particularly children, experience homelessness. (For more on how to use our rental assistance fact sheets, see our new guide).

Despite the need for rental assistance, more federal dollars go to homeownership subsidies that mainly benefit higher-income households. Fully 3 in 4 low-income renter households in need don’t get rental assistance due to limited federal funding. If rents continue to rise, housing affordability problems could worsen, particularly if another recession strains family budgets.

In the short term, the President and Congress should fully fund federal rental assistance for the 10 million low-income renters who now rely on it to afford their homes. Given the overwhelming need, states and localities should also develop or strengthen their own rental assistance programs.

In the long term, policymakers should make significantly expanding rental assistance a top priority for housing policy. Our communities only thrive when we all have access to decent, affordable housing and a roof over our heads.

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