Fewer Americans can afford a home, more and more have to rent shelter and the number of rental units they can afford is steadily shrinking.
Those are some of the findings of “America’s Rental Housing 2020,” an annual study of rental housing in the U.S. by Harvard University’s Joint Center for Housing Studies.
Alabama falls pretty squarely in the middle of this overall grim picture. We can say we fare a little better than the national average but only barely. A separate, state-by-state 2019 study by the Harvard Center found that the number of rental units under $1,000 a month in Alabama dropped 9 percent between 1990 and 2017, compared to a national average of a negative 18 percent.
The only standout statistic highlighted for Alabama in 2020 was that Alabama had one of the highest increases in single-family rentals in 2018, 14,000 units. This is not good news for the middle and lower level of rent seekers, because single-family homes and large multi-family buildings are at the top of the rental heap.
In the last decade in the U.S., there has been a shift in total rental stock to big, high-rent, multifamily buildings and away from small and midsize buildings.
“This shift has effectively shrunk the middle of the rental market,” says the report. “And despite the recent strength of multifamily construction, much of the rental stock is aging and in need of maintenance and updating. At the same time, rental deserts — providing only limited housing options for renter households — exist in a variety of communities from urban to rural, and the barriers to multifamily development in these locations remain formidable.”
Most of the recent growth in renters has been among high-income households. The rising cost of home ownership has kept high-income households in the rental market, and those are the kinds of rentals currently being built.
“Shortages of affordable rental housing are apparent in every region of the country and every location,” the report concludes. “Housing instability and homelessness are again on the rise. All of these trends underscore the urgent need for large-scale investment in good-quality, affordable housing that policymakers can no longer ignore.”