Millions of Americans Forced to Move as Rent Prices Skyrocket Across US
Rent prices in the US rose 14% last year, hitting an average cost of $1,877 per month.
In cities like Austin, New York City, and Miami, costs have increased between 35 and 40%, with inflated prices expected to rise by an additional 10%, according to the real estate firm Redfin.
Higher rent prices are expected to be a key driving force in the coming months. With the cost of living becoming increasingly unaffordable, many Americans are being forced to move, or live in their cars. Three years into the COVID-19 pandemic, rent freezes and eviction moratoriums have expired, no longer aiding those who are struggling to pay rent.
“The fact is, for too many Americans, housing is unaffordable. We have an inadequate supply of homes- for both rent and for sale- and, of course, the lowest income families are being hit hardest,” Dennis Shea, executive director of the J. Ronald Terwilliger Center for Housing Policy at the Bipartisan Policy Center, told the Washington Post.
A report by the Federal Reserve Bank of New York states that rent amounts will continue to rise by 10% in 2022. Economists say there is usually a lag around 9 to 12 months before the housing prices are accounted for by inflation measures, and that rent prices alone could be responsible for keeping inflation levels high throughout the year.
In an attempt to weather the storm, the Biden administration began reallocating unused funds from its Emergency Rental Assistance program, which has a net worth of $46.5 billion. The American president has also vowed to add close to 100,000 affordable homes over the next three years, as well as urging states and local governments to reform zoning laws.
In the late 1970s the US was adding roughly 400,000 entry-level homes a year. In 2020, the market only added 65,000 of those entry-level homes.
Jenny Schuetz, a senior fellow at Brookings Metro, says that to improve housing affordability, three tools must be implemented: reforming land use regulation to allow smaller, more compact housing, increasing taxes on expensive/underused land, and expanding housing subsidies to low-income households.
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