The Urban Institute recently sponsored its second annual Data, Demographics and Demand symposium. The subject was the future of multifamily housing. More than half the new households formed in the next six years will be renters rather than homeowners, yet renter incomes are on average only 70 percent of homeowner incomes. Five experts in rental housing offered their observations, summarized in the most recent MetroTrends blogpost (put out by the Urban Institute). It is a very interesting read, especially for me, living in a college town that is experiencing a boom in multifamily construction. Three quick points:
- Rental supply is tight and getting tighter. Just to keep up with normal rental demand, including the yearly loss of about 100,000 units, the country needs 400,000 new rental units a year.
- Much of the rental housing currently under construction will be affordable only to the top 4 to 5 percent of renters. Other renters will need to rely on an already-constrained supply of existing housing, much of which will be single-family rentals.
- With high rents, stagnant incomes, and constrained supply, one panelist said “it would not shock” him if the 25 percent of renters who pay more than 50 percent of their income for rent and utilities goes up to 35 percent in a few years time.
The post also suggested the roles local, state and national government can play to help solve these challenges. I urge you to read the original MetroTrends post.