The National Low Income Housing Coalition’s “Out of Reach 2014” report was just released, and its conclusions are rather grim: the nation needs about 7 million new units for “extremely low income” households.
In other words, if the rule of thumb states that households shouldn’t spend more than 30% of their income on housing, then today 1 in 4 renters who have very low incomes spend more than half their earnings on rent.
Considering that there is a sharp plunge in home prices, still many people can only afford to rent instead of buy. Yet, there aren’t enough affordable units to supply the demand.
Worries about housing costs began when the recession started in 2008, because the home-price bubble bust led to a wave of foreclosures and a weak job market. That pushed many Americans to rent, because being able to afford their home was simply out of reach. What is more, many homes were converted by investors into rentals.
US Housing Secretary Shaun Donovan calls the state of the current rental market a “silent crisis” for the economy. Back in December 2013 he noted: “We are in the midst of the worst rental affordability crisis that this country has known.”
Read the full story at The Christian Science Monitor.