Harvard study: Half of all renters in the USA are financially overburdened

Since the pandemic, real estate prices in the USA have gone through the roof. According to a Harvard study, half of all renters can no longer afford the high housing costs.

The young family Angela and Jonathan Patterson and their baby had to move from Miami to Orlando in the US state of Florida for work reasons. In 2021, her three-room apartment still cost $1,600 including utilities.

“Then the rent went up by $400, that was a shock. There was no announcement beforehand,” says Angela Patterson in an interview with NBC. Suddenly the couple had to shoulder a rent of $2,000 – without any additional costs. “It was hard, to be honest, we saved hard every month,” said the young woman.

Rents are higher than ever before

Many Americans feel the same way as the Patterson family. Although rents are no longer rising, they are stagnating at a record level.

According to a new study by the elite Harvard University, 50 percent of all renters can no longer afford the high rental costs. That means they spend more than 30 percent of their income on monthly rent, according to Sophia Wedeen, a researcher at Harvard’s Housing Studies Research Center. “22.4 million renters in the US were cost-burdened in 2022. Half of all renters. That’s a record.”

Families with low incomes are particularly burdened

Since 2019, rents in apartment buildings have risen by around 15 percent annually, and in higher-quality apartments by as much as 18 percent. This is no longer feasible, especially for people with lower incomes, says Wedeen: “Rents are no longer affordable. The cost of housing is at an all-time high. And families with low incomes have less left at the end of the month than ever before.”

The shortage of housing and, of course, inflation are responsible for the high real estate prices. After the corona pandemic, landlords responded to rising consumer prices and drastically increased rents.

This is particularly precarious for the younger generation. A good third of tenants are young people under 30, and the number is increasing because they cannot afford a loan for a condominium or a house due to the current high interest rates.

Wages are not rising at the same rate

There is also less and less affordable housing in Florida. Sheena Rolle from the civil rights organization “Florida Rising” advocates for tenants’ rights. Wages are simply not rising at the same rate as rents, she complains in the NBC interview. For some families this has dire consequences.

“We are already seeing homelessness in the middle class,” said Rolle. “Then there are two children here and one child there, and the parents have to sleep in different places. Or one parent sleeps in the car.”

Angela Patterson and her family were luckier. She was able to negotiate a discount with her landlord and stay in the apartment – despite the rent increase. “I’m grateful that we can stay and pay for electricity and water,” she says. “It’s tight, but somehow we’ll manage.”