Rising rents in many cities of America are forcing millions of people to move; the average rent across the country rose by almost 14 percent last year.
Rents are surging dangerously in America
A real estate firm, Redfin, indicated rents increased by as much as 40 percent in bigger cities like New York, Austin, and Miami, which forced the masses to leave their areas.
To add insult to injury, the Federal Reserve Bank of New York issued a report last month, indicating Americans believe these prices will continue to rise by almost ten percent this year.
Likewise, a lot of local rent freezes and moratoriums have expired, which paved the way for this increase.
The chief economist of Redfin, Daryl Fairweather, also acknowledged rents shot up later in 2021, which according to him, is due to the reopening of the economy after the pandemic.
He suggested people did not have much disposable income in their pockets, so this increase is hitting them hard. Reportedly, these higher prices are likely to increase inflation even further this year.
However, many economists indicate the true reflection of the rising rents in inflation indexes would be shown almost after nine to 12 months.
My rent for my two bedroom is going from $865 to $995/month with no warning
So to clarify, any money I was planning on saving with a POSSIBLE upcoming promotion will now go to that rent increase
But just #grind harder right?#USA #PullingUpMyBootstraps#AffordableHousing pic.twitter.com/oTK9CmQmMn
— Lollie Condo (@CondoLollie) January 27, 2022
Affording a new house has become impossible in America
Amid all of these crises, the Biden administration diverted $46.5 billion of unused funds of the Emergency Rental Assistance program towards rental assistance for residents of Houston, San Diego, and Washington D.C.
In addition to this, Biden pledged to construct almost 100,000 affordable homes in the next three years by subsidizing developers, states, and local governments.
According to the Washington Post, the pandemic exacerbated the crisis, as homeowners continued making big profits out of the surging rent.
As per the 2018 census by Harvard University’s Joint Center for Housing Studies, almost 25 percent of renters use more than half of their income to pay rent, a number which experts believe surged dramatically since then.
Dennis Shea, who is serving as a director of the J. Ronald Terwilliger Center for Housing Policy at the Bipartisan Policy Center, noted the country is facing a shortage of houses for both renting and sales; low-income Americans are the real victims of this.
Many renters told the Washington Post their landlords managed to increase the rents somehow, even when local rent freezes were present. Mostly, renters claimed this is done by including new “amenity fees” for a variety of services, like trash collection.
So I know rent prices are rising all over the USA. Besides economics (demand drives cost), is there any other reason WHY? Are apartment complexes really seeing a 25-40% increase in their costs?? Or are they just taking advantage of the situation to increase profits?
— Ell is my Initial (@lindseycarp3187) January 30, 2022
Millennial renters stated due to the exponential rise in housing prices, it is now next to impossible to get a new house without inherited wealth.
Aleksei Valentín, a renter aged 39, told Washington Post the house which their parents bought in $30,000 is now worth more than half a million dollars; this makes the acquisition of the house difficult for the middle class.