USA Today reported the rental market has been hurting low-income earning people of color since the pandemic. As the demand for housing skyrocketed, so did the price of rental units, according to a Harvard Joint Center for Housing Studies. Higher quality buildings saw a 14 percent increase in rent.
USA Today reported the price of properties spiked by 17 percent last October, hurting low-income earning people of color the most. Lead author of the report Whitney Airgood-Obrycki said even though tenants were aided by federal citizens, the job losses caused by the pandemic resulted in their struggle to pay rent.
“After a bit of a dip in the first year in the pandemic, things just really came roaring back in 2021,” says Whitney Airgood-Obrycki, the lead author of the new report. “Households are being shut out of home ownership and there’s also the pent up demand from the first year of the pandemic when people were kind of staying home and not forming new households.” However, these wealthy renters often caused the price of rent to increase, directly effecting households of lower income.
From USA Today:
Nearly a quarter of Black renters were behind on rent in the third quarter of 2021, as well as 19% of Hispanic renters. The share of Asian renter households in arrears was slightly lower at 18%, while the share of white renter households was half that, at 9%.
“This disparity reflects long-term discrimination in labor markets that has consigned many households of color to low-wage jobs in the service industry,” says Chris Herbert, managing director of the Joint Center for Housing Studies. “And this sector suffered the most drastic employment cuts over the past two years, which has only compounded existing inequalities.”
Higher-income households increased the number of renters by 48 percent in the past decade, reported USA Today. The lack of options and high prices in the home-buying market have turned those high-income earning individuals toward renting. Additionally, the stock of low-cost rental units has gone down as the demand for high-end units has increased, reported USA Today. Now, the rental market is geared to meet the demands of those who earn more.
The report found that the construction of new apartments had doubled labor costs between 2009 and 2019 resulting in higher-priced rent. These units then become unaffordable to low-income earning families. “In the coming months, we are going to study whether affordability problems worsen for people who already experience unaffordability - Or if we’re going to see more unaffordability in general, among households that otherwise might have been more stable,” said Airgood-Obrycki via USA Today.