Finding an affordable apartment to rent is challenging in many countries, including the US, Japan, and Spain. In the US, over half of renters already pay more than 30% of their income towards rent. Recent data indicates that rent is consuming a larger portion of tenants' income across nearly all states, a trend exacerbated by ongoing economic challenges and housing shortages. Significant increases in rent have been observed since the onset of the COVID-19 pandemic, with the rental vacancy rate in New York City dropping to a record low of 1.4%, and in Boston, it was 2.6% at the end of last year [1adfbfc0]. The availability of apartments is even tighter for lower-priced apartments, with 86% of households in New York City earning $25,000 or less being severely rent burdened. Expanding the housing supply is the main way to lower rents, but it is challenging in dense urban areas. The historically low vacancy rate in New York City highlights the need for more homes, especially for lower-income residents. The cost of moving, including first and last month's rent and broker's fees, can be cost-prohibitive, locking renters into their current homes. The rental vacancy rate in the US is slowly improving, but the price of rent has been falling as the vacancy rate increases due to a surge in the construction of multifamily rental buildings in other parts of the country. However, the increase in multifamily building is starting to slow down due to high costs and elevated interest rates for construction loans. Developers are pulling back on construction due to oversupply in some areas [5d81e1e3].
In recent developments, housing costs in the US are projected to drop in the coming months, following the Federal Reserve's recent interest rate cut of 0.5% announced on September 18, 2024. This marks the first rate cut since 2020, and experts believe it will soften rental demand as potential homebuyers enter the market. Already, rental prices have begun to decline in cities like Austin, Texas (1.1% drop) and Phoenix, Arizona (0.8% drop). The median rent for a studio in a two-bedroom apartment is now $1,484, down from $1,641 last year. Experts predict that the rate cuts will take 3 to 12 months to fully impact the economy, easing inflation and making rents feel more affordable [14239157].
In Japan, the housing crisis takes a different form. A shrinking population has led to a surge in the number of empty homes. Vacancies in Japan have reached 8.99 million, an increase of 500,000 from the previous survey in 2018 and an 80% surge from 20 years ago. This means a record 13.8% of homes in Japan are now vacant, with the share exceeding 20% in some rural areas. The number of abandoned homes has also risen to 3.85 million, or 5.9% of all homes. The vacancy rates in Japan align with a prediction by Nomura Research Institute that the vacancy rate could exceed 30.4% by 2033 [2c3d890f].
In Spain, rental prices have been increasing, making it difficult for tenants to find affordable accommodation. The average rental price exceeds 30% of the net income of households in Andalusia, the Balearic Islands, the Canary Islands, and Cantabria. Many people are being pushed to the peripheries and beyond due to rising prices. The problem is particularly severe in the Balearic Islands and the Canary Islands, where the rent-to-income ratio is in excess of 38%. Low-income households are especially affected, with the lowest 20% of families allocating almost 45% of their income to rent. The rental pressure is spreading to rural areas as well, making it increasingly difficult for tenants to find affordable housing. Experts describe this situation as a second gentrification, with people being pushed from city centers to the peripheries and now beyond. The rental problem is linked to the purchasing power of households, and Spain has one of the highest rates of tenants exceeding the effort rate of 40% in Europe [67200ba0].
The US, Japan, and Spain can learn from each other's experiences to address their respective apartment rental affordability crises. While the US struggles with a lack of housing supply and rising rents in dense urban areas, Japan faces a surplus of vacant homes due to a shrinking population. Spain, on the other hand, is grappling with increasing rental prices that are pushing tenants to the peripheries and rural areas. All three countries need to explore innovative solutions to ensure that their residents have access to affordable and suitable housing.
Low-income households in the US are struggling to keep up with rising rental costs, leading to a shortage of affordable housing. The US is currently short 7.3 million rental homes for people who earn wages at or below the federal poverty level. The shortage of affordable housing has worsened over the past three decades, with a national shortage growing by 7% from 2019 to 2022. Some of the most populous states, including Nevada, Arizona, California, Florida, and Texas, are suffering from the largest shortages of affordable housing for renters at the lowest income levels. The shortage disproportionately affects Black, Latino, and Indigenous households, as well as senior citizens, people with disabilities, and the workforce. Rising rents and evictions are linked to premature deaths, with every 10 percentage point increase in rent driving a person's risk of dying higher by 8%. The threat of eviction is associated with a 19% increase in risk of death, while actual eviction is associated with a 40% increase. The post-pandemic economy has seen the cost of rent rise at nearly five times the rate it had in the years leading up to 2020, and the number of people paying a third or more of their income on housing has hit an all-time high. The shortage of housing, exacerbated by the 2008 housing market crash, has pushed rents up faster than wages have grown over the past decade. President Joe Biden aims to lower housing costs through various means, including rental assistance and vouchers for more than 100,000 households [c3d19151].
Eviction filings over the past year are up more than 15% compared to before the COVID-19 pandemic in 10 cities across the country. The problem is worse in five cities, where the eviction rate is at least 30% higher. The cities with the fastest rising eviction rates are Gainesville, Florida (46% surge), Minneapolis-Saint Paul, Minnesota (44% surge), Las Vegas, Nevada (43% leap), Houston, Texas (42% increase), and Columbus, Ohio (37% increase). The increase in evictions is attributed to the rise in rent prices, driven by pandemic lockdowns, pent-up demand, record-high housing prices, and low inventory. High rents disproportionately affect lower- and middle-income families, with roughly 52.6% of households below the national median income being renters. Single-family home rents rose 14% in 2022 [81074cdb].
Rent is the biggest economic issue facing the US, according to Michael Weinstein, president of AIDS Healthcare Foundation. A recent report from Harvard University's Joint Center for Housing Studies found that rents have been rising faster than incomes for decades, leading to an affordability crisis. The report also revealed that the number of renters spending more than half of their household income on housing and utilities reached a record high of 12.1 million in 2022. Weinstein argues that the increasing penetration of mega-corporate landlords exacerbates wealth inequality and has negative societal effects. He calls for rent control as a short-term solution to limit rent increases and ensure affordable housing for all [ec2ecddb].
The housing crisis is a policy failure that has led to declining housing affordability. High prices have stretched budgets and caused stress and anxiety for many individuals. Vancouver's housing crisis has had a significant impact on livability, with unaffordable housing creating a class of propertied owners. Owning a home is seen as a way to escape high rental costs. However, there is no single solution to the housing crisis, and multiple approaches are needed. Socialized and public housing are essential components of addressing the crisis. There is a critical mass of collective exasperation with the housing issue, highlighting the urgent need for action [e7434341].
Rising rents are linked to lower life spans. A study found that for every 1% increase in rent, there is a 0.95% increase in mortality rates. The study analyzed data from 3,000 counties in the United States. Renters in low-income areas are most at risk. The correlation between rising rents and lower life spans is stronger in counties with higher poverty rates. The study suggests that affordable housing policies and income support programs can help mitigate the negative health effects of rising rents [97318ec5].