Rising rents, leaving behind a generation of young workers in the United States

The cost of renting a home in the United States is rising, and young workers have felt the pain, as many take on additional jobs or roommates to pay for housing.

Home rents in 2021 have jumped 10% from pre-pandemic levels, according to Census Bureau estimates released last week. These numbers came as rising health care costs and rents pushed up US consumer prices unexpectedly last month.

Data from the Office’s Annual American Community Survey estimated median rent in the United States at $1,037 in 2021, up from $941 in 2019. Annual increases in median household rent over the past decade have been 2% or 3% – an exception One was a 5% increase from 2018 to 2019.

Among those most affected are recent college graduates and other new entrants to the workforce, who have little savings and cannot buy a home.

Take Maeve Kozlark, a PhD student at New York University. The 23-year-old spent his year in an apartment in the New York City borough of Queens with a door that didn’t lock. The owner’s refusal to fix the latch prompted her to create a TikTok video about it.

Maeve Kozlark, 23, has spent a year in an apartment in New York City’s Queens borough with a door that doesn’t lock.
Reuters
A row of apartment houses stands in the Ridgewood neighborhood of Queens.
Data from the annual American Community Survey of the office estimated the median rent in the United States at $1,037 in 2021, up from $941 in 2019.
Reuters

Kozlark said the lock is still broken after a year and 230,000 views, when her landlord announced a $1,000 increase over her current $2,500 rent. I left the apartment in June.

“So we started our crazy search to find something affordable and not a shoebox, which is pretty impossible,” said Kozlark, who considers herself lucky to have found a new rental place in Queens.

Similar accounts of price hikes and rent struggles abound across the country. In Austin, Texas, 22-year-old Skylar Lee has signed a one-year lease of a two-bedroom apartment, where she and her boyfriend together pay $1,950 a month in rent.

Within a month of moving in, similar apartments in the building were renting for $2,400 a month — the price you’d expect Lee to pay to renew the lease next year.

In Chicago, 23-year-old Kelvin Angelo Kobe decided to forgo rent entirely and move in with the family in Chicago because he expects to have to pay nearly $1,000 in monthly rent, which he can’t afford while looking for a job.

On the West Coast, Celine Boone, 21, initially added a roommate to her Santa Barbara apartment to make costs more affordable. But she ended up moving out when the $600 monthly rent for her share of the three-bedroom condo rose by $50 and some of her five companions left.

“It was a very frustrating process,” Boone said.

Maeve Kozlark
Similar accounts of price hikes and rent struggles like Kozlark abound across the country.
Reuters

“ Truly Unprecedented”

Adding to the tenants’ problems, rents in the professionally managed sector – usually larger properties managed by management firms – have skyrocketed.

Annual rent growth there was 11.6% at the end of 2021 and the beginning of 2022, about three times what it was in the five years prior to the pandemic, according to the Harvard Joint Center for Housing Studies. At the same time, vacancy rates have fallen to their lowest levels since 1984 as demand rose after the pandemic.

“It’s a really unprecedented market in many ways,” said Whitney Irrgood-Oberke, a senior researcher at the Harvard Housing Center.

The main factor in all of this was the COVID-19 pandemic.

With the spread of coronavirus infection in 2020, the wealthy have gone to summer homes or remote areas to avoid infection, which has led to job vacancies and huge rent reductions in many cities.

Maeve Kozlark's residence.
Koslark considers herself lucky to have found a new place to rent for $3,300 in Queens.
Reuters

Alexandra Alvarado, director of marketing for the American Apartment Owners Association, which represents smaller landlords, said landlords are now compensating for those losses while also trying to offset higher maintenance and insurance costs.

With less supply in large cities and rural areas as more people have moved to work remotely, landlords can require potential tenants to show higher incomes than was previously required, she said.

In addition to demand, millennials, most of whom are in their 30s, continue to live in apartments and unable to buy homes, said Michael Caine, associate professor of urban planning at New York University.

“They kind of hamper the new tenants who were behind,” he said.

A row of apartment houses stands in the Bushwick neighborhood of Brooklyn.
With supply declining in large cities and rural areas as more people have moved to work remotely, landlords can require potential tenants to show higher incomes than was previously required.
Reuters

Some minority groups are also likely to feel more upset. Black tenants are less likely to have home-owning fathers — a major source of wealth in the United States — who can help them financially, said Ingrid Gold Ellen, professor of urban policy and planning at New York University.

A recent survey by real estate company Zillow found that renters of color are required to pay higher security deposits and more application fees than their white counterparts.

All this made the market where simply securing any apartment can be a big deal in some areas. In New York — long known for its competitive and pricey rental market — apartment hunters have reported encountering landlords looking for tenants with an annual salary of at least 40 times a month’s rent, or with guarantors charging more than 80 times a month’s rent.

A recent college graduate, Caleb Simon, 22, has started providing services to Uber Eats along with his full-time job at a think-tank to defray housing costs. However, Simon says he only found an apartment in New York because one of his roommate’s parents was a guarantor.

“It is very challenging and special to be able to get the cheapest apartment on the market right now here,” Simon said.

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