Rising rental costs in urban areas have sparked heated debates for years. Still, with extortionate rates causing a crisis amongst low-income households, the debate has possibly never been more emotionally charged. As a result, tenants have been calling for more tangible action to prevent America's homeless crisis from worsening.
Of course, there are those on either side of each solution. With no clear path out of rising costs, the question remains, how do we solve rising rental costs and the impact on affordable housing in urban areas?
Are Rental Costs Rising in Urban Areas Around the US?
When prospective tenants submit a tenant application in any city or built-up town, they're likely aware that the bills they're about to pay are significantly higher than those in suburban or rural areas. It's no secret that built-up areas typically have the highest prices. Still, in recent years, urban areas across the united states have seen a rapid increase in rental costs, making it harder for low-income families to find viable housing.
A perfect storm between a price surge and a supply drop has meant that around half of Americans think affordable housing is a significant problem in their local community. Not only are rental prices increasing in urban areas, but the Bureau of Labor Statistics states that rental hikes were far more likely for new leases, making it even harder for low-income families to find secure and stable accommodations.
What Areas Are Experiencing The Most Increase in Rental Costs?
As inflation tightens its grip, which areas are experiencing the most significant increases in rental costs? This is difficult to answer, as variations in supply, housing quality, and amenities will all impact rental prices. However, specific locations have shown the biggest growth in rent since the Coronavirus Pandemic.
The usual suspects, like New York City, saw some of the most significant increases, with some surging over 25% in a single year. Boston has also seen a significant change, with rental prices increasing over 27%, alongside Scottsdale, Arizona. But, we can also see significant changes in areas like Fresno, California, with a 28% growth post-Covid, as well as Orlando, Florida, Knoxville, Tennessee, and Tampa.
How is This Affecting Affordable Housing?
One of the primary concerns about this snowballing crisis is the effect on low-income households and affordable housing. Those with minimum-wage income or unable to work due to healthcare concerns find that the cost of their essential utilities eats up large portions of their income, leading to little disposable income needed for necessities. Understandably, this only exacerbates the heated debate on affordable housing even further.
Does Government Intervention in Rental Costs Help Low-Income Families?
On one side of the debate, some argue that policy change via government intervention is needed to control rising rental costs on local and national levels. Some policy change proposals include more funding for low-income housing programs and expanding Section 8 Vouchers, but not everyone agrees that this is the solution.
Some would argue that this intervention on a national level would lead to a marked decrease in the supply of viable, affordable housing, and governments should focus on relaxing zoning regulations to accommodate additional construction work.
The argument around this solution tends to center around the thought that increasing construction and housing supply will decrease rental prices, allowing more low-income families to find affordable housing.
Is Rent Control the Solution to Unaffordable Urban Area Rent?
There is a significant debate around rent control in urban areas. In a nutshell, rent control policies limit how much landlords can charge tenants and have been implemented in cities across the states.
There is a hot debate on both sides of this issue. Some argue that limiting landlords' ability to charge excessive rents is practical and protects tenants from rapid increases, especially for low and middle-income households, stopping them from being priced out of their homes. It can also provide stability and save tenants from frequent moves.
However, some argue that rent control can harm the housing market by decreasing supply. The debate seems to suggest that rental controls may incentivize landlords to stop investing in maintenance and improvements if they cannot charge more, or they may be more likely to convert units into spaces exempt from rent control.
Section 8 Vouchers Could Be the Answer, But Does Everyone Agree?
Section 8 Vouchers are an example of government intervention. They are one way that the government supports low-income families, the disabled, and the elderly to afford to house. Many agree that this program can help lower rental costs in urban areas, but it's not without criticism.
Although the expansion of Section 8 may help lower increases for some families, many point out that long-waiting lists and limited availability make this a non-viable solution for most Americans.
Final Thoughts
With rising rental costs continuing to rage across the country, the debate around this topic and potential solutions will likely continue. Current solutions seem to suggest that policy change at a local and national level, and more incentives for construction and zoning relaxation are viable solutions. Still, as with most things, there will always be those in favor and those against intervention methods.
