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    "filename": "Harvard_JCHS_Americas_Rental_Housing_2024.pdf",
    "extracted_text": "--- Page 1 ---\n20\n24\nAMERICA’S\nRENTAL HOUSING \nJOINT CENTER FOR HOUSING\nSTUDIES OF HARVARD UNIVERSITY \n\n\n--- Page 2 ---\nAMERICA’S RENTAL HOUSING 2024 \nJoint Center for Housing Studies of Harvard University\nHarvard Graduate School of Design | Harvard Kennedy School\nTABLE OF CONTENTS\n1.\t Executive Summary........................................................................................................................................... 1\n2.\t Renter Households.............................................................................................................................................9\n3.\t Rental Housing Stock.......................................................................................................................................17\n4.\t Rental Markets...................................................................................................................................................26\n5.\t Rental Affordability.........................................................................................................................................34\n6.\t \u0007Rental Housing Challenges.......................................................................................................................42\n7.\t \u0007Additional Resources..................................................................................................................................... 51\nONLINE TABLES AND EXHIBITS \nwww.jchs.harvard.edu/americas-rental-housing\nPrincipal funding for this report was provided by Wells Fargo.\n©2024 by the President and Fellows of Harvard College.\nThe opinions expressed in America’s Rental Housing 2024 do not necessarily represent the \nviews of Harvard University or Wells Fargo.\n\n\n--- Page 3 ---\nEXECUTIVE \nSUMMARY\nRental markets are finally cooling as a decades-high volume of new supply has come online, outpacing demand. \nNevertheless, more renter households are cost burdened than ever before, and a record number of people \nare experiencing homelessness. Pandemic resources temporarily shored up the housing safety net, but the \nneed for rental assistance remains greater than ever. Additionally, the aging rental stock requires significant \ninvestment to address structural inadequacies, inaccessibility, and climate risks. Making these investments is \nchallenging, given the current market environment of increasing operating expenses and high interest rates. \nDespite today’s difficult conditions, strong demand from the Gen Z, millennial, and baby boom generations \nshould ensure that the rental market slowdown is short lived.\nRental Markets Are Softening\nRental markets are rapidly cooling after a period \nof significant overheating. Rent growth has almost \ncompletely stopped, following historically high rent \nincreases in both 2021 and 2022. In the third quarter \nof 2023, rent growth plummeted for professionally \nmanaged apartments to just 0.4 percent, down from \n15.3 percent in early 2022, according to RealPage \n(Figure 1). While rents slowly rose across property \nclasses, the pace of growth was under 1 percent in \nthe third quarter of 2023 for lower- and higher-quality \napartments alike.\nThis abrupt deceleration was geographically wide­\nspread, with rents even falling in some markets. In the \nthird quarter of 2023, rents for professionally managed \napartments dropped year over year in 32 percent of \nthe 150 markets tracked by RealPage, including many \nin the West. Just 1 percent of markets posted rent \ngrowth of at least 10 percent in the third quarter of \n2023, a sharp turnaround from the previous year when \nrents in half of the markets increased at that rate. While \nthe slowdown is a welcome change for renters, asking \nrents still remain well above pre-pandemic levels.\n-5\n0\n5\n10\n15\n20\nAll Apartments\nClass A\nClass B\nClass C\n2015\n2017\n2019\n2021\n2023\nNotes: Asking rents are for professionally managed apartments \nin buildings with five or more units. Class A (Class C) apartments \nare relatively higher (lower) quality.\nSource: RealPage.\nFigure 1\nApartment Rent Growth Has Stalled\nAnnual Change in Asking Rents (Percent)\n01 \nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n1\n\n\n--- Page 4 ---\nSome of the deceleration may be explained by the \nlarge number of new units that have come online and \npushed up vacancy rates. After hitting a pandemic \nlow of 5.6 percent in late 2021, the rental vacancy rate \nwas 6.6 percent in the third quarter of 2023, according \nto the Housing Vacancy Survey. The rise in vacancies \nhas been even more pronounced in the professionally \nmanaged apartment sector. In the third quarter of \n2023, 5.5 percent of these units were vacant, above \npre-pandemic averages and more than double the \nall-time low of 2.5 percent set in early 2022. Vacancy \nrates in this sector rose fastest in the South, reaching \n6.3 percent in the first quarter of 2022.\nSlowing demand has also helped rental markets stabi­\nlize after a tumultuous 18 months. Renter household \ngrowth surged in the second year of the pandemic, \nthen tumbled before returning closer to pre-pandemic \nlevels (Figure 2). In the professionally managed apart­\nment market, growth in demand peaked in the first \nquarter of 2022 with the net addition of more than \n700,000 households year over year before plunging to \na net loss in the fourth quarter. Following modest quar­\nterly increases in demand through the first half of 2023, \nan additional 91,000 new renter households formed in \nthe third quarter, nearing pre-pandemic increases.\nUnaffordability Has Hit an All-Time High\nThough rent growth has recently slowed substan­\ntially, the extended period of rising rents during the \npandemic propelled cost burdens to new heights. \nAt last measure in 2022, a record-high 22.4 million \nrenter households spent more than 30 percent of \ntheir income on rent and utilities. This is an increase \nof 2 million households over three years and entirely \noffsets the modest improvements in cost-burden rates \nrecorded between 2014 and 2019 (Figure 3). Among \ncost-burdened households, 12.1 million had housing \ncosts that consumed more than half of their income, \nan all-time high for severe burdens.\nAs a result, the share of cost-burdened renters rose to \n50 percent, up 3.2 percentage points from 2019. The \nfinancial strain has been felt across the income spec­\ntrum. Since 2019, cost-burden shares have risen the \nmost for middle-income renter households earning \n$30,000 to $44,999 annually (up 2.6 percentage points) \nor $45,000 to $74,999 annually (up 5.4 percentage \npoints). Higher-income households also saw their \nburden rate increase by 2.2 percentage points. House­\nholds earning less than $30,000 annually, a popula­\ntion already grappling with persistently high burdens, \nrecorded a 1.5 percentage point increase.\nThe dwindling supply of low-rent units is only wors­\nening cost burdens. In 2022, just 7.2 million units had \ncontract rents under $600—the maximum amount \naffordable to the 26 percent of renters with annual \nincomes under $24,000. This marks a loss of 2.1 million \nunits since 2012 when adjusting for inflation. The spike \nin asking rents during the pandemic accelerated the \ntrend, with more than half a million low-rent units lost \njust between 2019 and 2022.\nThese losses have contributed to a decades-long \nchallenge for renters: rent increases are outpacing \nincome gains. Median rents have risen nearly continu­\nously since 2001 in inflation-adjusted terms and are 21 \npercent higher as of 2022. Meanwhile, renters’ incomes \nhave risen just 2 percent during the same period.\nAnnual Net Change\n-200\n-100\n0\n100\n200\n300\n400\n500\n600\n700\n800\n2013\n2015\n2017\n2019\n2021\n2023\nNote: Annual net change is the four-quarter rolling total for \nprofessionally managed apartment buildings with five or  \nmore units. \nSource: RealPage.\nFigure 2\nApartment Demand Has Started to Rebound\nChange in Apartment Households (Thousands)\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n2\n\n\n--- Page 5 ---\n0\n10\n20\n30\n40\n50\n60\n0\n5\n10\n15\n20\n25\n30\n2001\n2002\n2003 2004 2005 2006 2007 2008 2009 2010\n2011\n2012\n2013\n2014 2015\n2016\n2017\n2018\n2019\n2020 2021\n2022\nSeverely Cost Burdened\nModerately Cost Burdened\nShare with Cost Burdens (Right Scale)\nNotes: Moderately (severely) cost-burdened households spend 30–50% (more than 50%) of income on rent and utilities. Households \nwith zero or negative income are assumed to have burdens, and households that are not required to pay rent are assumed to be \nunburdened. Estimates for 2020 are omitted because of data collection issues experienced during the pandemic. \nSource: JCHS tabulations of US Census Bureau, American Community Survey 1-Year Estimates.\nFigure 3\nThe Number of Cost-Burdened Renters Hit an All-Time High\nNumber of Renter Households (Millions)\t\nShare with Cost Burdens (Percent)\nConsequently, residual incomes—the amount of \nmoney available after paying for rent and utilities to \ncover other needs—have dropped significantly. Those \nwith lower incomes are especially squeezed. Renter \nhouseholds earning less than $30,000 annually had \nan all-time low median residual income of just $310 \nper month in 2022, down 47 percent from 2001 after \nadjusting for inflation. Further, the vast majority of \nthese renters are cost burdened. For this substan­\ntial subset, the median monthly residual income was \njust $170. According to the Economic Policy Institute, \na single-person household in the most affordable \ncounties needs about $2,000 each month to cover \nnonhousing needs.\nSuch tight budgets force financially vulnerable renters \nto make dreadful choices. Center tabulations of the \n2022 Consumer Expenditure Survey indicate that \nseverely cost-burdened renter households in the \nlowest expenditure quartile spent 39 percent less on \nfood and 42 percent less on healthcare than their \nunburdened counterparts. Others may end up living \nin overcrowded or structurally inadequate conditions, \nthreatening their health and well-being.\nA Record Number of People Are \nExperiencing Homelessness\nThough pandemic-era protections and financial \nsupports temporarily reduced eviction filings, these \nresources are largely expired or winding down, and \nhousing instability is once again on the rise. The Eviction \nLab estimated that eviction filings dropped 58 percent \nfrom the start of the pandemic through the end of \n2021, aided in part by federal, state, and local eviction \nmoratoriums and the $46.55 billion Emergency Rental \nAssistance (ERA) program. However, by mid-2023, \nmany states had nearly depleted their ERA funds, and \neviction filings had returned to pre-pandemic levels.\nStill, the pandemic raised awareness of the importance \nof stable housing, and many state and local govern­\nments are building on that momentum. About half of \nthe ERA administrators surveyed by the National Low \nIncome Housing Coalition indicated that they plan to \ncontinue operating their programs after exhausting \ntheir federal allocations. And since 2021, three states \nand 12 local governments have enacted right-to-\ncounsel programs to connect eligible renters at risk \nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n3\n\n\n--- Page 6 ---\nof eviction with legal representation. While these efforts \nare helpful, they do not function at the same scale as \nfederal policies and funding sources.\nLike evictions, homelessness has grown as housing \ncosts have increased, hitting an all-time high of 653,100 \npeople in January 2023 (Figure 4). In the first years of \nthe pandemic, renter protections, income supports, \nand housing assistance helped stave off a consid­\nerable rise in homelessness. However, many of these \nprotections ended in 2022, at a time when rents were \nrising rapidly and increasing numbers of migrants \nwere prohibited from working. As a result, the number \nof people experiencing homelessness jumped by \nnearly 71,000 in just one year. Included in this increase \nwere an additional 22,780 people staying in places \nnot intended for human habitation, including on the \nstreets, in cars, or in abandoned buildings. In 2023, the \ntotal number of people experiencing homelessness \nin unsheltered locations reached 256,610, the highest \non record.\nRising unsheltered homelessness is a longer-term \nand geographically widespread trend. The number of \nunhoused people staying outside shelters increased \nby more than 83,000 people (48 percent) between \n2015 and 2023. This population grew quickly in expen­\nsive states like California, Washington, and Oregon, \nwhere shelter resources were already strained, but \nmore affordable states also recorded increases. \nArizona, Ohio, Tennessee, and Texas were among the \nstates with the largest growth in the number of people \nunsheltered as housing costs have risen.\nThe current administration has made additional \nfederal resources available to reduce homeless­\nness and expand support systems. This includes an \nunprecedented $3.1 billion through the US Department \nof Housing and Urban Development’s (HUD’s) existing \nContinuum of Care program. Significant monies have \nlikewise been allocated via the 2021 American Rescue \nPlan (ARP) Act, including the $5 billion HOME-ARP \nprogram for services, shelters, and housing, plus \n70,000 Emergency Housing Vouchers. State and local \ngovernments have also invested more than $3.8 billion \nof their fiscal recovery funds in homelessness services \nand housing. Even so, considerably more affordable \nhousing and rent subsidies will be needed to prevent \nfurther increases in homelessness, to help rehouse \npeople at scale, and to reduce the costs of the home­\nlessness response system.\nTotal\nSheltered\nUnsheltered\n100\n200\n300\n400\n500\n600\n700\n2007\n2009\n2011\n2013\n2015\n2017\n2019\n2021\n2023\nNotes: Because of the pandemic, complete unsheltered counts \nwere unavailable in January 2021 and sheltered counts were \nartificially low, likely because of reduced shelter capacity. Data \nfor 2021 are based on 2020 and 2022 values.\nSource: US Department of Housing and Urban Development, \nAnnual Homeless Assessment Report Point-in-Time Estimates.\nFigure 4\nAfter a Swift Uptick in 2023, a Record Number of \nPeople Are Unhoused\nPeople Experiencing Homelessness (Thousands)\nHoles Are Widening in the Housing \nSafety Net\nRapidly rising rents, combined with wage losses in \nthe early stages of the pandemic, have underscored \nthe inadequacy of the existing housing safety net, \nespecially in times of crisis. Because rental assistance \nprograms are not an entitlement, they only serve one in \nfour income-eligible households. Their reach has been \nfurther constrained by insufficient budget outlays in \nthe face of growing need. Though the number of very \nlow-income renter households grew by 4.4 million \nbetween 2001 and 2021, the number of assisted house­\nholds in this income range increased by just 910,000.\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n4\n\n\n--- Page 7 ---\nConsequently, 60 percent of very low-income house­\nholds (8.5 million) who were eligible for but did not \nreceive rental assistance spent more than half of their \nincome on housing or lived in severely inadequate \nhousing conditions—sometimes both. This was a \nsubstantial increase from the 47 percent of unassisted \nhouseholds (5.0 million) with worst case housing needs \nin 2001 (Figure 5).\nThe subsidized stock and rental assistance programs \nthat do exist have vulnerabilities, too. The dwindling \npublic housing supply, home to 835,000 households \nin 2022, has a maintenance backlog estimated at \n$90 billion. To address the huge need for repairs in \nan environment of insufficient capital funding, the \nRental Assistance Demonstration program lets public \nhousing authorities convert their units to longer-term, \nstable Section 8 contracts. More than 225,000 public \nhousing units have been converted to date, enabling \nhousing providers to leverage other funding sources \nfor improvements and redevelopment. Still, many \nmore resources are required to sufficiently address \nthe scope of the needed repairs and improvements \nand preserve this critical stock.\n0\n2\n4\n6\n8\n10\n12\n14\n16\n2001\n2021\nAssisted\nModerate or No Problems\nSevere Problems\nUnassisted:\nNotes: Severe problems include spending more than 50% of income \non rent and utilities or living in severely inadequate housing. \nModerate problems include spending 30–50% of income on rent \nand utilities or living in moderately inadequate housing. \nSource: JCHS tabulations of US Department of Housing and Urban \nDevelopment, Worst Case Housing Needs Reports to Congress.\nFigure 5\nThe Rental Assistance Shortage Continues \nto Worsen\nVery Low-Income Households (Millions)\nThe subsidized supply also faces expiring affordability \nperiods and maturation. The Low-Income Housing Tax \nCredit (LIHTC) has supported more than 3.6 million \nunits since its creation in 1986. These units have a \nminimum 30-year affordability requirement (with \nlonger timelines in some states), after which they can \nflip to market-rate rents. Recent estimates suggest \nthat affordability periods for more than 325,000 units \nare set to expire between 2024 and 2029. Another 7,000 \nunits are lost prematurely each year when owners \nuse the tax code’s qualified contract option to opt out \nafter an initial 15-year period. Likewise, the entire stock \nof Section 515 units managed by the US Department \nof Agriculture (USDA), home to 378,000 renter house­\nholds in rural areas, is facing mortgage maturities that \nthreaten continued affordability.\nHousing Choice Vouchers are another crucial housing \nsubsidy facing challenges. Vouchers assisted 2.3 \nmillion households in 2022, covering the difference \nbetween 30 percent of a household’s income and their \narea’s fair market rent. The subsidy relies on participa­\ntion by private-market landlords, who are not required \nto accept the vouchers in most places. Further, the \nunit inspection and approval processes add time and \ncomplexity that may deter some landlords from partic­\nipating, especially in hot markets where the incentive \nto participate can be lower.\nVoucher holders also struggle with the program. \nThey may not be able to find a landlord who accepts \nvouchers or a suitable apartment that meets the \nprogram’s guidelines. About 40 percent of people \nwho receive a voucher are unable to use the subsidy \nin the short amount of time allotted by the program \nto sign a lease.\nWhile there have been proposals to expand the \nnational housing safety net and preserve affordable \nunits, shortfalls in federal rental assistance programs \nand worsening cost burdens have prompted state \nand local governments to act to the extent that \nthey can. States and localities are leveraging other \nfederal resources, such as state and local fiscal \nrecovery funds, to support affordable housing.\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n5\n\n\n--- Page 8 ---\nA number of states, counties, and cities issued a record \n$17.2 billion of multifamily bonds in 2020 to supplement \nLIHTC allocations. Nationwide, states and cities also \ngenerate about $3 billion annually through housing \ntrust funds to meet local housing needs. All of these \nefforts are crucial but fall short of the growing need.\nAging Rental Stock Will Require \nReinvestment\nThe rental stock is older than it has ever been. The \nmedian age was 44 years in 2021, up from 34 years \ntwo decades ago. Although building construction \nstandards and repairs to existing units have helped \nto minimize the problem of structural inadequacy, a \nlarge number of rental units still fall short of baseline \nhabitability and safety. Nearly 4 million renter house­\nholds live in physically inadequate units with problems \nsuch as structural deficiencies, a lack of upkeep, or \ninconsistent provision of basic features like electricity, \nhot and cold running water, or heat. Even among units \nthat meet the criteria for physical adequacy, many \nstill have significant unmet repair needs. The Federal \nReserve Bank of Philadelphia estimated in 2023 that it \nwould cost $51.5 billion to address the physical defi­\nciencies of the occupied rental stock.\nMuch of the rental stock does not meet householders’ \naccessibility needs. The rapidly growing population \nof older adults will increase demand for accessibility \nfeatures, given that the occurrence of disabilities rises \nwith age. According to a 2023 survey conducted by \nFreddie Mac, nearly half of renters with disabilities say \ntheir homes are minimally or not at all accessible. \nRespondents most often reported needing bathroom \nmobility aids, home security systems, no-step entries, \nand accessible electrical outlets.\nThe rental stock also needs significant energy effi­\nciency and electrification modifications to reduce \ngreenhouse gas emissions and the high energy costs \nsqueezing lower-income renters. Rental homes—\nespecially those in small multifamily buildings—use \nmore energy per square foot than owner-occupied \nhomes, according to the Residential Energy Consump­\ntion Survey. Older homes also use more energy than \nnewer homes and have significant efficiency and \nelectrification needs.\nA one-time infusion of $3.5 billion for the Weatheriza­\ntion Assistance Program through the 2021 Infrastruc­\nture Investment and Jobs Act is helping some renters \nand rental property owners with home retrofits. Simi­\nlarly, the 2022 Inflation Reduction Act provided $8.8 \nbillion in efficiency and electrification improvement \nrebates for market-rate housing, including rental units, \nand $1 billion for efficiency upgrades to HUD-subsidized \nproperties. However, more incentives are needed to \nmeet the challenges of retrofitting the existing rental \nstock and ensure that new rental units are constructed \nwith high energy performance in mind.\nAnother growing threat to the quality of the nation’s \nstock of rental housing comes from the increasing \nfrequency and severity of weather- and climate-\nrelated hazards like wildfires, flooding, earthquakes, \nand hurricanes. More than 18 million occupied rental \nunits (41 percent) are located in areas with substantial \nexpected losses from such events. Simultaneously, a \ngrowing number of insurers are declining coverage \nin high-risk housing markets, making it increasingly \ndifficult and expensive for property owners and renters \nto obtain and afford the insurance needed to cover \npotential losses. To protect households and commu­\nnities, states and localities will need to push for hazard \nmitigation and climate adaptation measures for indi­\nvidual properties and across regions.\nHigh Interest Rates Have Depressed \nMarket Activity\nWith interest rates rising into 2023, the cost of debt to \nacquire and build multifamily properties has risen. At \nthe same time, high treasury yields have increased \nthe cost of equity, as apartments must provide greater \nreturns to investors to compete with Treasury notes.\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n6\n\n\n--- Page 9 ---\nAgainst this backdrop, borrowing and transac­\ntion activity has declined. More than half the banks \nsurveyed by the Federal Reserve reported that demand \nfor multifamily loans has decreased. Further, nearly \ntwo-thirds of multifamily lenders tightened their \nunderwriting criteria in response to uncertain prop­\nerty performance and interest rate hikes. Multifamily \nmortgage borrowing was down 48 percent year over \nyear in the second quarter of 2023.\nAs the cost of capital has risen, property prices have \ndropped. The beginning of 2023 marked the first time \nthat apartment prices fell year over year in more than \na decade. By the third quarter, prices were down 13 \npercent, a remarkable turnaround from the peak 23 \npercent growth rate posted at the beginning of 2022. \nFalling property prices reflect rising capitalization \nrates—an indicator of returns used to compare invest­\nments. According to Moody’s Analytics, cap rates fell \nthrough 2022 before rising by 0.9 percentage points \nover the first three quarters of 2023 to 5.8 percent. In the \ncurrent environment, higher-risk multifamily invest­\nment can be less attractive than lower-risk Treasuries.\nFor those who already own rental properties, net \noperating incomes are rising at a slower pace as rent \ngrowth moderates and expenses increase. According \nto Yardi Matrix, the cost of operating multifamily prop­\nerties grew 9 percent year over year in June 2023. In \nresponse, net operating income growth slowed to 3 \npercent in the third quarter of 2023, from the recent \nhigh of 25 percent posted in 2021.\nWhile slowing returns could spark delinquencies, most \nproperty owners should be protected by the signifi­\ncant equity accrued before the pandemic. Moreover, \nmost loans were underwritten with enough cushion to \ncover debt service. Plus, longer-term loans constitute \nthe largest share of all multifamily debt and have \nfewer near-term maturities that will not require refi­\nnancing in the current high interest rate environment. \nTo date, delinquencies have only inched up from their \nultra-low levels.\nNew Multifamily Construction \nHas Slowed\nAfter a major boom, multifamily construction has \nstarted to cool. As late as the spring, starts remained \nelevated even as interest rates rose, with a season­\nally adjusted annual rate of 571,000 units posted in \nMay 2023 (Figure 6). But with markets slackening and \n0\n100\n200\n300\n400\n500\n600\n700\nMonthly Starts\nAverage Starts (3-Month Trailing)\n2000\n2002\n2004\n2006\n2008\n2010\n2012\n2014\n2016\n2018\n2020\n2022\nNote: Data are for buildings with at least two units and are through October 2023.\nSource: JCHS tabulations of US Census Bureau, New Residential Construction data.\nFigure 6\nNew Multifamily Construction Has Quickly Declined\nAnnualized Multifamily Units (Thousands, Seasonally Adjusted)\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n7\n\n\n--- Page 10 ---\nhigh financing costs making it increasingly difficult \nto underwrite new deals, starts have fallen sharply \nin recent months. In October 2023, starts receded to \n402,000 units, a 30 percent decrease year over year.\nNevertheless, units that were already under way \ncontinue to come online in large numbers. A total \nof 436,000 multifamily units were completed in the \nthird quarter of 2023 on a seasonally adjusted annu­\nalized basis, the highest reading since 1988 and up \nabout a third from pre-pandemic levels. Likewise, the \nnumber of multifamily units currently under construc­\ntion reached the highest level on record in July 2023, \nmaintaining that fast pace at a seasonally adjusted \nannual rate of 1.0 million units in October.\nWhile the pipeline of units under construction should \nhelp provide new supply in the near term, declining \nstarts could worsen the existing supply shortage. Addi­\ntionally, local regulations and zoning laws constrain \nmultifamily construction in many neighborhoods. \nNationally, an estimated 75 percent of the land in \nmajor cities is zoned exclusively for single-family \nhomes. Several states have preempted local zoning \nlaws to allow a range of housing options. In 2023, \nMontana, Vermont, and Washington passed legisla­\ntion that allows modest-sized multifamily buildings \non lots previously zoned only for single-family homes, \nfollowing the lead of California, Maine, and Oregon. \nZoning reforms do not guarantee the construc­\ntion of new multifamily housing, but they remove a \nsignificant barrier.\nThe Outlook\nOver the coming year, the softening of the rental \nmarket will likely continue as the pipeline of units under \nconstruction boosts supply beyond already high levels \nand continues to slow rent growth. This will be good \nnews for renters, providing relief for households with \nhigher and middle incomes. But respite will likely be \nshort-lived in the face of strong demand from the \nlarge Gen Z, millennial, and baby boom generations.\nAffordability remains a critical concern. Lower-\nincome renters face the worst affordability conditions \non record. Rental subsidies have not kept pace with the \ngrowing need, leaving those without assistance to fend \nfor themselves in one of the costliest housing markets \nin history. And homelessness is at an all-time high. \nIncreasing the supply of market-rate units will help \nto address the affordability crisis but cannot wholly \nresolve it. Rather, significantly expanding assistance—\nespecially the programs that help the lowest-income \nrenters—will also be a crucial part of the solution.\nIn the short term, rising operating costs and high \ninterest rates will present a formidable challenge for \nproperty owners. The slowing growth in operating \nincomes will make it more difficult for property owners \nto invest in repair and maintenance, accessibility \nfeatures, and climate change mitigants and adap­\ntations. Yet, the massive pre-pandemic accumulation \nof equity, coupled with the pandemic’s unprecedented \nrent increases, should prevent widespread distress \namong property owners.\nDuring the pandemic, the increased resources for \nrenters, housing providers, and state and local govern­\nments demonstrated that financial assistance and \nsupports keep tenants stably housed and landlords \nsolvent. But as these resources have expired or been \nspent down, the housing safety net is once again over­\nwhelmed and underfunded, as has been the case for \nmany decades. While states and localities have acted \nto fill some of the gaps, a larger commitment from the \nfederal government is required to expand housing \nsupports and preserve and improve the existing \naffordable stock. Only then will the nation finally make \na meaningful dent in the housing affordability crisis \nmaking life so difficult for millions of people.\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n8\n\n\n--- Page 11 ---\nRENTER \nHOUSEHOLDS\nDemand for rental housing is stabilizing after the erratic highs and lows of the pandemic. The number of smaller \nrenter households with lower incomes has grown in recent years and remains an important source of rental \ndemand. Nevertheless, longer-term demand has come from the growing number of renter households with \nhigher incomes, and has reshaped rental markets over the last decade. The large Gen Z, millennial, and baby \nboom generations have also supported rising numbers of renter households. While overall renter mobility rates \nare falling, migration is helping to sustain demand in some states.\nRental Demand Is Returning \nFollowing the pandemic rollercoaster, demand for \nrental housing is finally stabilizing. After an initial slow­\ndown during the first year of the pandemic, rental \ndemand surged in 2021. A flood of new households \nfueled a quick rise in rents and historically low vacancy \nrates. In recent quarters, renter household growth has \nreturned to the more typical pace witnessed in the \nyears preceding the pandemic, buoyed in part by the \nhigh cost of homeownership, an influx of new supply \nhelping to moderate rents, and a strong job market \n(Figure 7).\n25\n28\n3 1\n34\n37\n33\n34\n35\n36\n37\n38\n39\n40\n41\n42\n43\n44\n45\n2001 2002 2003 2004 2005 2006 2007 2008 2009 2010\n2011\n2012\n2013\n2014\n2015\n2016\n2017\n2018\n2019 2020\n2021\n2022 2023\nRenter Households\nRentership Rate (Right Scale)\nNotes: Values for 2023 are year-to-date averages for the first three quarters. Values for 2020 are omitted because data collection was \ndisrupted during the pandemic.\nSource: JCHS tabulations of US Census Bureau, Housing Vacancy Surveys.\nFigure 7\nThe Number of Renter Households Is Trending Upward Despite Declining Rentership Rates\nRenter Households (Millions)\t\nRentership Rate (Percent)\nThe professionally managed apartment market—a \nsector that typically houses renters with higher \nincomes and constitutes more than a quarter of US \nrental units—has been particularly prone to these \ndramatic fluctuations in household growth. After \nhitting a record-breaking 706,000 year-over-year net \n02\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n9\n\n\n--- Page 12 ---\nincrease at the beginning of 2022, growth in renter \nhouseholds plummeted quickly to an annual net loss \nof 192,000 by the first quarter of 2023, according to \ndata from RealPage. However, following three quar­\nters of decline, the quarter-over-quarter change in \nthe number of occupied apartments turned slightly \npositive at the start of 2023, followed by a modest \nsecond-quarter reading. Rental demand accelerated \nin the third quarter with 91,000 new renter households, \nputting household growth nearly on par with readings \nbefore the pandemic.\nThe overall rental market also saw swift increases in \nhousehold formations in 2021 followed by a return to \npre-pandemic levels of growth in 2023. According to \nCenter tabulations of the Housing Vacancy Survey, \nthe number of renter households reached 44.3 million \nin the third quarter of 2023—34.1 percent of US house­\nholds. Of the 927,000 renter households that entered \nthe market since the start of the pandemic, about \n317,000 did so within the last year. This growth signals \na return to the pace posted before the pandemic. In \n2019, 299,000 renter households entered the market.\nRenter Household Growth Is Shifting \nMuch of the short-term growth in renters has come \nfrom smaller households and those with lower and \nmore moderate incomes. In the years leading up to the \npandemic, rental demand increased among house­\nholds earning at least $75,000 annually. Between 2016 \nand 2019, the rental market added 1.3 million higher-in­\ncome households while losing 1.0 million households \nwith annual incomes under $75,000, according to data \nfrom the American Community Survey (Figure 8). This \ntrend reversed during the pandemic. Between 2019 \nand 2022, most renter growth came from the 1.1 million \nadditional households with incomes under $75,000. \nOver this same period, the number of renter house­\nholds with higher incomes rose by just 16,000.\nThis recent slowdown in renter household growth \namong those with incomes of $75,000 or more was \nat least partially attributable to increasing rates of \nhomebuying by renters with even higher incomes who \ntook advantage of the low interest rates available in \nthe early part of the pandemic. The modest loss of \n1\n2\n3 or More\nNumber of People in Household\n-1.0\n-0.5\n0.0\n0.5\n1.0\n1.5\nUnder $30,000\n$30,000-$74,999\n$75,000 and Over\nHousehold Income\n2016-2019\n2019-2022\nNote: Household incomes are adjusted for inflation using the CPI-U for All Items.\nSource: JCHS tabulations of US Census Bureau, American Community Survey 1-Year Estimates.\nFigure 8\nLess Affluent, Smaller Households Boosted Pandemic-Era Renter Growth\nChange in Renter Households (Millions)\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n10\n\n\n--- Page 13 ---\nrenter households earning at least $150,000 was more \nthan offset by the uptick in homeowners in this income \nbracket. Additionally, some of the decrease was likely \namong renter households with higher incomes that \ncapitalized on rent deals in the early months of the \npandemic to split into smaller households with lower \nincomes. The largest increases in renter households \nbetween 2019 and 2022 came from single- and \ntwo-person households with incomes below $75,000.\nIn fact, single-person renter households grew most \nacross all income brackets during the pandemic, \nincreasing by 1.2 million between 2019 and 2022, \neclipsing the 722,000 households of that type added \nbetween 2016 and 2019. Rental demand also bene­\nfited from roommate (416,000) and extended family \n(223,000) arrangements, with most of this growth \ncoming from two-person households. Further contrib­\nuting to the growth in smaller renter households was \na decrease in the number of married couples with \nchildren and single parents, possibly explained by \ntransitions to homeownership or by the splitting of \nthese households into new ones.\nA New Generation Is Driving Demand \nRenting plays an important role in housing people \nthroughout the life course. For younger people, renting \nprovides an opportunity to live independently while \nentering adulthood. Delayed marriage and parent­\nhood have also increased the attractiveness and the \nnecessity of renting further into adulthood. For people \nat older ages, rental homes can support indepen­\ndent living through better accessibility and reduced \nmaintenance. At all ages, renting is a flexible option \nthat makes it easier for people to adjust their housing \naccording to their personal circumstances.\nOver the past decade, the bulk of the growth in renter \nhouseholds has come from younger generations. \nThe millennial generation, those born between 1980 \nand 1994, drove much of the renter growth until 2016. \nThis generation is not only the largest, but also more \nlikely to rent than prior ones at the same ages. Having \ncome of age during the Great Recession with fewer \njob prospects, lower wages, high student loan debt, \nand tightened mortgage lending, many have delayed \nhomeownership. As a result, the number of millenni­\nal-headed renter households grew by an enormous \n6.2 million between 2009 and 2019 to a peak of 16.2 \nmillion (Figure 9).\n0\n2\n4\n6\n8\n10\n12\n14\n16\n18\n2007\n2008\n2009\n2010\n2011\n2012\n2013\n2014\n2015\n2016\n2017\n2018\n2019\n2020\n2021\n2022\nGen Z\n(Born 1995–2009)\nMillennial\n(Born 1980-1994)\nGen X\n(Born 1965-1979)\nBaby Boom \n(Born 1946-1964)\nPre-Boom \n(Born 1945 or Earlier)\nNote: Data for 2020 are based on 2019 and 2021 values because of pandemic data disruptions.  \nSource: JCHS tabulations of US Census Bureau, American Community Survey 1-Year Estimates.\nFigure 9\nNew Rental Demand Has Shifted from Millennials to Gen Z\nRenter Households (Millions)\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n11\n\n\n--- Page 14 ---\nWhile millennials will remain a large source of rental \ndemand in coming years, they are no longer fueling the \ngrowth in renter households. Rather, they are aging into \nprime homeownership years, a transition that markets \nare already witnessing. The number of renter house­\nholds headed by a millennial fell by 797,000 between \n2019 and 2022 as their homeownership rate increased \nby 9 percentage points during the same period.\nInstead, members of the slightly smaller but still large \nGen Z, individuals born between 1995 and 2009, are \ndriving rental demand. Already, these individuals \nheaded 7.9 million renter households in 2022. Going \nforward, overall growth in renter households will \ndepend upon whether the rise in the number of Gen \nZ renters will be sufficient to overcome the eventual \ndecline in older renters. This was true for millennials \nduring the 2000s and 2010s. However, Gen Z may follow \na different trajectory, given that this generation already \nhas higher homeownership rates than millennials did \nat the same age.\nBaby boomers also continue to help sustain longer-\nterm rental demand. Even though the number of renter \nhouseholds headed by a baby boomer is decreasing, \nthe generation is so much bigger than any before it \nthat the number of older renters is still growing. In the \nlast five years alone, renter households headed by \nsomeone age 65 and over increased by more than \n1 million. With the oldest baby boomers turning 80 in \n2026—an age when more people turn to renting—a \nwider range of affordable rental options for older \nadults will be required to accommodate their changing \nneeds. Renting will be an especially attractive option \nfor older adults who want to age in their community, \nreduce their maintenance responsibilities, and access \nthe shared spaces for social interaction and accessi­\nbility features more common in multifamily buildings.\nHigher-Income Households Are \nExerting More Influence\nWhile households with lower incomes led growth \nduring the pandemic, higher-income households have \nincreasingly driven rental demand over the longer \nterm. The number of renter households with incomes \nof $75,000 or more has risen 43 percent since 2010, to \n13.5 million as of 2022 (Figure 10). Likewise, the share of \nrenters earning at least $75,000 annually has risen by \nmore than 6 percentage points to 30 percent during \nthis same period. Much of the growth has come from \n0\nUnder $15,000\n$15,000-$29,999\n$30,000-$44,999\n$45,000-$74,999\nHousehold Income\n2010\n2016\n2022\n2\n4\n6\n8\n10\n12\n14\n$75,000 and Over\nNote: Household incomes are adjusted for inflation using the CPI-U for All Items.  \nSource: JCHS tabulations of US Census Bureau, American Community Survey 1-Year Estimates.\nFigure 10\nHouseholds with Higher Incomes Have Fueled Long-Term Demand\nRenter Households (Millions)\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n12\n\n\n--- Page 15 ---\nrenters who are married and have college educations, \na demographic that fits previous generations’ profile \nof first-time homebuyers.\nHigher-income renters have characteristics that set \nthem apart from the typical renter household. For \nstarters, they are younger. Fully 42 percent of them are \naged 35–54, as compared to 34 percent of all renters. \nThey are also more likely to be married, with 40 percent \nwedded versus 24 percent of all renter households. \nGiven these demographic trends, it is perhaps unsur­\nprising that higher-income renters are slightly more \nlikely to have children and larger households than the \ngeneral population of renters. And because income \ncorrelates with education, these renters have higher \nlevels of education, with more than half possessing at \nleast a bachelor’s degree, including 20 percent with a \ngraduate or professional degree.\nFinally, renters with higher incomes are dispropor­\ntionately white (53 percent) or Asian (9 percent) as \ncompared to all renters (50 percent and 5 percent, \nrespectively). Meanwhile, Black householders are \nunderrepresented in this market segment, consti­\ntuting just 13 percent of these renters (compared to 19 \npercent of all renters). Households headed by Hispanic \n(20 percent), multiracial (4 percent), and Native Amer­\nican (0.4 percent) renters are evenly represented.\nRenter households with incomes of at least $75,000 \nare most common in metros with high rentership rates, \nmedian household incomes, and housing costs. In \nthese areas, renting is more the norm, and homeown­\nership options may be prohibitively expensive, even for \nhouseholds with higher incomes. For example, in both \nSan Jose and San Francisco, households with higher \nincomes make up more than half of all renters. In these \ntwo metros, the rentership rate among higher-income \nhouseholds is more than 35 percent, as compared to \n22 percent nationally.\nConversely, households with higher incomes make up \nsmaller shares of renters in markets where housing \ncosts are more affordable and incomes tend to be \nlower. Most of these metros are located in the South or \nMidwest, including Cleveland, Columbia, El Paso, and \nJackson, where rentership rates among households \nwith annual incomes at or above $75,000 are under \n18 percent.\nThe elevated rentership rate among higher-income \nhouseholds in expensive markets suggests that \nobstacles to homeownership are formidable, even \nfor households with above-average earnings. Industry \nsurveys have found that many renters hope to own a \nhome someday but consider their goal out of reach. A \nquarter of millennial households surveyed by Apart­\nment List, for example, reported that they will always \nrent, citing affordability as the biggest barrier to home­\nownership. Rising rents have challenged renters’ ability \nto save for a downpayment. At the same time, the low \nvolume of for-sale inventory and escalating home \nprices make it difficult for even higher-income renters \nto become homeowners.\nStill, attractive rental options—such as single-family \nhomes and apartments with amenities—in desirable \nlocations have encouraged some households with \nhigher incomes to continue to rent. In 2022, about 8.5 \nmillion renter households made at least $100,000 per \nyear, incomes that put the nation’s median-priced \nhome within reach. Of these households, 39 percent \nlived in single-family rental homes. An additional 19 \npercent lived in apartments in large multifamily build­\nings with at least 50 units, properties that tend to be in \nurban areas and rich with amenities. A third of house­\nholds with incomes of $100,000 or more lived in new \nrental units built after 2000.\nThe existing range of rental options may enable \nthese more affluent households to live in the type of \nhousing they want, in a location that suits them, and \nin a high-quality home while still enjoying the flexi­\nbility and convenience of renting. These advantages \nmay make renting a more attractive option than \nhomebuying, even for households that could afford \nto become homeowners.\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n13\n\n\n--- Page 16 ---\nMany Renters Are Economically \nVulnerable\nWhereas renting may be a choice for some house­\nholds with higher incomes, it may be the only option \nfor those who earn less. The median renter house­\nhold income in 2022 was about $47,000, and a signif­\nicant share of renters have much lower incomes. \nThirty-two percent of renters (14.6 million) had house­\nhold incomes below $30,000 in 2022. According to the \nmost recent Survey of Consumer Finances in 2022, \nthese renters had a median cash savings of just \n$300 and total net wealth—including retirement \naccounts and other investment funds—of just $3,200. \nThese financially precarious households face a \ngreater risk of housing instability and cost burdens \nbut remain an important source of rental demand.\nThe characteristics of lower-income renter households \ncan add to their economic vulnerability. As compared \nto both the full renter population and the higher-\nincome households that have driven demand over \nthe last decade, households with lower incomes \nare more likely to be headed by an older adult and \nconsist of a single person (Figure 11). Over a quarter \n(28 percent) of renter households with lower incomes \nare headed by someone at least 65 years old, a full \n11 percentage points more than that of all renter \nhouseholds. An additional 16 percent are headed \nby someone between the ages of 55 and 64. The \nolder age distribution contributes to the high share \nof lower-income households that consist of a single \nperson (59 percent) and the low share that have \nchildren (21 percent).\nFurther, lower-income households may be espe­\ncially financially fragile because of their lower levels \nof educational attainment and higher prevalence \nof disability, both of which can limit job prospects. \nMore than half of lower-income renter households (53 \npercent) are headed by someone without a college \ndegree, compared to 38 percent of all renters, and just \n16 percent have at least a bachelor’s degree. Disabili­\nties can make it difficult for households to secure and \nretain employment, depressing household earnings.\nA full 34 percent of all lower-income renter house­\nholds are headed by a person with a disability, the \nmajority of whom are under age 65.\nLower-Income\nRenters\nHigher-Income\nRenters\nAll Renters\nSingle Person\nMarried\nOther Family\nRoommates\nHousehold Type\n0\n10\n20\n30\n40\n50\n60\n70\n80\n90\n100\nLower-Income\nRenters\nHigher-Income\nRenters\nAll Renters\nAge\nUnder 35\n35-44\n45-54\n55-64\n65 and Over\nNotes: Lower-income households earn less than $30,000. Higher-income households earn at least $75,000. Age is for the household \nhead. Other family households include single parents.\nSource: JCHS tabulations of US Census Bureau, 2022 American Community Survey 1-Year Estimates.\nFigure 11\nLower-Income Renters Are More Likely to Be Older and Live Alone\nShare of Households (Percent)\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n14\n\n\n--- Page 17 ---\nAnd because racial discrimination in education and \nlabor markets restricts opportunities and wages, \nhouseholds headed by a Black person are more likely \nto have lower incomes than households of other races \nand ethnicities. Consequently, they constitute an \noutsized share of lower-income renter households. \nA full 42 percent of households headed by a Black \nperson earn less than $30,000 annually, compared \nto 30 percent of those headed by a white person with \nsimilarly low incomes. As a result, households headed \nby a Black person make up a quarter of lower-in­\ncome households despite being just under a fifth of \nall renter households. Likewise, households headed \nby a Native American person face economic chal­\nlenges and discrimination that make them more \nlikely to face financial precarity. Indeed, 42 percent \nof households headed by a Native American person \nare lower income.\nHouseholds with lower incomes constitute a larger \nshare of renters in less expensive markets where \nhomeownership is more attainable and rents are \nmore affordable. Among the 100 most populous \nmetros, lower-income households make up more \nthan 40 percent of renters in more affordable Southern \ncities as well as in deindustrialized Rust Belt cities like \nBuffalo, Toledo, and Cleveland. Additionally, renters \nwith lower incomes disproportionately live in counties \nin smaller metropolitan areas and rural communities, \nand are slightly more likely to live in counties with \npersistent poverty.\nRenting Benefits Mobile Populations\nOne benefit of renting compared to owning a home \nis the relative ease of moving. The lower transaction \ncosts involved in relocating into or out of a rental unit \nmake renting preferable for younger households as \nwell as those who are relatively mobile or looking for \nshorter-term living arrangements. Reflecting these \nbenefits, the renter mobility rate—the yearly share \nof renters who change residences—is much higher \nthan that of homeowners. About 16 percent of renters \nreport having moved in the past year, compared to just \n4 percent of homeowners.\nNearly a third \nof renters had \nhousehold \nincomes under \n$30,000 in 2022.\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n15\n\n\n--- Page 18 ---\nEven so, mobility rates among renters have continued \ntrending downward over the last decade. According \nto the Current Population Survey, 25 percent of renters \nmoved during the previous year in 2013, but the rate \ngradually dropped to 20 percent by 2019. It then fell \neven further to 16 percent in 2021 as the pandemic \nprompted record-high lease renewals. The mobility \nrate has held steady at 16 percent through 2023, \nreflecting tightening housing markets and continued \nhigh apartment retention rates.\nIn the event renters did choose to relocate, they often \nopted to remain local. In 2023, 61 percent of renter \nmoves were within the same county, and an additional \n17 percent stayed in state. The remaining moves were \neither from another state (15 percent) or from abroad \n(7 percent). While overall mobility rates have declined, \ninterstate movers have nonetheless continued to be \nan important source of rental demand. In 2022 alone, \nTexas, Florida, North Carolina, and Arizona each gained \nmore than 18,000 households from domestic migration, \nwhile New York, California, and New Jersey each lost \nmore than 20,000 households.\nTypically, renters move in pursuit of better housing, \nto form a new household, or to be closer to a new job \nor their family. Among those who moved in 2023, the \ntwo most common reasons were for a new job or to \nrelocate to a new or better home (14 percent each). \nThe share who moved for a new or better home in \n2023 was notably lower than in 2019, perhaps because \npeople made these moves earlier in the pandemic \nin response to the increased need for more space. \nAnother 11 percent of moves were for more afford­\nable housing, and 10 percent were due to new \nhousehold formation.\nThe Outlook\nAfter the pandemic-era highs and lows, rental demand \nappears to be stabilizing. The resumption of renter \nhousehold growth in 2023 after a dip earlier in the \npandemic is a positive sign for rental property owners. \nWhether this level of growth will continue remains to \nbe seen. Nevertheless, given the long-term increase \nin renter households, there is likely to be a relatively \nhigh number of renters for years to come.\nLikewise, the underlying age distribution of the US \npopulation also points to sustained rental demand \ngoing forward. A meaningful portion of the large millen­\nnial population is renting later in life than members \nof previous generations. Further, even as millennials \nturn to homeownership in greater numbers, Gen Z \nhas already taken over as the primary driver of rental \ndemand growth. At the same time, the aging of the \nbaby boomers into their 70s and 80s means that those \nwho wish to remain in their communities without the \nresponsibilities of homeownership may transition to \nrenting. Providing affordable, accessible rental options \nfor these older adults will help them to age with dignity \nand security.\nRenting is a preferable housing option for many indi­\nviduals. Units with amenities in desirable locations \nand single-family rentals are increasingly attractive \nto households with higher incomes. For some, these \noptions may provide a stepping stone to homeown­\nership. However, for others, renting is the only option. \nHouseholds that lack the financial resources to \nbecome homeowners continue to rely on the rental \nmarket as their sole source of housing. These house­\nholds are an equally important component of demand. \nEnsuring that they have adequate, affordable housing \nis an ongoing policy challenge.\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n16\n\n\n--- Page 19 ---\nRENTAL HOUSING \nSTOCK \nStrong multifamily housing production continues to shift rental stock composition toward larger buildings. At \nthe same time, the volume of low-rent units is falling, leaving financially vulnerable renters with fewer affordable \noptions. Restrictions on development further limit the availability of rentals in many suburban communities and \nexclude renters from some neighborhoods. Nationwide, the aging rental stock needs significant investment to \nimprove housing quality, accessibility, and resilience to climate-related hazards.\nLarge Buildings Are a Growing Share \nof the Rental Stock\nBetween 2010 and 2022, the total rental supply \nincreased by 4.3 million units to 48.1 million units. This \ngrowth was driven primarily by the construction of \nlarge multifamily buildings (Figure 12). During this \nperiod, the number of apartments in multifamily \nbuildings with 20 or more units grew by 3.3 million, \nto 12.3 million units. The supply in midsize buildings \nwith 5–19 units also increased, though by a modest \n292,000 apartments, to 10.6 million units. Rentals in \nsmall multifamily buildings with 2–4 units, a property \ntype that tends to be more affordable, increased by \njust 103,000, to 8.3 million units.\nCompared to 2010, the supply of single-family homes \nfor rent has grown by 649,000 homes, to 14.9 million in \n2022, although this is down from the peak of 16.1 million \nrecorded in 2016. Many of these homes converted from \nowner-occupancy to rental during the first half of this \nperiod, especially in the aftermath of the foreclosure \ncrisis. However, in the second half of this period, the \ntrend reversed. Beginning in 2016, the supply of single-\nfamily rentals declined every year as homes converted \nto owner-occupancy or were otherwise lost to building \ndemolitions and condemnations. Nevertheless, single-\nfamily homes represented nearly a third of the total \nstock in 2022.\n7\n8\n9\n10\n1 1\n12\n13\n14\n15\n16\n17\n2010\n2012\n2014\n2016\n2018\n2020\n2022\nSingle Family\n2-4 Units\n5-19 Units\n20 or More Units\nNotes: Rental units may be occupied, vacant for rent, or rented \nbut unoccupied. Single-family homes include attached and \ndetached units. Data for 2020 are based on 2019 and 2021 values \nbecause of pandemic data disruptions.  \nSource: JCHS tabulations of US Census Bureau, American \nCommunity Survey 1-Year Estimates.\nFigure 12\nLarger Buildings Account for Most of the Rental \nStock Growth\nNumber of Rental Units (Millions)\n03 \nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n17\n\n\n--- Page 20 ---\nThe disproportionate increase in units in larger multi­\nfamily buildings relative to other rental types has \nchanged the composition of the rental stock. Since \n2010, the share of rentals in large multifamily build­\nings has increased by 5 percentage points and are 25 \npercent of the rental stock as of 2022. Meanwhile, the \nsingle-family rental share dropped by 2 percentage \npoints. Likewise, the shares of rental units in midsize \nand small multifamily buildings each dropped by 1 \npercentage point. Midsize buildings with 5–19 units \naccounted for 22 percent of the rental stock and \nsmaller buildings with 2–4 units constituted 17 percent. \nThe share of manufactured housing, which totaled just \n2.0 million units in 2022, also declined by 1 percentage \npoint over the previous 12 years, to just 4 percent of \nrental units.\nThe shift in rental housing away from smaller prop­\nerties and toward apartments in larger buildings is \ndue mainly to the composition of new construction. \nBetween 2010 and 2022, annual completions of multi­\nfamily rentals grew from 125,000 to 342,000 units, with \n3.5 million units added in this period, according to \nthe Census Bureau Survey of Construction. A full 2.9 \nmillion were apartments in buildings with at least \n20 units, pushing up their share of multifamily rental \ncompletions from 79 percent to 90 percent between \n2010 and 2022.\nWhile annual completions of single-family rentals have \naccelerated rapidly in response to growing demand, \nsingle-family homes built as rentals remained a small \nshare of new construction. Completions of single-\nfamily rentals rose from 26,000 to 67,000 units annually \nbetween 2010 and 2022. In total, 518,000 new single-\nfamily homes built as rentals were completed in this \nperiod, representing 13 percent of new rental units.\nSupply of Low-Rent Units Is Dwindling \nThe supply of low-rent units continues to shrink. These \nunits rent for less than $600 a month—the maximum \namount affordable to a household earning $24,000 \nannually when applying the 30 percent of income \nstandard. In the last decade, the number of low-rent \nunits dropped by 2.1 million, including a loss of 230,000 \nfrom 2021 to 2022 alone. This left just 7.2 million units \nwith rents below $600 as of 2022 (Figure 13). Since 2012, \nthe market also lost an astounding 4.0 million units \nwith rents between $600 and $999. In total, the market \n0\n2\n4\n6\n8\n10\n12\n14\n16\n18\nUnder $600\n$2,000 and Over\nContract Rent\n2012\n2022\n$600-$999\n$1,000-$1,399\n$1,400-$1,999\nNotes: Rents are adjusted for inflation using the CPI-U Less Shelter. Units that are occupied but do not receive payment are excluded. \nContract rents exclude utility costs. \nSource: JCHS tabulations of US Census Bureau, American Community Survey 1-Year Estimates.\nFigure 13\nThe Stock of Low-Rent Units Is Shrinking\nNumber of Rental Units (Millions)\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n18\n\n\n--- Page 21 ---\nlost 6.1 million units renting for less than $1,000, the \nmaximum amount affordable to a household earning \n$40,000 per year. Various market forces have contrib­\nuted to these losses, including rent increases among \nexisting units, building condemnations and demoli­\ntions, and tenure conversions.\nDuring the same period, the supply of units renting \nfor between $1,000 and $1,399 increased by 400,000. \nThe market also gained 4.3 million units with rents \nbetween $1,400 and $1,999, and 4.1 million units renting \nfor $2,000 or more.\nThe declining supply of low-rent units, combined with a \nsteady stream of new construction targeting the high \nend of the market, has shifted the distribution of rents \nupward. In 2022, just 16 percent of units had contract \nrents below $600, down from 22 percent of the rental \nstock in 2012. Meanwhile, the share of units renting for \n$1,400 or more nearly doubled, from 21 percent to 38 \npercent of units.\nThe loss of low-rent units has been geographically \nwidespread, with decreases recorded in 47 states \nand the District of Columbia. Fully 42 states lost more \nthan 10 percent of their low-rent stock between 2012 \nand 2022, including 24 that lost more than 20 percent. \nAmong the hardest hit states were those previously \nconsidered more affordable that have seen swiftly \ngrowing rental demand, including Texas, North Caro­\nlina, and Georgia. Several Midwestern states also expe­\nrienced significant losses despite recording relatively \nslow rental demand, including Ohio, Michigan, and \nIndiana. In more expensive states already short on \nlow-rent units, the net decline extended much farther \nup the rent spectrum, with 16 states losing units at all \nrent levels up to $1,400.\nLow-rent units are an essential source of affordable \nhousing for households with lower and moderate \nincomes. In 2022, 60 percent of renter households \nliving in low-rent units earned less than $30,000 \nper year, including 36 percent with annual incomes \nbelow $15,000. For many renters at these income \nlevels, $600 a month is a stretch. Using the standard \nThe number of \nlow-rent units has \nfallen by 2.1 million \nin the last decade.\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n19\n\n\n--- Page 22 ---\n30 percent of income calculation, these households \ncan afford a monthly rent of no more than $750 and \n$375, respectively.\nAdditionally, low-rent units help house middle-income \nhouseholds that may also struggle to secure afford­\nable housing. In 2022, 28 percent of units renting for less \nthan $600 were occupied by middle-income house­\nholds earning between $30,000 and $75,000 annually. \nIncreasing the availability of units with lower rents and \npreserving the existing supply of these units is critical \nto ensuring that financially vulnerable households are \nable to secure housing they can afford.\nSupply Varies Across Geographies\nThe composition of the rental stock varies widely \nby region. In 2021, a third of rentals in the Northeast \nwere in large multifamily buildings, well above the \nWest (26 percent), Midwest (22 percent), or South (21 \npercent). The Northeast also had the largest propor­\ntion of rental units in small multifamily buildings, at 27 \npercent, compared to just 19 percent in the Midwest, \n15 percent in the West, and 14 percent in the South. \nConversely, the Northeast had the smallest proportion \nof single-family rentals, at 19 percent, while single-\nfamily homes were about a third of the rental stock \nin all other regions.\nRent levels likewise vary across regions, reflecting \ndifferences in the composition and age of the stock, \nhousehold incomes, and housing demand. High-cost \nrentals are most common in the West and Northeast. \nIn 2021, 45 percent of units in the West had rents of at \nleast $1,500, as did 34 percent of rentals in the North­\neast, well above the share in the South (19 percent) or \nthe Midwest (10 percent).\nThere are also notable differences in the rental stock \namong urban, suburban, and nonmetropolitan areas \n(Figure 14). In 2021, 40 percent of occupied rentals were \nin urban areas, 48 percent were in suburban areas, \n$600-$999\n$1,000-$1,249\n$1,250-$1,499\n$1,500 and Over\nUrban\nSuburban\nNonmetropolitan\nContract Rent\nUrban\nSuburban\nNonmetropolitan\nStructure Type\nUnder $600\nManufactured\n2-4 Units\n5-19 Units\n20 or More Units\nSingle Family\n0\n10\n20\n30\n40\n50\n60\n70\n80\n90\n100\nNotes: Only occupied rental units are depicted. Manufactured housing includes other structures such as boats and RVs. Contract \nrents exclude utility costs. Urban and suburban tracts fall within metropolitan statistical areas. Nonmetropolitan tracts fall outside of \nmetropolitan areas.\nSource: JCHS tabulations of US Census Bureau, 2021 American Community Survey 5-Year Estimates.\nFigure 14\nThe Rental Stock Varies Widely Across Markets, with Low-Rent Units More Common in  \nNonmetropolitan Areas\nShare of Rental Stock (Percent)\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n20\n\n\n--- Page 23 ---\nand 11 percent were in communities outside metro­\npolitan areas. In urban areas, over half (51 percent) of \nthe housing stock was rented, significantly more than \nin suburban (30 percent) and nonmetropolitan areas \n(28 percent). Nearly three-quarters of rentals in urban \nneighborhoods were multifamily units, compared to \n59 percent in suburban neighborhoods and 41 percent \nin neighborhoods outside metropolitan areas. Apart­\nments in large multifamily buildings with 20 or more \nunits were also far more common in urban communi­\nties, accounting for 31 percent of the rental stock there, \nwell above the shares in suburban (19 percent) and \nnonmetro (8 percent) areas.\nIn contrast, nonmetropolitan and suburban commu­\nnities have a much higher proportion of single-family \nand manufactured homes for rent. In 2021, about half \nof rental units outside metropolitan areas were single-\nfamily homes, compared to 36 percent in suburban \nareas and 26 percent in urban areas. Manufactured \nhousing accounted for 13 percent of all rentals in \nnonmetropolitan communities but was much less \ncommon in suburban areas (5 percent) and virtually \nabsent from urban areas (1 percent). In fact, while \nnonmetropolitan areas accounted for just 11 percent \nof all rental units, they contained a third of the nation’s \nmanufactured housing supply.\nRent levels also vary greatly across urban, suburban, \nand nonmetropolitan geographies. Urban and \nsuburban areas have significantly higher shares of \nunits renting for at least $1,500 (25 percent and 26 \npercent, respectively), compared to just 4 percent of \nrentals in communities outside metropolitan areas. \nNonmetropolitan areas tended to be priced lower, \nwith 53 percent of units renting for less than $600, \ncompared to just 15 percent of rentals in suburban \nareas and 17 percent in urban areas. In total, commu­\nnities outside metropolitan areas contain just over a \nquarter of the nation’s stock of units that rent for less \nthan $600. \nLocation of Rental Stock Contributes \nto Inequalities\nThe nation’s rental stock is unevenly distributed across \nneighborhoods, limiting where renters can live. In 34 \npercent of neighborhoods, less than 20 percent of the \nhousing stock is available to rent, resulting in commu­\nnities that are essentially rental deserts. Conversely, \nowner-occupied homes account for less than 20 \npercent of the stock in just 6 percent of neighborhoods.\nRental deserts tend to be located in suburban areas \nwhere restrictive land use policies make it difficult to \nbuild multifamily housing, which is predominantly \nrenter-occupied. In 2021, suburban neighborhoods \nconstituted 55 percent of census tracts nationally, \nbut 68 percent of neighborhoods where less than 20 \npercent of the stock is available to rent.\nSingle-family homes, which tend to be owner-occu­\npied, are much more common in these communi­\nties. In neighborhoods where less than 20 percent of \nhousing is rental, single-family homes accounted for \n85 percent of all housing in 2021, compared to just 17 \npercent of the housing stock in neighborhoods that are \nmore than 80 percent rentals. Large multifamily build­\nings with 20 or more units accounted for just 2 percent \nof the housing stock in rental deserts, compared to 42 \npercent of the units in neighborhoods with abundant \nrental housing.\nThe lack of rental options in many neighborhoods rein­\nforces inequities and contributes to socioeconomic \nsegregation. Communities with little rental housing \nhave higher median incomes, reflecting renters’ \ntypically lower annual incomes. In 2021, the median \nhousehold income in rental desert neighborhoods was \n$92,000, almost twice that of the $49,000 median in \nareas with robust rental options.\nFurther, the limited availability of rental housing in some \nneighborhoods constrains housing options for many \npeople of color. A long history of racially discriminatory \ngovernment policies and real estate practices has \nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n21\n\n\n--- Page 24 ---\nrestricted neighborhood choice and prevented many \nhouseholds of color from becoming homeowners. \nThese actions, along with discrimination in education \nand labor markets, have contributed to higher rent­\nership rates among Black and Hispanic households.\nThe legacy of these inequities is evident in the low \nshare of households of color in rental deserts. In 2021, \npeople of color headed just 24 percent of households \nin rental deserts, as compared to 66 percent of house­\nholds in neighborhoods where more than 80 percent \nof homes are rented. The share of households headed \nby a Hispanic person was three times higher in neigh­\nborhoods with abundant rental options than in rental \ndeserts (30 percent versus 10 percent), and the share \nheaded by a Black person was nearly four times higher \n(22 percent versus just 6 percent).\nThese patterns of residential segregation are difficult \nto undo in part because they are reinforced by various \nland use regulations. Single-family zoning and other \ndensity limitations restrict the development of multi­\nfamily buildings, effectively making it more challenging \nto add rental housing. Several states and communities \nhave recently enacted zoning changes to allow for \nmore types of housing in areas previously zoned exclu­\nsively for single-family homes. These zoning changes \ncould increase rental options in neighborhoods where \nfew exist, help expand the geographic options avail­\nable to renters, and better integrate communities.\nHousing Inadequacy Persists\nThe rental stock is older than at any other recorded \ntime. In 2021, the median age of renter-occupied\nhomes reached 44 years, up from 39 years a decade \nearlier and 34 years in 2001. Investment in the aging \nhousing stock is vital, given the persistence of \nsubstandard housing. Despite improvements in \nbuilding codes and construction standards, as well \nas upgrades and repairs to existing units, 3.9 million \nrenter households lived in homes that did not meet \nbasic standards for suitability and safety in 2021. This \nrepresents an overall increase of 350,000 households \nover the past two decades.\nThe rental stock is \nolder than it’s ever \nbeen at a median \nage of 44 years.\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n22\n\n\n--- Page 25 ---\nAccording to data from the most recent American \nHousing Survey, in 2021, 8.4 percent of renter house­\nholds lived in substandard housing with multiple prob­\nlems such as structural deficiencies, a lack of upkeep, \nor the inconsistent provision of basic features such \nas hot and cold running water, heat, and electricity. \nPhysical inadequacy from disrepair and structural \ndeterioration is much more common in older homes. \nOverall, 13 percent of units built before 1940 were clas­\nsified as physically inadequate in 2021, more than twice \nthe 6 percent share of newer units built between 2000 \nand 2021.\nGiven that substandard units tend to have low rents, \nhouseholds with lower incomes are more likely to \noccupy these homes (Figure 15). In 2021, 12 percent \nof renter households earning less than $15,000 lived \nin inadequate housing, double the 6 percent of \nrenters with incomes of $75,000 or more. While most \nsubsidized housing properties meet basic safety \nand suitability standards, severe underfunding of \n0\n2\n4\n6\n8\n10\n12\nBlack\nHispanic\nWhite\nAsian\nUnder\n$15,000\n$15,000-\n$29,999\n$30,000-\n$44,999\n$45,000-\n$74,999 \n$75,000\nand Over\nAll\nHouseholds\nRace/Ethnicity \nHousehold Income\nNotes: Housing inadequacy refers to a variety of structural deficiencies, such as large holes and leaks or the absence of basic features \nincluding plumbing, electricity, water, or heat. HUD classifies units as moderately or severely inadequate depending on the type and \nnumber of these physical problems. Black, Asian, and white householders are non-Hispanic. Hispanic householders may be of any race. \nSource: JCHS tabulations of US Department of Housing and Urban Development, 2021 American Housing Survey.\nFigure 15\nRenters with Lower Incomes and Those of Color Disproportionately Live in Inadequate Housing\nShare of Renters in Inadequate Housing (Percent)\nproject-based assistance programs has left 1 in 10 \nrenters living in public housing or HUD-assisted private \nmultifamily housing with inadequate conditions. \nDespite inspection standards, 11 percent of renters \nwith Housing Choice Vouchers lived in inadequate \nconditions in 2021.\nBlack and Hispanic households are more likely to live \nin inadequate housing, a product of long-standing \ndiscriminatory policies and practices that have often \nsteered households of color to neighborhoods with \nolder and less-adequate housing. In 2021, 10 percent \nof Black and Hispanic renter households lived in inad­\nequate housing, well above the shares for white (7 \npercent) and Asian households (6 percent). These \ndisparities persist even after accounting for differences \nin income. A HUD report also found that American \nIndian and Alaska Native households dispropor­\ntionately experience poor housing quality, including \nunits with structural problems, system deficiencies, \nand overcrowding.\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n23\n\n\n--- Page 26 ---\nEven among units that meet the criteria for phys­\nical adequacy, many have significant problems that \nimpact occupant health and safety. A 2023 study by \nthe Federal Reserve Bank of Philadelphia found that \nin 2022, 37 percent of renter-occupied units had at \nleast one critical home repair need, such as fixing a \ncracked foundation, replacing broken equipment, or \nremediating mold, and estimated the total cost of \naddressing these deficiencies at $51.5 billion.\nEven the structurally adequate stock does not typi­\ncally meet the needs of people with disabilities. In \n2019, 4 percent of renter households reported diffi­\nculties entering or navigating their homes, including 18 \npercent of renters age 80 and over, as reported in the \nAmerican Housing Survey. And nearly half of renters \nwith disabilities said their homes were minimally or \nnot at all accessible, according to a 2023 Freddie Mac \nsurvey. Given the aging of both the rental stock and \nthe nation’s population, there is an urgent and growing \nneed to repair or modify existing units to ensure habit­\nability, safety, and accessibility.\nExposure to Disasters Threatens the \nRental Stock\nEnvironmental hazards such as wildfires, flooding, \nearthquakes, and hurricanes increasingly jeopar­\ndize the health and safety of renters and threaten to \ndamage or destroy housing. About 41 percent of the \nnation’s occupied rental stock (18.2 million units) is \nlocated in areas exposed to substantial weather- and \nclimate-related threats as measured by expected \nannual economic losses for multiple hazards, \naccording to the Federal Emergency Management \nAgency’s National Risk Index.\nThese areas are geographically diverse, reflecting the \nvariety of acute and chronic environmental hazards \nthat impact every part of the country (Figure 16). Cali­\nfornia has the most rental units located in census tracts \nwith at least moderate expected annual economic \nlosses caused by hazards. There, 4.6 million units—77 \npercent of the state’s rental stock—are at risk of \ndamage or destruction, followed by Florida, with 2.4 \nmillion units (89 percent) at risk.\nNumber of Rental Units \nin High-Risk Counties\nUnder 2,000\n2,000–9,999\n10,000–19,999\n20,000 and Over (Up to 1.6 Million)\nNotes: High-risk areas have a relatively moderate, \nrelatively high, or very high expected annual loss \n(EAL) score. EAL represents the average economic \nloss in dollars resulting from natural hazards each \nyear. The number of units in high-risk counties is \naggregated from the tract level.\nSource: JCHS tabulations of Federal Emergency \nManagement Agency, July 2023 National Risk \nIndex EAL data, and US Census Bureau, 2021 \nAmerican Community Survey 5-Year Estimates.\nFigure 16\nMore Than 18 Million Rental Units Are Under Threat from Environmental Hazards\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n24\n\n\n--- Page 27 ---\nNationally, more than a third of units in small, midsize, \nand large multifamily buildings (35–40 percent) \nare located in census tracts with substantial annual \nlosses, as are 45 percent of single-family rentals \nand just over half of manufactured rentals. Because \nmanufactured housing units are the most likely to \nbe classified as physically inadequate, they may be \nespecially susceptible to damage or destruction from \ntheir hazard exposure.\nThe already limited supply of low-rent and feder­\nally subsidized units is also at risk. Indeed, 3.2 million \nunits with rents below $600 (38 percent) are in at-risk \nareas. An additional 1.2 million Low-Income Housing \nTax Credit units (40 percent) are at risk from envi­\nronmental hazards, along with 34 percent of proj­\nect-based HUD units. This includes 960,000 units that \nare public housing, Project-Based Section 8, affordable \nhousing for older adults, and supportive housing for \nhouseholders with disabilities. Also at risk are 200,000 \nunits (52 percent) subsidized by the US Department \nof Agriculture’s rural multifamily housing program. \nThe growing exposure to hazards will only compound \nthese units’ numerous preservation needs.\nNotably, newer rental units are much more likely to be \nvulnerable to weather- and climate-related hazards. \nNearly half of rentals built in 2000 or later are located \nin areas with substantial losses, double the 24 percent \nof rentals built before 1940. Still, those built before \n1940 have the highest rate of physical inadequacy of \nany rental units, so they may be more vulnerable to \ndamage caused by environmental hazards.\nAs a growing number of rental units are damaged by \nenvironmental hazards, the cost to repair and rebuild \nhomes will increase, as will the insurance costs in high-\nrisk areas. At the same time, the escalating frequency, \nseverity, and diversity of disasters, coupled with the \nmagnitude of their likely damages, will necessitate \ngreater investments in pre-disaster mitigation and \nclimate adaptation strategies for both properties and \nregions. Otherwise, the increasing incidence of costly \ndisasters will almost certainly render an increasing \nnumber of rental units uninhabitable, forcing resi­\ndents to relocate and threatening to further reduce \nthe supply of rental housing.\nThe Outlook\nWith more supply coming online across the country, the \nrental stock is likely to expand, though with a changing \ncomposition. A growing share of the rental stock is \nmore expensive units in larger buildings. New construc­\ntion is furthering this trend by increasingly targeting \nthe high end of the market. In contrast, the supply of \nunits in small multifamily buildings—which tend to \nhave lower median rents—remains largely unchanged.\nThe shifting composition, coupled with the high cost \nof new construction and the deep need at the lower \nend of the market, suggests that new market-rate \nsupply alone will do little to bring immediate relief to \nthose with lower incomes. For these households, the \nnumber of affordable options is declining as low-rent \nunits are demolished, converted to owner-occupancy, \nor repriced at higher rents.\nMoreover, the lack of diverse rental options in many \nsuburban communities constrains where households \ncan choose to live. Regulatory barriers restrict the \namount of multifamily housing that can be built in \nneighborhoods with few rental opportunities.\nAdditionally, the existing stock requires significant \ninvestment. The level of structural inadequacy has \nnot improved in decades, and critical repairs and \nreplacements are imperative to ensure that the units \nare of decent quality. Further, steps must be taken to \nmitigate the impact of climate-related hazards on \nlow-rent and subsidized units while reducing the loss of \nthe stock and preserving its affordability. Finally, there \nis an urgent need to make accessibility modifications \nin response to the nation’s rapidly aging population. \nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n25\n\n\n--- Page 28 ---\nRENTAL\nMARKETS \nA steady stream of new supply and stabilizing demand have cooled rental markets from their pandemic-induced \nfrenzy. As vacancy rates have risen from historic lows, rent growth has plummeted from its record-breaking \npace. While multifamily housing completions remain near historic highs, construction starts are slowing as \ninterest rates rise. The increasing costs of debt and equity have dampened multifamily performance and raised \nexpenses for apartment operators. Nevertheless, the relatively strong performance of multifamily properties \nover the longer term has attracted new investors to the rental market.\nRent Growth Cools as Vacancies Rise \nRobust new supply and stabilizing demand have \nbrought rent growth to a near standstill. Rents for \nprofessionally managed apartments grew just 0.4 \npercent annually in mid-2023. This is a dramatic turn­\naround from the prior year when apartment rents \nincreased by a record-breaking 15.3 percent year \nover year. The current pace is more than 3 percentage \npoints below the 3.6 percent pace averaged in the five \nyears leading up to the pandemic. \nRent growth slowed across property classes. For higher-\nquality Class A units, rent growth decelerated from a \nrecord-breaking 18.5 percent annual pace in early 2022 \nto just 0.8 percent in the third quarter of 2023. Similarly, \nrents for Class B and Class C apartments grew annu­\nally by just 0.1 percent and 0.7 percent, respectively, in \nthe third quarter of 2023—down from 16.1 percent and \n8.5 percent at the beginning of 2022.\nRents for single-family units also slowed, according to \nthe CoreLogic Single-Family Rent Index. In this market \nsegment, rents grew just 2.9 percent year over year \nin August 2023, significantly below the record-high \ngrowth of more than 14 percent in 2022 and similar \nto the pre-pandemic annual growth rate. Further, the \nConsumer Price Index for rent of primary residence, \nwhich covers the entire rental stock and is slow to \nregister changes, decelerated in mid-2023 from a \nfour-decade high of 8.8 percent in March 2023 to 7.2 \npercent in October 2023. \nThe slowdown in apartment rent growth was \ngeographically widespread. In the third quarter of 2023, \njust 1 percent of markets experienced rent growth of \nat least 10 percent annually, down from 50 percent of \nmarkets a year earlier. Instead, the majority of markets \n(61 percent) experienced only moderate rent growth \nunder 5 percent, as compared to just 4 percent of \nmarkets in the prior year. And whereas not a single \nmarket reported negative rent growth in mid-2022, \nrents declined in 32 percent of markets in mid-2023. \nThe areas with the fastest-growing rents in the third \nquarter of 2023 include many less expensive markets \nin the South, Midwest, and Northeast, such as Midland \n-Odessa, Madison, Champaign-Urbana, Trenton, and \nSpringfield, Massachusetts, where apartment rents \ngrew by at least 6 percent annually. In contrast, the \nbulk of the markets with declining rents was in the West \nand South, with year-over-year decreases of at least 4 \npercent in Boise, Phoenix, Austin, and Las Vegas. Simi­\nlarly, single-family rent growth was lowest or negative \nin metros in the West and South, including Las Vegas, \nMiami, and Austin. While slowing rent growth may help \n04\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n26\n\n\n--- Page 29 ---\nto address the affordability crisis, any relief will only be \nincremental, given that rents mostly remain elevated \ncompared to pre-pandemic levels. \nSome of the slowing rent growth is attributable to \nrising vacancy rates. Nationally, the rental vacancy \nrate reached 6.6 percent in the third quarter of 2023, \naccording to the Census Bureau’s Housing Vacancy \nSurvey. After falling to a pandemic low of 5.6 percent \nrecorded in late 2021, the recent vacancy rate was on \npar with the 6.9 percent rate averaged in the five years \npreceding the pandemic. \nRealPage data show an even more dramatic shift \nfor professionally managed apartments (Figure 17). \nThe vacancy rate for these rental units climbed to 5.5 \npercent in the third quarter of 2023, a sharp turnaround \nfrom early 2022, when surging demand brought the \nvacancy rate to a record low of just 2.5 percent in the \nfirst quarter. Since then, vacancy rates for professionally \nmanaged apartments have increased fastest in the \nSouth (up 3.5 percentage points, to 6.3 percent) and the \nWest (up 2.9 percentage points, to 5.2 percent). Nation­\nally, vacancies are somewhat higher in the most expen­\nsive Class A market segments since a large volume of \nnewly constructed units was added to the stock. \n0\n1\n2\n3\n4\n5\n6\n7\n2015\n2016\n2017\n2018\n2019\n2020\n2021\n2022\n2023\nUS\nNortheast\nMidwest\nSouth\nWest\nNote: Vacancy rates are four-quarter trailing averages for \nprofessionally managed apartments in buildings with five  \nor more units. \nSource: JCHS tabulations of RealPage data.\nFigure 17\nApartment Vacancy Rates Are Rising Every-\nwhere, Most Dramatically in the South\nApartment Vacancy Rate (Percent)\nHigh Interest Rates Constrain \nMultifamily Financing\nThe recent uptick in interest rates from their historic \nlows is cooling rental market activity. The interest rates \nfor fixed-rate multifamily loans are often anchored \nto the yield for 10-year Treasury notes. In the second \nquarter of 2023, the yield rate on these Treasuries was \n3.6 percent, nearly 3 percentage points above the rate \nrecorded in the first year of the pandemic and the \nhighest since the Great Recession. As a result, apart­\nment mortgage rates jumped to 5.5 percent for 7- and \n10-year fixed-rate loans in June 2023, according to \nMSCI—an increase of more than two percentage points \nfrom October 2021.\nRising interest rates increase the cost of the debt that \ninvestors and developers use to acquire and build \nmultifamily properties. At the same time, high Treasury \nyields increase the cost of equity, as investors require \nhigher returns to compete with lower-risk Treasury \nnotes. Consequently, it becomes harder to make proj­\nects financially feasible. To make the same project \nwork with an equal rate of return in a high interest rate \nenvironment, property developers and owners would \nneed more revenue to offset the increased capital \ncosts, meaning rents would need to be higher. \nLenders typically want properties to have a debt \nservice coverage ratio—the ratio of total monthly net \nincome to total monthly debt service payments—of at \nleast 1.2. However, the high cost of debt in 2023 has, all \nelse being equal, pushed down debt service coverage \nratios, making it more difficult for developers to qualify \nfor the same amount in loans. Knowing they would \nlikely be declined, potential borrowers have pulled \nback from even applying for financing. More than half \nof the banks surveyed by the Federal Reserve noted \nthat demand for multifamily loans has decreased. \nAdditionally, uncertainty about apartment perfor­\nmance and the broader economy has tightened \nmultifamily underwriting among nearly two-thirds \nof the surveyed banks. \nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n27\n\n\n--- Page 30 ---\nThe slowdown in borrowing and lending has been \nsubstantial. According to the Mortgage Bankers \nAssociation (MBA), multifamily mortgage orig­\ninations dropped 48 percent year over year in the \nsecond quarter of 2023. With declining originations, \nthe amount of multifamily debt outstanding increased \nby less than $30 billion in the second quarter to $2.03 \ntrillion, the weakest second-quarter showing in four \nyears (Figure 18). \nNevertheless, the sources of multifamily lending \nhave remained relatively stable. The government-\nsponsored entities Fannie Mae and Freddie Mac \ncontinued to hold nearly half of all multifamily mort­\ngage debt and posted the largest quarterly gain of any \ninvestor group in mid-2023. Banks and thrifts increased \ntheir holdings at about half the rate of Fannie Mae and \nFreddie Mac but still held 30 percent of multifamily \nmortgage debt. Meanwhile, mortgage debt held in \ncommercial mortgage-backed securities (CMBS) \nmade up just 3 percent of the market. \n0\n10\n20\n30\n40\n50\n60\n2015\n2016\n2017\n2018\n2019\n2020\n2021\n2022\n2023\nQuarterly Change\nAverage Change (4-Quarter Trailing)\nSource: JCHS tabulations of Mortgage Bankers Association data.\nFigure 18\nMultifamily Mortgage Flows Are Slowing\nMultifamily Mortgage Debt Outstanding (Billions of Dollars)\nMultifamily Starts Slow as \nCompletions Remain High\nMultifamily construction is slowing in the face of soft­\nening rent growth and rising vacancy and interest \nrates. After averaging 536,000 units in the first six \nmonths of 2023, multifamily starts slowed to a season­\nally adjusted annual rate of 402,000 units in October \n2023. Though this marked a 30 percent decline from \nthe pace one year earlier, starts are decreasing from \nextremely high levels and remain relatively robust. \nWhile multifamily starts are cooling, the single-family \nbuilt-for-rent sector has remained strong. A small \nshare of new single-family construction is built specif­\nically for the rental market. However, the number has \ngrown steadily over the last decade, with an espe­\ncially large uptick during the pandemic. In 2022, 69,000 \nsingle-family rental homes were started, a 77 percent \nincrease over 2019. In the third quarter of 2023, single-\nfamily rental starts hit a new record high with an annual \nrate of 70,000 homes. \nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n28\n\n\n--- Page 31 ---\nMultifamily units already under way also continue to \ncome online at historically high numbers (Figure 19). \nOn a seasonally adjusted annualized basis, 436,000 \nmultifamily units were completed in the third quarter \nof 2023, up 30 percent from pre-pandemic levels. This \nhas helped to maintain the steady flow of comple­\ntions despite the slowdown in starts. On a seasonally \nadjusted basis, the number of multifamily units under \nconstruction reached a record high of 1.0 million units \nin July 2023 that continued through October 2023. \nThough the slowdown in multifamily starts could lead \nto supply challenges in the coming years, the huge \npipeline of units currently under construction has the \npotential to ease rents in the near term. Research \nby RealPage suggests that new supply puts down­\nward pressure on rent growth in markets where \nnew units are added. In several geographies where \nnew supply increased at a rate above the national \naverage in 2023, rent growth notably cooled. Apart­\nment absorption—the difference between the number \nof households moving in and the number moving \nout—increased in mid-2023, which suggests that new \nsupply is accommodating new households while still \nallowing rents to moderate. \n0\n100\n200\n300\n400\n500\n600\n700\n800\n900\n1,000\n1982\n1984\n1986\n1988\n1990\n1992\n1994\n1996\n1998\n2000\n2002\n2004\n2006\n2008\n2010\n2012\n2014\n2016\n2018\n2020\n2022\nStarted\nUnder Construction\nCompleted\nNote: Data for 2023 represent the seasonally adjusted year-to-date average through October.\nSource: JCHS tabulations of US Census Bureau, New Residential Construction data. \nFigure 19\nCompletions Remain High and a Record Number of Units Are Under Construction\nMultifamily Units (Thousands)\nConstruction Delays and Costs\nAre Increasing\nWhile there is a healthy level of new supply under \nconstruction, the question of when it will come online \nremains unanswered as extended construction time­\nlines become increasingly common. The average \nnumber of months from start to completion for multi­\nfamily buildings reached 17.0 in 2022, up from 15.4 in \n2021 and 10.8 in 2012. Between 2021 and 2022, the time \nto complete single-family homes increased from 7.2 to \n8.3 months. A survey of construction and development \nfirms conducted by the National Multifamily Housing \nCouncil in September 2023 found that 88 percent of \nrespondents reported construction delays.\nSuch interruptions can add to the cost of new devel­\nopment, as do the rising costs of labor and materials. \nIn the second quarter of 2023, the employment cost \nindex for private industry construction workers was \nup 5 percent from the prior year and 14 percent since \nthe start of the pandemic. The price of all inputs to \nnew residential construction, excluding capital invest­\nment, labor, and imports, also increased, up 35 percent \nsince March 2020—more than triple the growth rate in \nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n29\n\n\n--- Page 32 ---\nthe equivalent period before the pandemic. The cost \nof ready-mix concrete, lumber, and brick and clay \nstructural tile each rose by at least 25 percent after \nthe pandemic, with even steeper price increases for \ngypsum (41 percent) and plastic construction products \n(35 percent). \nIn response to both rising costs and the growing \ndemand from higher-income renters, new rental \nunits increasingly target the high end of the market. \nConstruction remains highly concentrated in large \nmetros, where land is most expensive. The NAHB Home \nBuilding Geography Index indicates that 69 percent of \nmultifamily permitting in the second quarter of 2023 \nwas in large metro areas. Reflecting these trends, \nasking rents for new units continue to climb. In the \nsecond quarter of 2023, the median asking rent for \nnew units was $1,760, up 39 percent from the second \nquarter of 2014, according to the Survey of Market \nAbsorption. Between 2015 and 2022, the share of newly \ncompleted units with asking rents of at least $2,050 \nnearly doubled, to 37 percent. In the same period, the \nshare of units with asking rents below $1,050 declined \nby two-thirds, to just 7 percent. This shift in new \nconstruction toward higher-cost apartments means \nmany units are unaffordable to households with low \nand moderate incomes. Whether this new supply will \nimprove affordability for these households in the longer \nterm remains to be seen.\nProperty Performance Weakens\nApartment operators’ cash flow has slowed, not \nonly because of decelerating rent growth but also \nbecause of increased operating costs and insurance \npremiums. According to Yardi Matrix, national total \noperating expenses for multifamily properties rose \nby 9.3 percent in the 12 months ending in June 2023. \nAdditionally, Trepp reported that property insurance \ncosts increased 13.6 percent annually for multifamily \nproperties in large metro areas in 2022. Consequently, \nnet operating incomes for apartments grew by just 3.5 \npercent annually in the third quarter of 2023, according \nto data from the National Council of Real Estate Invest­\nment Fiduciaries. This was a substantial deceleration \nfrom the pandemic high of 24.8 percent in late 2021 \nand put the pace of net operating income growth well \nbelow the 5.3 percent annual rate averaged in the five \nyears preceding the pandemic.\nAgainst this backdrop, apartment capitalization \nrates—the net operating income divided by the prop­\nerty price—have gradually risen. According to Moody’s \nAnalytics, cap rates fell through 2022 before rising by \n0.9 percentage points over the first three quarters of \n2023 to 5.8 percent. With the high interest rates on \n10-year Treasuries, the cap rate spread was just 1.6 \npercentage points, considerably lower than the 3.5 \npercentage point spread averaged between 2015 \nand 2019. Multifamily properties have thus become \na somewhat less attractive investment than before \nthe pandemic. \nRising cap rates are pushing apartment property \nprices down. According to Real Capital Analytics data, \napartment prices fell year over year at the beginning \nof 2023 for the first time since 2010 and were down 13 \npercent annually by the third quarter (Figure 20). This \nwas a substantial turnaround from the peak 23 percent \nprice growth posted at the beginning of 2022. \nAlong with apartment prices, transaction volumes \ncooled in 2023 as potential buyers and sellers paused \namid uncertainty about property performance and \nrising interest rates. According to MSCI, apartment \nsales transaction volumes declined by 72 percent \nin mid-2023 from the prior year. The 2023 second-\nquarter volume was less than 25 percent of the $165 \nbillion peak volume reached at the end of 2021, and \napproximately half of the $42 billion averaged quar­\nterly between 2015 and 2019. \nRisk of Delinquencies Grows\nAs net operating income growth slows, the risk of \ndelinquencies is increasing. So far, the composition \nof multifamily financing and the pre-pandemic period \nof rapidly accruing equity have staved off widespread \ndefaults. Currently, the most at-risk properties are \nthose with shorter-term loans taken out in the last two \nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n30\n\n\n--- Page 33 ---\n0\n100\n200\n300\n-15\n-10\n-5\n0\n5\n10\n15\n20\n25\n30\n2015\n2016\n2017\n2018\n2019\n2020\n2021\n2022\n2023\nChange in Apartment Prices\nIndexed Apartment Prices (Right Scale)\nNotes: Apartment prices are indexed to January 2015. Indexed values represent cumulative percent change.\nSource: JCHS tabulations of Real Capital Analytics, Commercial Property Price Indexes.\nFigure 20\nApartment Property Prices Have Fallen from Record Highs\nYear-over-Year Change (Percent)\t\nIndex Value\nyears that leave borrowers little chance to build equity \nbefore the loan matures. These loans are more likely \nto be held by banks, by investor-driven lenders, or in \nCMBS. The 30-day delinquency rate for CMBS loans has \nmoved upward for three consecutive quarters, hitting \n3.8 percent in the second quarter of 2023, according to \nMBA. However, CMBS are a small share of all multifamily \nloans. Further, the most recent delinquency rate is only \nslightly higher than the pre-pandemic average. Much \nof the increase has been driven by other commercial \nproperty types, such as retail, hotels, and offices. \nLonger-term loans that have fewer near-term matur­\nities make up the largest share of multifamily loans. The \n60-day delinquency rates for loans held by Fannie Mae \nand Freddie Mac rose slightly in the second quarter \nof 2023 to 0.37 percent and 0.21 percent, respectively. \nStill, delinquencies remain low. Commercial and multi­\nfamily loans by banks and thrifts followed the same \ntrend, with a 90-day noncurrent rate of 0.67 percent \nin the second quarter of 2023, up from 0.56 percent in \nthe first quarter of 2022. While increasing, these delin­\nquency rates nonetheless remain much lower than \nthe 4 percent rate recorded in the years following the \n2008 housing market crash. \nIn the event that slowing returns do lead to a greater \nuptick in delinquencies, new opportunities may \nemerge for potential property buyers to acquire a \nbuilding at a more favorable price, in turn freeing up \ncapital that they can then invest in the apartments. \nMeanwhile, property owners facing financial distress \nmight otherwise cut back on maintenance and repair, \nto the detriment of renters.\nOwnership of Rental Properties Shifts\nDespite the slowdown in rent growth and low cap rate \nspread, rental housing remains a popular investment \noption, offering a relatively good return compared to \nother commercial real estate asset classes. Although \ninvestor activity has lessened in the short term, the \nstrong and sustained performance of multifamily \nproperties over the past two decades has attracted \nnew investors. Most rental properties are still owned \nby individuals. But the healthy track record of return \non rental investment has also encouraged the profes­\nsionalization of smaller landlords, who are increasingly \nforming limited liability partnerships (LLPs) and limited \nliability companies (LLCs). \nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n31\n\n\n--- Page 34 ---\nThe share of rental properties owned by nonindividual \ninvestors, including LLPs, LLCs, real estate corpora­\ntions, and similar entities, keeps growing. Between 2001 \nand 2021, these investors increased their ownership \nshare by 9 percentage points, to 27 percent of rental \nproperties, according to the Rental Housing Finance \nSurvey (Figure 21). \nThe growth in ownership by nonindividual investors \nhas been especially swift among small multifamily \nproperties, for which these investors have historically \nbeen absent. Between 2001 and 2021, the share of 2- \nto 4-unit multifamily properties owned by nonindi­\nvidual investors increased by 17 percentage points, to \n32 percent. During the same period, the share of 5- to \n24-unit properties owned by nonindividual investors \nnearly doubled, to 67 percent. Among large rental \nproperties, nonindividual ownership shares are signifi­\ncantly higher. Nonindividual ownership of rental prop­\nerties with at least 50 units increased by 6 percentage \npoints since 2001, to 93 percent, and by 17 percentage \npoints, to 83 percent ownership of properties with 25 \nto 49 units. \nWhile nonindividual investors are somewhat less \nactive in the single-family rental market, they have \ngained market share here, too. Over the last two \ndecades, their ownership of single-family rentals \nincreased by 8 percentage points, to 25 percent. The \nscale at which these investors operate may affect \ntheir strategies. Larger institutional investors tend to \npurchase newer and bigger single-family rentals in \nareas with fast-growing populations and rapid rent \ngrowth. By comparison, smaller institutional investors \nare more likely to purchase smaller, older, and less \nexpensive properties. \nEven as the share of single-family rental homes owned \nby nonindividual investors has grown, overall investor \nactivity in this market has recently declined. This slow­\ndown is a response to both the current interest rate \nenvironment and uncertainty about rental property \nperformance, prompting some investors to opt for \nother asset classes. Redfin data show that single-\nfamily home purchases by institutions or businesses \nfell 30 percent annually in the third quarter of 2023. This \nis the largest third quarter decline since 2016, aside \nfrom the first quarter of 2023, when activity dropped \neven more sharply. Whether the presence of inves­\ntors in the single-family rental market will continue to \ngrow depends largely on the availability of homes to \npurchase, the interest rate environment, the strength \nof other investment returns, and the steadiness of the \ndemand for rental housing.\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n32\n0\n10\n20\n30\n40\n50\n60\n70\n80\n90\n100\n1 Unit\n2-4 Units\n5-24 Units\n25-49 Units\n50 Units or More\nTotal\nNumber of Units in Property\n2001\n2021\nNote: Nonindividual investors include partnerships, trustees for estate, real estate corporations, real estate investment trusts, nonprofit \norganizations, and other entities. \nSource: JCHS tabulations of US Census Bureau, Rental Housing Finance Surveys.\nFigure 21\nNonindividual Investors Own a Growing Share of Rental Properties\nShare of Properties Owned by Nonindividual Investors (Percent)\n\n\n--- Page 35 ---\nRising operating \nand insurance costs \nwill challenge rental \nhousing providers.\nThe Outlook\nWith demand stabilizing and a large volume of new \napartments coming online, rent growth will likely \nremain slower than the frenzied pace of the early \npandemic years, helping to cool overall inflation and \nrelieve some of the pressure on household budgets. \nThe robust multifamily construction pipeline may \nfurther moderate rent growth as new units hit the \nmarket. Even so, asking rents will likely remain above \npre-pandemic levels. And the new supply will continue \nto target the high end of the market as construction \ncosts rise. As a result, the forthcoming units will do \nlittle to solve the immediate affordability needs of \nlower-income households.\nAdditionally, high interest rates present a considerable \nchallenge for the apartment industry. As the costs of \ndebt and equity rise, ensuring that deals are profitable \nhas become increasingly difficult. New construction \nand property transactions have shown signs of slowing \nas developers and buyers wait for greater economic \ncertainty and a more favorable financing environment. \nThese dynamics are likely to persist, given the expec­\ntation that interest rates will remain high for at least \nthe near term. If construction continues to slow and \nthe supply once again constricts relative to demand, \nthe affordability gains achieved at the high end of the \nrental market could be lost. \nIncreased operating and insurance costs will also \ncontinue to challenge housing providers, especially \nthose that are small scale or operate subsidized apart­\nments and smaller rental properties. In the face of \nfalling returns, housing providers may be less able to \nafford urgently needed repairs to the aging stock and \npreserve low-rent and assisted units. \nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n33\n\n\n--- Page 36 ---\nRENTAL \nAFFORDABILITY\nThe number of renters living in unaffordable housing has reached an all-time high and includes households \nacross the income spectrum and around the country. The growing shortage of units affordable to renters with \nthe lowest incomes is only worsening the affordability crisis. Though rent increases have leveled relative to \nthe pandemic spike, rents remain elevated and are straining household balance sheets. Inflation has further \nchallenged renters. Many lower-income households are struggling to cover basic needs and are confronting \ndifficult trade-offs that threaten their financial stability and overall well-being. \nCost Burdens Have Hit \nUnprecedented Heights\nCost burdens have reached record highs, fueled by \nrapidly rising rents during the pandemic. In 2022, the \nnumber of renter households spending more than \n30 percent of income on rent and utilities reached \n22.4 million, up from 20.4 million in 2019. Alarmingly, \nthe number of severely cost-burdened renter house­\nholds—those spending more than half of their income \non housing and utilities—also hit an all-time high of \n12.1 million in 2022, a full 1.5 million households above \npre-pandemic levels. \nThese recent increases stand in stark contrast to the \nmodest declines in cost burdens recorded before \nthe pandemic. Between 2014 and 2019, the number \nof cost-burdened renter households fell by about \n883,000, stemming from a substantial decrease \nin severe burdens. However, in the aftermath of the \npandemic surge, the record-high number of cost-bur­\ndened households in 2022 exceeded the 2014 pre-pan­\ndemic peak by nearly 1.1 million and marked a 7.6 million \nincrease over the low posted in 2001.\nNot only has the number of cost-burdened renters \ngrown, so has their share of the total renter popu­\nlation. In 2022, half of renter households were cost \nburdened, up 3.2 percentage points since 2019 and \n9.0 percentage points since 2001. Likewise, the share \nof severely burdened renter households rose quickly \nduring this period, from 24 percent in 2019 to 27 percent \nin 2022, 6.3 percentage points above the 2001 low. \nCost Burdens Are Climbing the \nIncome Scale\nRenter households at all income levels have expe­\nrienced rising cost-burden rates over the last two \ndecades (Figure 22). The pandemic accelerated this \ntrend. In recent years, cost-burden rates hit record \nhighs across all income groups. Middle-income renters \nhave especially felt the pain of increasing housing \ncosts. Just over two-thirds (67 percent) of house­\nholds earning $30,000 to $44,999 per year were cost \nburdened in 2022, an increase of 2.6 percentage points \nfrom 2019 and a shocking 15.1 percentage points above \n2001 levels. \n05 \nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n34\n\n\n--- Page 37 ---\n0\n10\n20\n30\n40\n50\n60\n70\n80\n90\n2001\n2019\n2022\n2001\n2019\n2022\n2001\n2019\n2022\n2001\n2019\n2022\n2001\n2019\n2022\nHousehold Income\nAll Renter Households\n$75,000 and Over\n$45,000-$74,999\n$30,000-$44,999\nUnder $30,000\nSeverely Cost Burdened\nModerately Cost Burdened\nNotes: Household incomes are adjusted for inflation using the CPI-U for All Items. Moderately (severely) cost-burdened households \nspend 30–50% (more than 50%) of income on rent and utilities. Households with zero or negative income are assumed to have severe \nburdens, while households that are not required to pay rent are assumed to be unburdened. \nSource: JCHS tabulations of US Census Bureau, American Community Survey 1-Year Estimates.\nFigure 22\nCost Burdens Continued to Increase Across Incomes During the Pandemic\nShare of Renter Households (Percent)\nRenter households with annual incomes of $45,000 \nto $74,999 have seen the fastest growth in their \nburden rates, both over the longer term and during \nthe pandemic. Indeed, 41 percent of renter households \nin this income category were burdened in 2022, a \n5.4 percentage point increase since the start of the \npandemic, nearly doubling their 2001 rate. \nEven many renter households earning at least $75,000 \nannually have felt increased financial strain. Cost-\nburden rates for this income bracket have risen 2.2 \npercentage points since the start of the pandemic and \n6.4 percentage points over the longer two-decade \nsweep. Still, cost-burden rates for this group remain \nrelatively low at just 11 percent. \nMost concerning is the rapid increase in cost burdens \namong lower-income renter households, a group that \nalready had a high burden rate. The share of cost-bur­\ndened renter households earning less than $30,000 \nannually rose 1.5 percentage points from 2019 to 2022. \nWhile this increase is notable for any group, these \nrenters have consistently grappled with widespread \nand persistent housing hardships. From 2001 to 2019, \nthe cost-burden rate among renter households with \nlower incomes hovered between 77 and 82 percent. \nIn 2022, 83 percent of these households were cost \nburdened, with the majority (65 percent) experiencing \nsevere burdens, marking yet another all-time high. The \nnew rental stock is unlikely to bring immediate relief \nto these households because the bulk of these units \ncharges high rents. \nDisparities in Cost Burdens Persist\nWhile overall cost-burden rates are high, some demo­\ngraphic groups experience higher rates than others. \nLong-standing discrimination in housing, employment, \nand education has contributed to disproportionately \nhigh cost-burden rates for renter households headed \nby a Black, Hispanic, or multiracial person. In 2022, \nmore than half of Black (57 percent), Hispanic (54 \npercent), and multiracial (50 percent) households \nwere cost burdened, while rates were lower for white \n(45 percent), Asian (44 percent), and Native American \n(44 percent) households. \nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n35\n\n\n--- Page 38 ---\nEven accounting for income, households headed \nby a white person were more likely to find afford­\nable housing than those headed by most people of \ncolor. Among households with annual incomes under \n$30,000, cost-burden rates are highest for those \nheaded by a Hispanic (87 percent), Asian (86 percent), \nBlack (85 percent), or multiracial (84 percent) person, \nas compared to their white counterparts (80 percent). \nOnly lower-income households headed by a Native \nAmerican person fared better than white renter house­\nholds, with a cost-burden rate of 72 percent, though \nthese households face other housing challenges, \nincluding inadequate conditions and overcrowding.\nCost burdens also vary by age and are most common \namong the youngest and oldest renters, many of \nwhom have lower incomes than individuals in their \nprime earning years. In 2022, a stunning 61 percent \nof renter households headed by someone under age \n25 were cost burdened, including 37 percent with \nsevere burdens. Unsurprisingly, the cost-burden rate \ndropped substantially for renter households in their \nprime earning years, to about 45 percent for those \nheaded by someone aged 25–54. Still, even among \nthis subset, nearly a quarter are severely burdened. \nThe rate then begins to rise again, increasing slightly \nto 49 percent for households headed by someone \naged 55–64, including 28 percent with severe burdens, \nand continues upward. Fully 57 percent of renter \nhouseholds headed by someone age 65 and over \nwere cost burdened, with 34 percent experiencing \nsevere burdens. \nAcross all age groups, cost-burden rates are higher \namong renters with disabilities, as workplace chal­\nlenges can limit employment options and earnings. \nIn fact, 60 percent of renter households headed by \nsomeone with a disability were cost burdened in 2022, \na whopping 13 percentage points higher than their \ncounterparts who did not have a disability. The finan­\ncial burden is especially significant for young adult \nrenters with disabilities. Among those under age 25, \ntwo-thirds were cost burdened.\nEven many fully employed households struggle \nwith housing costs. Just over a third—8.0 million—of \nthe renter households headed by a full-time, year-\nround worker were cost burdened in 2022 (Figure 23). \n0\n10\n20\n30\n40\n50\n60\nPersonal\nCare\nFood\nPreparation\nHealthcare\nSupport\nSales\nConstruction\nEducation\nSocial\nService\nHealthcare\nPractitioner\nBusiness\nAll\nOccupations\nOccupation Types\nNotes: Fully employed householders reported working at least 35 hours per week for at least 50 weeks of the previous year. All \noccupations includes households in occupations not shown. Cost-burdened households spend more than 30% of income on rent and \nutilities. Households with zero or negative income are assumed to be burdened, while households that are not required to pay rent are \nassumed to be unburdened.\nSource: JCHS tabulations of US Census Bureau, 2022 American Community Survey 1-Year Estimates.\nFigure 23\nFully Employed Renters in a Range of Occupations Are Cost Burdened\nShare of Fully Employed Renters with Cost Burdens (Percent)\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n36\n\n\n--- Page 39 ---\nRenters working in personal care (including child­\ncare workers, fitness trainers, and hairstylists) or in \nfood preparation occupations were especially likely \nto spend an outsize portion of their income on rent. \nMore than half of renter householders working full time \nin these occupations were cost burdened, including \nabout a quarter who were severely burdened. \nOf course, occupations and earnings are related to \neducation, a dynamic reflected in cost-burden rates \nas well. In 2022, the burden share among renter house­\nholds headed by someone with at least a college \ndegree was 39 percent—more than 19 percentage \npoints lower than the 59 percent of cost-burdened \nhouseholds headed by someone who lacked either a \nhigh school diploma or a GED.\nDifferences in cost-burden rates are also influenced by \nboth the number of potential earners in a household \nand the amount of space the household requires. With \njust one earner and the need for more bedrooms to \naccommodate children, single-parent renter house­\nholds had the highest cost-burden rate in 2022 at 62 \npercent. Because so many renter households consist \nof just one individual, single-person households \naccounted for nearly half of all cost-burdened renters. \nDespite the need for less space, 58 percent of single-\nperson households were cost burdened. Meanwhile, \na third of renters who were married without kids were \nburdened by housing costs, making this household \ntype most likely to live in affordable housing.\nAffordability Is Worsening Across \nthe Country\nGiven the enormous number of renters struggling to \nafford housing, it is perhaps unsurprising that cost-\nburden rates are high across the country (Figure 24). \nIn some places, this is due to high rents. In others, \nit is a function of low incomes. For example, in the \nMidwest and the South, where median rents are \nlowest, cost-burden rates are still 46 percent and 50 \npercent, respectively, because median incomes are \nalso lower. Though renters in the Northeast and West \nhave higher median incomes, the cost-burden rates \nin these regions are similarly elevated at 50 and 52 \npercent because of high housing costs.\nShare of Renters with \nCost Burdens (Percent)\n37.0–39.9\n40.0-44.9\n45.0-49.9\n50.0–57.9\nNotes: Cost-burdened households spend \nmore than 30% of income on rent and \nutilities. Households with zero or negative \nincome are assumed to be burdened, while \nhouseholds that are not required to pay rent \nare assumed to be unburdened. \nSource: JCHS tabulations of US Census \nBureau, 2022 American Community Survey \n1-Year Estimates.\nFigure 24\nMore Than a Third of Renters Are Cost Burdened in Every State in the Country\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n37\n\n\n--- Page 40 ---\nThese same patterns emerge when cost burdens \nare examined by state. For instance, the cost-burden \nrate was 51 percent in both Louisiana and New Jersey \nin 2022, despite the states’ vastly different median \nincomes and rents. Florida, Hawaii, and Nevada \ntopped the list of the most unaffordable states, with \ncost-burden rates exceeding 55 percent. But, notably, \neven in the most affordable states, more than a third \nof renter households were cost burdened, and afford­\nability has worsened in all but seven states since the \nstart of the pandemic. \nThough renters are cost burdened in all types of \ncommunities across the country, shares are highest \nin the largest metros, where rents tend to be higher. \nMore than half (51 percent) of renter households living \nin the 56 metros with populations over 1 million were \nburdened by housing costs in 2022, with the highest \nrates in Miami, Honolulu, and Orlando. Since 2019, cost-\nburden rates in large metros have risen 3.5 percentage \npoints, increasing in all but one of the 56 large metros. \nConversely, places with smaller populations are rela­\ntively more affordable. Just under half of renters (49 \npercent) in midsize metros with populations between a \nquarter million and 1 million were cost burdened in 2022. \nIn these geographies, cost-burden rates increased by \n2.9 percentage points since the start of the pandemic. \nThe cost-burden share was slightly lower (45 percent) \nin small metros with populations under 250,000, where \nrates have risen by 2.6 percentage points during the \nsame period. Rural areas were the most affordable, \nwith 40 percent of renter households experiencing \ncost burdens, a 1.7 percentage point increase over \npre-pandemic levels. \nAlarmingly, most lower-income renter households \nstruggle to find housing they can afford in any commu­\nnity. Renters with the lowest incomes—those in the \nbottom fifth of the income distribution for a given \nmetropolitan area or for a state’s rural areas—expe­\nrience high cost-burden rates even in less expen­\nsive areas. In rural communities where cost-burden \nrates were lowest, 72 percent of these households \nwere burdened, with nearly half experiencing severe \nburdens. The share of lowest-income renters strug­\ngling with cost burdens increased with population size, \nreaching 86 percent in large metros. \nAffordable Supply Is Scarce\nA significant driver of the record-high cost-burden \nlevels is the large and increasing dearth of rental units \naffordable to households with the lowest incomes. \nAccording to HUD’s Worst Case Housing Needs: 2023 \nReport to Congress, there are 61 affordable units for \nevery 100 renter households that earn no more than \n30 percent of area median income. Of these units, \n40 percent were occupied by a household with an \nannual income above 30 percent of the area median, \nreducing the number of units available and afford­\nable to the most financially vulnerable to just 36 per \n100 households. \nNationally, the severe shortage of units both afford­\nable and available to households with extremely low \nincomes has only worsened over the last two decades. \nFrom 2001 to 2021, the number of extremely low-in­\ncome households increased by 3.6 million. Yet the \nrelevant supply rose by just 677,000 units during the \nsame period. As a result, the total shortfall in units \naffordable and available to these households rose \nfrom 4.9 million in 2001 to a record-high 7.8 million units \nby 2021. The pandemic further accelerated unit losses \nas the number of extremely low-income households \nclimbed, raising the total deficit by 823,000 units in \njust two years.\nThe affordable supply shortage is largest in central \ncities and high-density suburbs. In 2021, just 35 units \nin central cities and 30 units in high-density suburbs \nwere affordable and available for every 100 renters \nwith extremely low incomes. Low-density suburbs \nwere only slightly more affordable, with 43 units per 100 \nextremely low-income renter households. In contrast, \nrural communities had 54 units available for every \n100 renter households with extremely low incomes. \nHowever, the larger supply of affordable and avail­\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n38\n\n\n--- Page 41 ---\nable units in rural areas is offset somewhat by higher \nrates of physical inadequacy among rural rental units. \nExcluding inadequate housing, only 44 rentals were \naffordable and available for every 100 rural renters \nwith extremely low incomes.\nRising Housing Costs Are Consuming \nHousehold Incomes\nOver the last two decades, housing cost increases \nhave outpaced income gains for renters, straining \nhousehold balance sheets. Though median rents \nhave risen 21 percent in inflation-adjusted terms since \n2001, median annual income has risen just 2 percent \nduring the same period. Consequently, renters’ median \nresidual income—the amount of money available each \nmonth after paying for rent and utilities—was $2,600 \nin 2022, down 4 percent from 2001.\nRenters with lower incomes have been particularly \nhard-hit by rising housing costs. Residual incomes for \nthose making less than $30,000 dropped to an all-time \nlow of $310 per month in 2022, 47 percent below the \n2001 peak (Figure 25). Among these lower-income \nrenters, those with cost burdens fared even worse, with \na median residual income of just $170. \nThe high cost of rent has also diminished spending \npower for renters making $30,000 to $74,999 annually. \nSuch households had a median residual income of \n$2,700 each month, down 10 percent over two decades. \nIn contrast, residual incomes increased slightly for \nrenters earning at least $75,000 per year, consistent \nwith the nation’s widening income inequality. For these \nhouseholds, the monthly residual income in 2022 was \n$7,500, about a half percent above 2001 levels.\nWhile many higher-income households have been \nable to afford a comfortable standard of living, a large \nshare of renters have not. According to the Economic \nPolicy Institute, a single-person household in the \nnation’s most affordable counties would still need \nabout $2,000 each month in residual income to cover \n-50\n-40\n-30\n-20\n-10\n0\n10\n2001\n2004\n2007\n2010\n2013\n2016\n2019\n2022\nHousehold Income\n$30,000-$74,999\n$75,000 and Over\nUnder $30,000\nNotes: Household incomes and residual incomes are adjusted \nfor inflation using the CPI-U for All Items. Households that are \nnot required to pay rent are excluded. Data for 2020 are based \non 2019 and 2021 values because of pandemic data disruptions. \nSource: JCHS tabulations of US Census Bureau, American \nCommunity Survey 1-Year Estimates.\nFigure 25\nAfter Paying for Housing, Lower-Income Renters \nHave Less Money Left Over Than Ever Before\nChange in Residual Income Since 2001 (Percent)\nall other needs, an amount that far exceeds what most \nrenters have available after paying for rent and utilities. \nIndeed, 42 percent of renters have less than $2,000 in \nresidual income and, in many cases, much less. \nRapid inflation of both rents and consumer goods and \nservices over the last two years has further stretched \nhousehold budgets. According to the Household Pulse \nSurveys from June to October 2023, 63 percent of renter \nhouseholds reported their rents rose in the past year, \nwith 15 percent reporting increases of at least $250. \nThe vast majority of surveyed households also noticed \nprice increases for other goods in their communities \nin the preceding two months. \nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n39\n\n\n--- Page 42 ---\nThese price increases have been especially hard \non lower-income renters. About two-thirds of renter \nhouseholds earning less than $25,000 reported feeling \nstressed by rent hikes and inflation (Figure 26). Like­\nwise, just over 60 percent of Hispanic and Black house­\nholds were very stressed by inflation, compared to 54 \npercent of white and 41 percent of Asian households. \nAnd having children further compounded the financial \nstrain, with 67 percent of renters with children feeling \nstressed by price increases as compared to 51 percent \nof households without children.\nAgainst this backdrop, many of the most financially \nvulnerable renters have reduced their spending in \nareas critical to well-being. Rent is the largest expense \nfor most households and often takes priority because \nthe consequences of not paying rent could include \neviction and homelessness. Center tabulations of the \nConsumer Expenditure Survey indicate that severely \ncost-burdened renter households in the lowest expen­\nditure quartile (a proxy for low incomes) spent 39 \npercent less on food and 42 percent less on healthcare \nthan their unburdened counterparts in 2022.\n0\n10\n20\n30\n40\n50\n60\n70\nAsian\nWhite\nBlack\nHispanic\n$75,000 and Over\n$50,000-$74,999\n$35,000-$49,999\n$25,000-$34,999\nUnder $25,000\nRace/\nEthnicity\nHousehold\nIncome\nNotes: Black, Asian, and white respondents are non-Hispanic. Hispanic individuals may be of any race. People identifying as another \nrace (including Native American) or multiple races are not shown owing to data limitations. The survey asked, “How stressful, if at all, has \nthe increase in prices in the last two months been for you?” \nSource: JCHS tabulations of US Census Bureau, Household Pulse Surveys, June–October 2023.\nFigure 26\nLower-Income, Hispanic, and Black Renter Households Have Been Hardest Hit by Inflation\nShare of Renter Households Very Stressed by Price Increases (Percent)\nMore recently, the Census Bureau’s Household Pulse \nSurvey illustrates that such trade-offs continued into \n2023, particularly for lower-income households and \nthose that have fallen behind on rent. While almost \ntwo-thirds of renter households making less than \n$25,000 reported difficulty paying for their usual \nexpenses, the share rose to 82 percent for households \nin this income bracket who were behind on rent.\nRenters may make other trade-offs, too. For example, \nin an effort to reduce housing costs, a household might \nrelocate to an older or substandard unit. Such units \ntend to have lower rents, but they are also more likely \nto present significant risks to tenant health and safety. \nRenters may also reduce housing costs by opting for \novercrowded living arrangements, longer commutes, \nor neighborhoods that are less safe, have fewer \namenities, or are in lower-performing school districts. \nThese and other such choices may further threaten an \nalready vulnerable household’s well-being, financial \nstability, and economic mobility.\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n40\n\n\n--- Page 43 ---\nThe Outlook\nThe pandemic propelled the housing affordability \ncrisis to new heights, making it an urgent priority for \ncommunities across the nation. While the influx of new \nsupply at the high end of the market will provide some \nrelief for the rising ranks of cost-burdened renters in \nthe middle and higher income brackets, little respite is \nlikely for those with lower incomes. Construction costs \nand market dynamics make it difficult to build new \nunits at lower and moderate rent levels, increasing \nthe need to preserve and repair the existing stock of \naffordable rental housing. \nHouseholds with lower incomes especially will continue \nto struggle to find affordable homes anywhere in the \ncountry, let alone in neighborhoods with high-quality \namenities and services. Absent increased afford­\nable housing production and subsidies or additional \nincome supports, more renters—especially those with \nlower incomes—will strain to make ends meet, as so \nmany already are. \nRecord-high cost \nburdens are forcing \ntrade-offs for lower-\nincome renters.\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n41\n\n\n--- Page 44 ---\nRENTAL HOUSING \nCHALLENGES\nFederal subsidies fail to meet the large and growing need for affordable housing, and rental assistance programs \nface ongoing challenges. To mitigate the shortfall, some state and local governments have sought to remove \nzoning and regulatory barriers to affordable and multifamily construction. Nevertheless, an increasing number \nof renters are at risk of eviction, and homelessness has hit an all-time high. Climate change–related hazards \nand energy price hikes are creating further precarity for renter households and property owners.\n \nRental Subsidies Fall Short\nRental assistance is a crucial housing support for \nroughly 5 million households that earn no more than \n50 percent of their area median income. The majority \nof those obtaining assistance through Department of \nHousing and Urban Development (HUD) programs are \nolder adults, people with disabilities, and families with \nchildren. Unfortunately, rental assistance programs \nhave not expanded to meet the growing demand. \nInstead, federal funding for housing assistance has \nincreased only modestly and incrementally since the \nmid-1990s, aside from significant one-off appropria­\ntions during the Great Recession and the pandemic. \nBetween 2001 and 2021, the number of renter house­\nholds receiving support increased by just 910,000, \neven as the number of renter households with very \nlow incomes grew by 4.4 million to 19.3 million. Conse­\nquently, the number of income-eligible households \nthat do not receive assistance jumped from 10.7 million \nin 2001 to 14.2 million in 2021, leaving three out of every \nfour eligible households unassisted. \nSimultaneously, cost-burden rates have increased \nfor income-eligible unassisted renter households. As \nrents have risen faster than incomes, the share of these \nhouseholds with severe cost burdens, substandard \nhousing, or both jumped from 47 percent in 2001 to \n60 percent in 2021. This reflects a rise in worst case \nhousing needs from 5.0 million to a record-high 8.5 \nmillion households over two decades. \nSubsidized Stock Requires \nSubstantial Investments\nThough all of the nation’s rental assistance programs \nfall far short of the need, public housing in particular is \nseverely underfunded. Decades of insufficient capital \nand operating funds have left a massive maintenance \nbacklog estimated at $90 billion. The stock’s generally \npoor condition has motivated many public housing \nauthorities to demolish or transition units to other \nfunding streams. As a result, the number of occupied \npublic housing units has declined. In 2022, 835,000 \nhouseholds lived in public housing, down from a peak \nof 1.4 million in 1994 (Figure 27).\nThe Rental Assistance Demonstration (RAD) program, \nwhich converts public housing units to longer-term, \nstable Section 8 contracts, allows housing providers \nto secure other sources of financing to under­\ntake needed maintenance and redevelopment. \n06\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n42\n\n\n--- Page 45 ---\n0.0\n0.5\n1.0\n1.5\n2.0\n2.5\n3.0\n1990\n1994\n1998\n2002\n2006\n2010\n2014\n2018\n2022\nPublic Housing\nHousing Choice Vouchers\nProject-Based Section 8\nLIHTC\nNotes: LIHTC occupancy is based on the 98.6% rate reported by \nNovogradac in 2021. LIHTC units include low-income units only. \nSources: JCHS tabulations of HUD, Picture of Subsidized \nHouseholds and Low-Income Housing Tax Credit Database; \nRobert Collinson, Ingrid Gould Ellen, and Jens Ludwig, Low-Income \nHousing Policy, NBER Working Paper, 2015.\nFigure 27\nLIHTC and Vouchers Have Become the Largest \nRental Assistance Programs\nOccupied Units (Millions)\nUnder RAD, 226,000 units have converted to Section 8 \nunits to date, boosting the number of project-based \nSection 8 households to 1.2 million in 2022. \nA recent extension of RAD offers public housing author­\nities the first real opportunity to develop new public \nhousing units since the Faircloth Amendment capped \nthe public housing stock at 1999 levels. With the demo­\nlition of hundreds of thousands of units since then, \nmany places operate below their allowable maximum \nbut do not have the capital to support new units. Fair­\ncloth-to-RAD helps address this financing hurdle, \nproviding housing authorities with the opportunity to \nadd nearly 220,000 units back to the stock through \nHUD’s mixed-finance program, with the knowledge \nthat the units will convert to longer Section 8 contracts.\nFaircloth-to-RAD holds promise for expanding the \nsubsidized stock. Still, most new construction, rehabili­\ntation, and acquisition projects are currently financed \nthrough the Low-Income Housing Tax Credit (LIHTC) \nprogram. Since the program’s creation in 1986, LIHTC \nhas supported the development and preservation of \nmore than 3.6 million low-income units. While LIHTC \nis an important source of quality affordable housing \nin many communities, developers are permitted to \nflip these units to market rate after the conclusion \nof the affordability period, typically at least 30 years. \nMore than 325,000 units are set to expire between \n2024 and 2029 alone. Additionally, at least 7,000 units \nare prematurely lost each year through the qualified \ncontracts process, which permits property owners to \nopt out of the program after 15 years. \nFurther, LIHTC does not necessarily protect a renter \nfrom cost burdens. Because rents are capped based \non the income designation of the unit, tenants who \nmake less than that maximum may find themselves \nin an unaffordable unit. For some renters with lower \nincomes, Housing Choice Vouchers can help make \nup a portion of the difference. \nHousing Choice Vouchers have been the dominant \nHUD subsidy for the last 25 years, assisting 2.3 million \nrenter households in 2022. However, voucher holders \nmay struggle to secure a unit priced within their area’s \nfair market rent. Vouchers also do not guarantee an \naffordable apartment. Indeed, 26 percent of voucher \nrecipients were cost burdened despite receiving assis­\ntance. This is likely because renters can select housing \nthat costs more than the program limit as long as they \npay for the difference out of pocket. \nMoreover, Housing Choice Vouchers rely on the private \nmarket and landlord participation. Yet many property \nowners find the program’s inspections and require­\nments too burdensome to merit their involvement. \nGiven these challenges, about 40 percent of voucher \nholders are unable to secure an appropriate unit in \nthe allotted time. To address these obstacles, HUD \nannounced in 2023 that the agency will pilot a direct-\nto-tenant assistance program.\nThough HUD programs serve rural areas, multifamily \nsubsidies from the US Department of Agriculture \n(USDA) play an important role in these communities. \nUSDA’s Section 515 Rural Rental Housing program offers \nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n43\n\n\n--- Page 46 ---\nlow-interest mortgages for multifamily housing and \nrequires that rents in these units remain affordable \nover the 30-year loan period. Currently, Section 515 \nserves 378,000 renter households in rural areas with \nlimited rental supply. However, this stock is dwindling. \nThe program has not financed new housing in recent \nyears, and most of the existing loans are nearing matu­\nrity. Loan prepayments also threaten the stock. Nearly \n22,000 units exited the program between 2016 and 2021, \naccording to the Housing Assistance Council.\nState and Local Governments Step \nUp Efforts\nLimited federal rental assistance has prompted many \nstate and local governments to find solutions to the \naffordability crisis. Increasingly, states and localities \nrely on multifamily housing bonds to finance afford­\nable housing, often pairing tax-exempt bond revenue \nwith LIHTC financing. Multifamily private activity bond \nissuances rose from $2.4 billion in 2010 to a record $17.2 \nbillion in 2020 (Figure 28). On a smaller scale, more \nthan 800 state and local housing trust funds generated \nalmost $3 billion annually to fund affordable housing.\nIn addition to raising their own revenues, state and local \ngovernments manage federal resources for affordable \nhousing. Since 2016, the National Housing Trust Fund \nhas provided states with flexible funding ranging from \n$173 million to nearly $740 million annually. American \nRescue Plan state and local fiscal recovery funds have \nalso been a recent boon to affordable housing efforts. \nState and local governments budgeted $17.7 billion of \nthese funds through June 2023 to support about 2,800 \naffordable housing projects and programs nationwide. \nSome cities are finding ways to take units out of the \nprivate market for longer-term affordability, including \nshared and public ownership models. According to \na 2022 survey by the Grounded Solutions Network, \ncommunity land trusts hold nearly 20,000 rental \nunits nationwide. Growing momentum for publicly or \ncommunity-owned permanently affordable housing \nhas also spurred calls for social housing plans in Cali­\nfornia and Rhode Island, as well as in New York City, \nLos Angeles, San Francisco, Kansas City, Seattle, and \nWashington, DC. \nAt the same time, a growing tenant movement has \nprompted rent regulation legislation. In 2019, Oregon \npassed the first statewide rent stabilization bill, limiting \nannual rent increases to 7 percent plus inflation. Cali­\nfornia enacted similar legislation shortly thereafter. At \nthe local level, Saint Paul recently implemented rent \nstabilization measures. \nHowever, other state and local legislative efforts to limit \nrent increases have failed, in part because striking a \nbalance between the priorities of renters and property \nowners proved difficult. While renters seek protection \nfrom rapid rent hikes, landlords are concerned about \nlimits on rent increases that can make it more difficult \nto cover growing expenses. There is also the risk that \ndevelopers may steer clear of jurisdictions with rent \ncontrol, creating longer-term supply challenges.\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n44\n0\n2\n4\n6\n8\n10\n12\n14\n16\n18\n2005\n2007\n2009\n2011\n2013\n2015\n2017\n2019\nNote: Multifamily private activity bonds are issued by state and  \nlocal authorities.\nSource: Council of Development Finance Agencies.\nFigure 28\nMultifamily Bond Issuances Jumped in the  \nLast Decade\nMultifamily Bond Issuances (Billions of Dollars)\n\n\n--- Page 47 ---\nBarriers to New Construction \nAre Falling\nReducing the barriers to multifamily housing construc­\ntion can improve affordability and increase rental \noptions. Nationwide, an estimated 75 percent of land \nin major cities is zoned exclusively for single-family \nhomes. By limiting diverse housing types, commu­\nnities effectively exclude renters. Amending zoning \nlaws does not guarantee that new units will be built \nor will be affordable to renters with lower incomes, but \nit removes a significant barrier to such possibilities.\nSuch zoning reforms are gaining popularity, with recent \nefforts at all levels of government. The 2023 federal \nomnibus spending bill included $85 million for new “Yes \nIn My Back Yard” grants to encourage state and local \ngovernments to identify and address exclusionary \nzoning and land use policies. The program follows \nWashington’s model of incentivizing communities to \ncarefully examine restrictive zoning. There, the initiative \nsupported several cities in changing their land use \npolicies to allow duplexes, triplexes, and accessory \ndwelling units in formerly single-family districts.\nAlso, a growing list of states are preempting local \nsingle-family zoning laws to compel more neighbor­\nhoods to allow a range of housing options. In 2023 \nalone, Montana, Vermont, and Washington passed \nlegislation requiring local communities to loosen \nzoning laws to allow modest-sized multifamily build­\nings. These changes came on the heels of sweeping \nzoning reforms in California, Maine, and Oregon that \nsimilarly opened single-family-only zones to different \ntypes of housing. And in Massachusetts, recent legis­\nlation mandated that the 177 jurisdictions served by \npublic transit must designate at least one zone to allow \nmultifamily buildings and higher densities without \nspecial approvals.\nAt the local level, cities are also eyeing zoning reforms \nto enable more supply and improve affordability over \nthe longer term. In 2020, Cambridge, Massachu­\nsetts, adopted an innovative 100 percent affordable \nhousing overlay, allowing affordable development \nAbout 75 percent of \nland in major cities is \nzoned exclusively for \nsingle-family homes.\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n45\n\n\n--- Page 48 ---\nprojects by right and at greater heights and densities. \nCambridge is also among the cities—including Ann \nArbor and Cincinnati—that recently removed some or \nall parking requirements in an effort to reduce the cost \nof construction and, in turn, rents in new developments. \nEvictions Have Returned to \nPre-Pandemic Levels\nThe protections and supports that kept households in \ntheir homes through the first years of the pandemic \neither have ended or are nearing depletion. Emergency \nRental Assistance (ERA) and federal, state, and local \neviction moratoriums—as well as property owners \nwho gave renters additional leniency—helped keep \nvulnerable renters housed, reducing eviction cases \nby an estimated 58 percent through the end of 2021, \naccording to the Eviction Lab. \nERA has been a particularly critical program, making \nmore than 10.8 million payments to renters at risk of \neviction and, in doing so, making their landlords whole. \nWhile some ERA funds have spending timelines that \nextend through 2025, most of the money has already \nbeen disbursed. As of mid-October 2023, about $6.5 \nbillion remained of the $46.55 billion in authorized \nassistance, and programs in most states were closed. \nYet renters continue to face financial stressors. In the \nmiddle of 2023, 12 percent of all renter households were \nbehind on rent despite low unemployment and the \nbroader economic recovery, with even higher rates \nfor lower-income households (18 percent) and those \nheaded by a Black person (21 percent) or an Asian \nperson (17 percent). With significant shares of renters \nstill at risk as ERA and other critical protections wind \ndown, eviction filings approached pre-pandemic levels \nat the end of 2022 and remained elevated through the \nfirst half of 2023 (Figure 29). \nStill, some renters are benefitting from ongoing efforts \nto keep tenants housed. At the federal level, HUD’s \nEviction Protection Grant Program has offered funding \nto a limited number of governments and nonprofits \nthat provide or connect renters with legal services. \nStates and localities are also working to pass right-to-\ncounsel legislation for renters facing eviction. Jurisdic­\ntions in 17 states had some form of right to counsel as \nof mid-2023, with 3 states and 12 local governments \nenacting such programs since 2021. State, county, and \nlocal governments are also continuing their emer­\ngency rental assistance programs, with about half \nof ERA administrators surveyed by the National Low \nIncome Housing Coalition reporting that they plan to \nkeep running these programs beyond the end of the \nUS Department of the Treasury’s ERA funds. \n0\n20\n40\n60\n80\n100\n120\n2021\n2022\n2023\n2020\nNotes: Data include eviction filings in the 10 states and 18 cities \nthat had complete data through the end of June 2023. Rates are \nrelative to a pre-pandemic average baseline.\nSource: JCHS tabulations of Eviction Lab, Eviction Tracking System.\nFigure 29\nEviction Filings Returned to Pre-Pandemic Levels \nAfter Relief Measures Expired\nEviction Filings Relative to Pre-Pandemic Average (Percent)\nHomelessness Reaches an \nAll-Time High\nAs evictions and housing costs have risen, so has \nhomelessness. In 2023, a record-setting 653,100 \npeople in the US were unhoused on a given night in \nJanuary. During the early years of the pandemic, evic­\ntion prevention efforts, emergency rental assistance \nprograms, and temporary income supports minimized \nthe rise in homelessness. However, many of these \nprotections ended in 2022 as rents rose rapidly and \nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n46\n\n\n--- Page 49 ---\namid an influx of migrants prohibited from working. \nConsequently, the number of unhoused people rose \nby nearly 71,000 in just one year.\nThe most recent increase reflects a significant growth \nin both sheltered and unsheltered homelessness. \nBetween January 2022 and 2023, the number of people \nstaying in shelters rose by 47,860 to 396,490. Mean­\nwhile, an increase of 22,780 people staying in places \nnot intended for human habitation drove the popu­\nlation experiencing unsheltered homelessness to an \nall-time high of 256,610. \nRising unsheltered homelessness continues a longer-\nterm trend. Since 2015, this population has grown \nnationally by more than 83,000 people (48 percent). \nWhile states across the country have seen their unshel­\ntered populations increase, the growth has been \nhighest in the West, where housing costs have risen \nrapidly and shelter resources were already strained. \nIn California alone, 123,420 people are experiencing \nunsheltered homelessness, amounting to 48 percent \nof the national unsheltered population. Even states \ntraditionally considered more affordable, like Arizona, \nOhio, Tennessee, and Texas, have experienced rising \nunsheltered homelessness since 2015 (Figure 30).\nSeveral populations are vulnerable to homeless­\nness. Widespread discrimination against Black and \nHispanic people creates inequities in household \nfinances, housing opportunities, and evictions. As a \nresult, Black people are 37 percent of all unhoused \npeople but just 13 percent of the US population, while \nHispanic people are more than a quarter (28 percent) \nof people experiencing homelessness but less than \n20 percent of the population. In addition to discrimi­\nnation, Native Americans and Indigenous people face \nunique housing challenges that also leave a dispro­\nportionate share homeless. \nDecrease (Up to 1,535)\n1–500 Increase\n501–1,000 Increase\n1,001–50,000 Increase\nChange in Unsheltered Homelessness,\n2015–2023 (People)\nSource: JCHS tabulations of US \nDepartment of Housing and \nUrban Development, Annual \nHomeless Assessment Report \nPoint-in-Time Estimates.\nFigure 30 \nUnsheltered Homelessness Has Risen in Most States\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n47\n\n\n--- Page 50 ---\nIn response to the increase in homelessness, the \ncurrent administration has offered federal agencies \nadditional in resources. Through its Continuum of Care \nprogram, HUD made available a record-setting $3.1 \nbillion in competitive grants in 2023 for homelessness \nresponse efforts. The 2021 American Rescue Plan Act \nalso included $5 billion for homelessness services, \nshelters, and housing through the HOME-ARP program \nand 70,000 Emergency Housing Vouchers for people \nexperiencing or at risk of homelessness. Still, a much \ngreater investment by the federal government in \naffordable housing and rental assistance is imper­\native to prevent further increases in homelessness, \nrehouse people at scale, and reduce the costs of \nhomelessness responses.\nState and local governments have filled some gaps \nby using flexible pandemic funding to serve unhoused \npeople. More than $3.8 billion of state and local fiscal \nrecovery monies have been earmarked for home­\nlessness services and housing. However, some states, \nincluding Missouri and Tennessee, are responding \nto heightened homelessness by passing laws that \nrestrict encampments or criminalize sleeping on \npublic property. Such policies are harmful to people \nexperiencing homelessness, divert resources from \nsupporting unhoused people, and do not address \nthe underlying housing affordability issues that push \npeople into homelessness.\nRental Stock Urgently Requires \nEnergy Upgrades\nExtreme weather variability and rising temperatures \ncaused by climate change are expected to increase \nhome energy demand and, in turn, renters’ housing \ncosts. About half of renters making less than $30,000 \n(8.4 million households) experienced energy insecu­\nrity in 2020 (Figure 31). The Low Income Home Energy \nAssistance Program offset costs for more than 6 million \nrenter and homeowner households in 2022 but none­\ntheless was unable to fully address the need.\nEnergy-Insecure Households\nShare Facing Energy Insecurity (Right Scale)\n0\n10\n20\n30\n40\n50\n60\n0\n1\n2\n3\n4\n5\n6\nUnder\n$15,000\n$15,000-\n$29,999\n$30,000-\n$44,999\n$45,000-\n$74,999\n$75,000\nand Over\nNote: Households that are energy insecure have forgone basic \nnecessities, maintained an unhealthy temperature inside their \nhome, or received a disconnection notice.\nSource: US Energy Information Administration, 2020 Residential \nEnergy Consumption Survey.\nFigure 31\nMillions of Renters Are Energy Insecure\nRenter Households \n(Millions)\nShare Facing Energy \nInsecurity (Percent)\nDespite improvements in construction techniques and \nretrofits, the rental housing stock still has efficiency \nand electrification needs. While renters use less energy \nthan homeowners on a per household basis, rentals \naccount for greater energy use per square foot than \nowner-occupied homes, according to the Residential \nEnergy Consumption Survey. Older rental homes, in \nparticular, use more energy than newer homes and \nhave considerable efficiency, renewable energy instal­\nlation, and electrification needs. \nNew federal resources will help address the need for \nenergy efficiency by providing funding to encourage \ntenants and property owners to make select improve­\nments. The Weatherization Assistance Program, for \nexample, received a one-time $3.5 billion infusion \nthrough the Infrastructure Investment and Jobs Act \nto help homeowners—and likely a modest number \nof renter households—fund approved upgrades. The \nInflation Reduction Act also granted renters and rental \nproperty owners $8.8 billion in household rebates and \nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n48\n\n\n--- Page 51 ---\ntax credits, expanded home energy tax credits, and \nprovided an additional $1 billion for energy and water \nefficiency improvements in HUD-assisted housing. \nSimilarly, states are making financial resources avail­\nable for multifamily retrofits. The new Massachusetts \nCommunity Climate Bank, the nation’s first “green \nbank” focused exclusively on affordable housing, will \nlend an initial $50 million in state funds to leverage \nadditional federal and private resources and promote \nefficiency improvements. And in response to a deadly \nheat wave in 2021, Oregon created a $15 million grant \nand rebate program for landlords who install heat \npumps as energy-efficient alternatives to air condi­\ntioners and furnaces. \nClimate Change Threatens Renters \nand Their Homes\nImproving the rental stock’s climate resiliency is \nanother urgent priority. The frequency and severity of \nhazards related to climate change leave an increasing \nnumber of renter households at risk of hurricanes, \nwildfires, floods, and other extreme climate-related \nevents. Disasters also carry longer-term risks to renters. \nBoth evictions and rents increase in the year after a \nclimate-related disaster, and recovery assistance for \nrenters is dramatically lower than homeowner aid and \ntakes longer to receive. \nRising insurance premiums and the increasingly \nfrequent withdrawal by insurers from high-risk markets \nare making property insurance more expensive. Yet \neven as insurance costs are growing, coverage has \ndecreased. Nearly two-thirds of firms surveyed in 2023 \nby the National Multifamily Housing Council reported \nthat they had to increase their deductibles, and about \na third noted that their insurance carrier had limited \nor reduced coverage amounts. These rising costs \nthreaten the financial solvency of existing properties \nand can constrain the financing of new construc­\ntion, especially for affordable housing providers. \nRenters are also affected by the shifting insurance \nmarkets. Just over half have a general renters insur­\nance policy. But most of these policies do not include \nseparate flood coverage. \nWith gaps in insurance, federal resources are crucial in \nhelping renter households and communities with relief \nand recovery after disasters. The Federal Emergency \nManagement Agency’s Individuals and Households \nProgram has provided $4.5 billion directly to 1.4 million \nrenter households since 2020. Additionally, $10 billion \nof Community Development Block Grant Disaster \nRecovery funds assisted communities affected by \ndisasters between 2020 and 2022. State and local \ngrantees can use these monies to rebuild multifamily \nhousing and cover rent payments. Still, they typically \nput most of their funds toward supporting individual \nhomeowners, leaving unaddressed the assistance \nthat rental property owners may need to bring units \nback online. \nGreater investment in pre-disaster upgrades for the \nexisting rental stock is also critical to protecting the \nalready dwindling supply of affordable homes. At \nthe federal level, the new Green and Resilient Retrofit \nProgram will enable HUD-supported providers to rein­\nvest in their housing, making the units more resilient \nto extreme weather events while improving energy \nefficiency. Locally, efforts such as the Washington, DC, \nResilience and Solar Assessment tool will help owners \nof affordable multifamily properties identify adapta­\ntion improvements and potential funding sources to \npay for them. \nUltimately, increasing assistance for pre-disaster \nretrofits, supporting affordable housing providers with \ninsurance costs, and investing in regional coordinated \nplanning are critical to ensuring rental homes and \noperators are equipped to meet the challenges of \nclimate change while preserving affordability.\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n49\n\n\n--- Page 52 ---\nThe Outlook\nThough the affordability challenge is not new, it has \nnoticeably worsened in recent years. Before the \npandemic, housing cost burdens swiftly climbed \nthe income scale, especially in high-cost markets, \nwhile households with lower incomes grappled with \npersistently high burdens. The pandemic signifi­\ncantly exacerbated these problems as rents surged \nat unprecedented rates, leaving record numbers of \nrenters struggling to afford housing and other basic \nneeds. Against this backdrop and with the sunsetting \nof pandemic-era supports for renters, evictions have \nrisen and more people are experiencing homelessness \nthan ever before. \nAs a growing number of middle-income households \nstruggle with increasingly unaffordable housing, the \ncrisis is receiving more attention. State and local \ngovernments are seeking to reduce barriers to building \nhousing that is more affordable and located in desir­\nable neighborhoods. Such actions include reforming \nzoning laws to allow for a greater variety of housing \ntypes. While this work is crucial, state and local govern­\nments cannot tackle the affordability crisis alone. \nIndustry must continue to innovate less costly ways to \nbuild homes. If successful and achieved at the needed \nscale, these efforts could address the affordability \nchallenges facing middle-income renters. \nEven so, a gaping divide persists between what \nlower-income households can afford and the cost \nof building and operating rental housing. The need to \nexpand housing subsidies remains a pressing priority. \nOver the last few decades, rental assistance has failed \nto keep up with the growing number of income-eligible \nrenters. The number of unassisted renters is now at \nan all-time high, forcing households to make painful \nchoices that may include forgoing basic needs in favor \nof housing. To meaningfully shrink the affordability \ngap, all levels of government, as well as the private \nsector, must increase their commitment to assisting \nhouseholds and use every available tool. \nThere is also an increasingly urgent need to address \nchallenges at the intersection of housing and climate \nchange. Necessary actions include mitigating the \nhousing sector’s contribution to greenhouse gas emis­\nsions and adapting policies and practices to better \nhelp households recover from increasingly frequent \nclimate-related hazards. Likewise, the existing and \nfuture stock must be able to meet the needs of the \nnation’s rapidly aging population. \nProperty owners’ willingness and ability to make these \nsorts of crucial investments may be hampered by high \ncosts, and many upgrades may only be possible with \nsubsidies. Recently, federal programs have expanded \nfunding for energy-efficiency investments, with an \neye toward ensuring that rental properties and lower-\nincome communities benefit from these resources. \nImportantly, while the scope of needed investments \nis substantial, so is the cost of inaction. The instability \ncaused by a lack of affordable housing bleeds over to \nother public spending, threatening the well-being of \nmillions of people. Pandemic-era emergency housing \nprograms demonstrated the value of supporting \nstable housing while showing that we can muster the \npolitical will for these efforts. With housing challenges \ngrowing ever more severe, now is the time to make a \nfuller commitment to ensuring that all people living \nin the US have a decent, safe, and affordable place \nto call home. \n\t\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n50\n\n\n--- Page 53 ---\nADDITIONAL\nRESOURCES\nThe following interactive figures and data tables are a sample of \nthe additional resources available at www.jchs.harvard.edu.\nInteractive Maps and Data\nShare of Cost-Burdened Renters by Metro Area: 2022\nChanges in Cost-Burdened Rates by Income by State: 2001–2022\nNumber of People Experiencing Homelessness by State: 2007–2023\nDecline in Low-Rent Units by State: 2012–2022\nData Tables\nBasic Rental Housing Facts by State and Metro Area: 2022\nCharacteristics of Renter Households by State and Metro Area: 2022\nRentership Rates by State and Metro Area: 2022\nNumber and Share of Cost-Burdened Renters by State: 2001–2022\nNumber of Rental Units by Monthly Contract Rent by State: 2012–2022\n07\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n51\n\n\n--- Page 54 ---\nTable A-1\nCharacteristics of Renter Households: 2010–2022\nRenter Households (Thousands)\nPercent Change\n2010\n2019\n2022\n2010–2022\n2019–2022\nAll Renter Households\nTotal\n39,620\n44,012\n45,123\n14\n3\nAge of Householder\nUnder 35\n14,591\n15,159\n16,009\n10\n6\n35–44\n8,098\n8,776\n8,869\n10\n1\n45–54\n6,965\n6,840\n6,630\n-5\n-3\n55–64\n4,630\n6,014\n5,966\n29\n-1\n65 and Over\n5,336\n7,222\n7,650\n43\n6\nHousehold Income\nUnder $15,000\n7,132\n6,853\n7,529\n6\n10\n$15,000–$29,999\n8,072\n7,384\n7,068\n-12\n-4\n$30,000–$44,999\n6,387\n6,313\n6,926\n8\n10\n$45,000-$74,999\n8,603\n9,953\n10,076\n17\n1\n$75,000 and Over\n9,425\n13,508\n13,524\n43\n0\nHousing Cost Burdens\nNot Burdened\n19,736 \n23,623\n22,763\n15\n-4\nModerately Burdened\n9,075\n9,870\n10,292 \n13\n4\nSeverely Burdened\n10,809\n10,518\n12,068\n12\n15\nEducational Attainment of Householder\nNo High School Diploma\n6,978\n5,960\n5,518\n-21\n-7\nHigh School Diploma or GED\n10,834\n11,652\n11,829\n9\n2\nSome College\n12,952\n13,940\n13,929\n8\n0\nBachelor’s Degree\n5,960\n8,119\n8,988\n51\n11\nGraduate/Professional Degree\n2,894\n4,341\n4,859\n68\n12\nHousehold Type\nMarried, Without Children\n4,773\n5,838\n5,909\n24\n1\nMarried, with Children\n5,582\n5,633\n5,116\n-8\n-9\nSingle Parent\n6,999\n6,593\n6,349\n-9\n-4\nOther Family\n3,445\n4,110\n4,333\n26\n5\nSingle Person\n14,682\n16,811\n17,975\n22\n7\nOther Nonfamily\n4,138\n5,026\n5,442\n32\n8\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n52\nNotes: Household incomes are adjusted for inflation using the CPI-U for All Items. Moderately (severely) cost-burdened households \nspend 30–50% (more than 50%) of income on rent and utilities. Households with zero or negative income are assumed to be burdened, \nwhile households that are not required to pay rent are assumed to be unburdened.\nSource: JCHS tabulations of US Census Bureau, American Community Survey 1-Year Estimates.\n\n\n--- Page 55 ---\nAmerica’s Rental Housing 2024 was prepared by the Joint Center for Housing Studies of Harvard University. The Center \nstrives to improve equitable access to decent, affordable homes in thriving communities. We conduct rigorous research \nto advance policy and practice, and we bring together diverse stakeholders to spark new ideas for addressing housing \nchallenges. Through teaching and fellowships, we mentor and inspire the next generation of housing leaders.\nSTAFF\nWhitney Airgood-Obrycki \nCorinna Anderson \nJean Barrett \nPatricia Bravo Morales \nJames Chaknis \nKerry Donahue \nRiordan Frost \nChris Herbert \nAlexander Hermann \nAlexander von Hoffman \nMary Lancaster \nDavid Luberoff \nMagda Maaoui \nCarlos Martín \nDaniel McCue \nJennifer Molinsky \nSamara Scheckler\nSophia Wedeen \nPeyton Whitney \nAbbe Will \nJuanne Zhao\nSTUDENTS\nNora Cahill\nSophie Huang\nEtta Madete\nAditya Mukundan\nOlivia Novick\nAbby Yoon\nFELLOWS & ADVISORS\nBarbara Alexander \nFrank Anton \nDaniel Fulton \nJoe Hanauer \nNicolas Retsinas \nMark Richardson\nEDITOR\nLoren Berlin \nDESIGN\nPixels 360\nFOR ADDITIONAL COPIES, PLEASE CONTACT\nJoint Center for Housing Studies of Harvard University\n1 Bow Street, Suite 400 | Cambridge, MA 02138\nwww.jchs.harvard.edu | Twitter (X): @Harvard_JCHS\n\n\n--- Page 56 ---",
    "chunks": [
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        "text": "--- Page 1 ---\n20\n24\nAMERICA’S\nRENTAL HOUSING \nJOINT CENTER FOR HOUSING\nSTUDIES OF HARVARD UNIVERSITY \n\n\n\n--- Page 2 ---\nAMERICA’S RENTAL HOUSING 2024 \nJoint Center for Housing Studies of Harvard University\nHarvard Graduate School of Design | Harvard Kennedy School\nTABLE OF CONTENTS\n1.\t Executive Summary........................................................................................................................................... 1\n2.\t Renter Households.............................................................................................................................................9\n3.\t Rental Housing Stock.......................................................................................................................................17\n4.\t Rental Markets...................................................................................................................................................26\n5.\t Rental Affordability.........................................................................................................................................34\n6.\t \u0007Rental Housing Challenges.......................................................................................................................42\n7.\t \u0007Additional Resources..................................................................................................................................... 51\nONLINE TABLES AND EXHIBITS \nwww.jchs.harvard.edu/americas-rental-housing\nPrincipal funding for this report was provided by Wells Fargo.\n©2024 by the President and Fellows of Harvard College.\nThe opinions expressed in America’s Rental Housing 2024 do not necessarily represent the \nviews of Harvard University or Wells Fargo.\n\n\n\n--- Page 3 ---\nEXECUTIVE \nSUMMARY\nRental markets are finally cooling as a decades-high volume of new supply has come online, outpacing demand. \nNevertheless, more renter households are cost burdened than ever before, and a record number of people \nare experiencing homelessness. Pandemic resources temporarily shored up the housing safety net, but the \nneed for rental assistance remains greater than ever. Additionally, the aging rental stock requires significant \ninvestment to address structural inadequacies, inaccessibility, and climate risks. Making these investments is \nchallenging, given the current market environment of increasing operating expenses and high interest rates. \nDespite today’s difficult conditions, strong demand from the Gen Z, millennial, and baby boom generations \nshould ensure that the rental market slowdown is short lived.\nRental Markets Are Softening\nRental markets are rapidly cooling after a period \nof significant overheating. Rent growth has almost \ncompletely stopped, following historically high rent \nincreases in both 2021 and 2022. In the third quarter \nof 2023, rent growth plummeted for professionally \nmanaged apartments to just 0.4 percent, down from \n15.3 percent in early 2022, according to RealPage \n(Figure 1). While rents slowly rose across property \nclasses, the pace of growth was under 1 percent in \nthe third quarter of 2023 for lower- and higher-quality \napartments alike.\nThis abrupt deceleration was geographically wide­\nspread, with rents even falling in some markets. In the \nthird quarter of 2023, rents for professionally managed \napartments dropped year over year in 32 percent of \nthe 150 markets tracked by RealPage, including many \nin the West. Just 1 percent of markets posted rent \ngrowth of at least 10 percent in the third quarter of \n2023, a sharp turnaround from the previous year when \nrents in half of the markets increased at that rate. While \nthe slowdown is a welcome change for renters, asking \nrents still remain well above pre-pandemic levels.\n-5\n0\n5\n10\n15\n20\nAll Apartments\nClass A\nClass B\nClass C\n2015\n2017\n2019\n2021\n2023\nNotes: Asking rents are for professionally managed apartments \nin buildings with five or more units. Class A (Class C) apartments \nare relatively higher (lower) quality.\nSource: RealPage.\nFigure 1\nApartment Rent Growth Has Stalled\nAnnual Change in Asking Rents (Percent)\n01 \nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n1\n\n\n\n--- Page 4 ---\nSome of the deceleration may be explained by the \nlarge number of new units that have come online and \npushed up vacancy rates. After hitting a pandemic \nlow of 5.6 percent in late 2021, the rental vacancy rate \nwas 6.6 percent in the third quarter of 2023, according \nto the Housing Vacancy Survey. The rise in vacancies \nhas been even more pronounced in the professionally \nmanaged apartment sector. In the third quarter of \n2023, 5.5 percent of these units were vacant, above \npre-pandemic averages and more than double the \nall-time low of 2.5 percent set in early 2022. Vacancy \nrates in this sector rose fastest in the South, reaching \n6.3 percent in the first quarter of 2022.\nSlowing demand has also helped rental markets stabi­\nlize after a tumultuous 18 months. Renter household \ngrowth surged in the second year of the pandemic, \nthen tumbled before returning closer to pre-pandemic \nlevels (Figure 2). In the professionally managed apart­\nment market, growth in demand peaked in the first \nquarter of 2022 with the net addition of more than \n700,000 households year over year before plunging to \na net loss in the fourth quarter. Following modest quar­\nterly increases in demand through the first half of 2023, \nan additional 91,000 new renter households formed in \nthe third quarter, nearing pre-pandemic increases.\nUnaffordability Has Hit an All-Time High\nThough rent growth has recently slowed substan­\ntially, the extended period of rising rents during the \npandemic propelled cost burdens to new heights. \nAt last measure in 2022, a record-high 22.4 million \nrenter households spent more than 30 percent of \ntheir income on rent and utilities. This is an increase \nof 2 million households over three years and entirely \noffsets the modest improvements in cost-burden rates \nrecorded between 2014 and 2019 (Figure 3). Among \ncost-burdened households, 12.1 million had housing \ncosts that consumed more than half of their income, \nan all-time high for severe burdens.\nAs a result, the share of cost-burdened renters rose to \n50 percent, up 3.2 percentage points from 2019. The \nfinancial strain has been felt across the income spec­\ntrum. Since 2019, cost-burden shares have risen the \nmost for middle-income renter households earning \n$30,000 to $44,999 annually (up 2.6 percentage points) \nor $45,000 to $74,999 annually (up 5.4 percentage \npoints). Higher-income households also saw their \nburden rate increase by 2.2 percentage points. House­\nholds earning less than $30,000 annually, a popula­\ntion already grappling with persistently high burdens, \nrecorded a 1.5 percentage point increase.\nThe dwindling supply of low-rent units is only wors­\nening cost burdens. In 2022, just 7.2 million units had \ncontract rents under $600—the maximum amount \naffordable to the 26 percent of renters with annual \nincomes under $24,000. This marks a loss of 2.1 million \nunits since 2012 when adjusting for inflation. The spike \nin asking rents during the pandemic accelerated the \ntrend, with more than half a million low-rent units lost \njust between 2019 and 2022.\nThese losses have contributed to a decades-long \nchallenge for renters: rent increases are outpacing \nincome gains. Median rents have risen nearly continu­\nously since 2001 in inflation-adjusted terms and are 21 \npercent higher as of 2022. Meanwhile, renters’ incomes \nhave risen just 2 percent during the same period.\nAnnual Net Change\n-200\n-100\n0\n100\n200\n300\n400\n500\n600\n700\n800\n2013\n2015\n2017\n2019\n2021\n2023\nNote: Annual net change is the four-quarter rolling total for \nprofessionally managed apartment buildings with five or  \nmore units. \nSource: RealPage.\nFigure 2\nApartment Demand Has Started to Rebound\nChange in Apartment Households (Thousands)\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n2\n\n\n\n--- Page 5 ---\n0\n10\n20\n30\n40\n50\n60\n0\n5\n10\n15\n20\n25\n30\n2001\n2002\n2003 2004 2005 2006 2007 2008 2009 2010\n2011\n2012\n2013\n2014 2015\n2016\n2017\n2018\n2019\n2020 2021\n2022\nSeverely Cost Burdened\nModerately Cost Burdened\nShare with Cost Burdens (Right Scale)\nNotes: Moderately (severely) cost-burdened households spend 30–50% (more than 50%) of income on rent and utilities. Households \nwith zero or negative income are assumed to have burdens, and households that are not required to pay rent are assumed to be \nunburdened. Estimates for 2020 are omitted because of data collection issues experienced during the pandemic. \nSource: JCHS tabulations of US Census Bureau, American Community Survey 1-Year Estimates.\nFigure 3\nThe Number of Cost-Burdened Renters Hit an All-Time High\nNumber of Renter Households (Millions)\t\nShare with Cost Burdens (Percent)\nConsequently, residual incomes—the amount of \nmoney available after paying for rent and utilities to \ncover other needs—have dropped significantly. Those \nwith lower incomes are especially squeezed. Renter \nhouseholds earning less than $30,000 annually had \nan all-time low median residual income of just $310 \nper month in 2022, down 47 percent from 2001 after \nadjusting for inflation. Further, the vast majority of \nthese renters are cost burdened. For this substan­\ntial subset, the median monthly residual income was \njust $170. According to the Economic Policy Institute, \na single-person household in the most affordable \ncounties needs about $2,000 each month to cover \nnonhousing needs.\nSuch tight budgets force financially vulnerable renters \nto make dreadful choices. Center tabulations of the \n2022 Consumer Expenditure Survey indicate that \nseverely cost-burdened renter households in the \nlowest expenditure quartile spent 39 percent less on \nfood and 42 percent less on healthcare than their \nunburdened counterparts. Others may end up living \nin overcrowded or structurally inadequate conditions, \nthreatening their health and well-being.\nA Record Number of People Are \nExperiencing Homelessness\nThough pandemic-era protections and financial \nsupports temporarily reduced eviction filings, these \nresources are largely expired or winding down, and \nhousing instability is once again on the rise. The Eviction \nLab estimated that eviction filings dropped 58 percent \nfrom the start of the pandemic through the end of \n2021, aided in part by federal, state, and local eviction \nmoratoriums and the $46.55 billion Emergency Rental \nAssistance (ERA) program. However, by mid-2023, \nmany states had nearly depleted their ERA funds, and \neviction filings had returned to pre-pandemic levels.\nStill, the pandemic raised awareness of the importance \nof stable housing, and many state and local govern­\nments are building on that momentum. About half of \nthe ERA administrators surveyed by the National Low \nIncome Housing Coalition indicated that they plan to \ncontinue operating their programs after exhausting \ntheir federal allocations. And since 2021, three states \nand 12 local governments have enacted right-to-\ncounsel programs to connect eligible renters at risk \nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n3\n\n\n\n--- Page 6 ---\nof eviction with legal representation. While these efforts \nare helpful, they do not function at the same scale as \nfederal policies and funding sources.\nLike evictions, homelessness has grown as housing \ncosts have increased, hitting an all-time high of 653,100 \npeople in January 2023 (Figure 4). In the first years of \nthe pandemic, renter protections, income supports, \nand housing assistance helped stave off a consid­\nerable rise in homelessness. However, many of these \nprotections ended in 2022, at a time when rents were \nrising rapidly and increasing numbers of migrants \nwere prohibited from working. As a result, the number \nof people experiencing homelessness jumped by \nnearly 71,000 in just one year. Included in this increase \nwere an additional 22,780 people staying in places \nnot intended for human habitation, including on the \nstreets, in cars, or in abandoned buildings. In 2023, the \ntotal number of people experiencing homelessness \nin unsheltered locations reached 256,610, the highest \non record.\nRising unsheltered homelessness is a longer-term \nand geographically widespread trend. The number of \nunhoused people staying outside shelters increased \nby more than 83,000 people (48 percent) between \n2015 and 2023. This population grew quickly in expen­\nsive states like California, Washington, and Oregon, \nwhere shelter resources were already strained, but \nmore affordable states also recorded increases. \nArizona, Ohio, Tennessee, and Texas were among the \nstates with the largest growth in the number of people \nunsheltered as housing costs have risen.\nThe current administration has made additional \nfederal resources available to reduce homeless­\nness and expand support systems. This includes an \nunprecedented $3.1 billion through the US Department \nof Housing and Urban Development’s (HUD’s) existing \nContinuum of Care program. Significant monies have \nlikewise been allocated via the 2021 American Rescue \nPlan (ARP) Act, including the $5 billion HOME-ARP \nprogram for services, shelters, and housing, plus \n70,000 Emergency Housing Vouchers. State and local \ngovernments have also invested more than $3.8 billion \nof their fiscal recovery funds in homelessness services \nand housing. Even so, considerably more affordable \nhousing and rent subsidies will be needed to prevent \nfurther increases in homelessness, to help rehouse \npeople at scale, and to reduce the costs of the home­\nlessness response system.\nTotal\nSheltered\nUnsheltered\n100\n200\n300\n400\n500\n600\n700\n2007\n2009\n2011\n2013\n2015\n2017\n2019\n2021\n2023\nNotes: Because of the pandemic, complete unsheltered counts \nwere unavailable in January 2021 and sheltered counts were \nartificially low, likely because of reduced shelter capacity. Data \nfor 2021 are based on 2020 and 2022 values.\nSource: US Department of Housing and Urban Development, \nAnnual Homeless Assessment Report Point-in-Time Estimates.\nFigure 4\nAfter a Swift Uptick in 2023, a Record Number of \nPeople Are Unhoused\nPeople Experiencing Homelessness (Thousands)\nHoles Are Widening in the Housing \nSafety Net\nRapidly rising rents, combined with wage losses in \nthe early stages of the pandemic, have underscored \nthe inadequacy of the existing housing safety net, \nespecially in times of crisis. Because rental assistance \nprograms are not an entitlement, they only serve one in \nfour income-eligible households. Their reach has been \nfurther constrained by insufficient budget outlays in \nthe face of growing need. Though the number of very \nlow-income renter households grew by 4.4 million \nbetween 2001 and 2021, the number of assisted house­\nholds in this income range increased by just 910,000.\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n4\n\n\n\n--- Page 7 ---\nConsequently, 60 percent of very low-income house­\nholds (8.5 million) who were eligible for but did not \nreceive rental assistance spent more than half of their \nincome on housing or lived in severely inadequate \nhousing conditions—sometimes both. This was a \nsubstantial increase from the 47 percent of unassisted \nhouseholds (5.0 million) with worst case housing needs \nin 2001 (Figure 5).\nThe subsidized stock and rental assistance programs \nthat do exist have vulnerabilities, too. The dwindling \npublic housing supply, home to 835,000 households \nin 2022, has a maintenance backlog estimated at \n$90 billion. To address the huge need for repairs in \nan environment of insufficient capital funding, the \nRental Assistance Demonstration program lets public \nhousing authorities convert their units to longer-term, \nstable Section 8 contracts. More than 225,000 public \nhousing units have been converted to date, enabling \nhousing providers to leverage other funding sources \nfor improvements and redevelopment. Still, many \nmore resources are required to sufficiently address \nthe scope of the needed repairs and improvements \nand preserve this critical stock.\n0\n2\n4\n6\n8\n10\n12\n14\n16\n2001\n2021\nAssisted\nModerate or No Problems\nSevere Problems\nUnassisted:\nNotes: Severe problems include spending more than 50% of income \non rent and utilities or living in severely inadequate housing. \nModerate problems include spending 30–50% of income on rent \nand utilities or living in moderately inadequate housing. \nSource: JCHS tabulations of US Department of Housing and Urban \nDevelopment, Worst Case Housing Needs Reports to Congress.\nFigure 5\nThe Rental Assistance Shortage Continues \nto Worsen\nVery Low-Income Households (Millions)\nThe subsidized supply also faces expiring affordability \nperiods and maturation. The Low-Income Housing Tax \nCredit (LIHTC) has supported more than 3.6 million \nunits since its creation in 1986. These units have a \nminimum 30-year affordability requirement (with \nlonger timelines in some states), after which they can \nflip to market-rate rents. Recent estimates suggest \nthat affordability periods for more than 325,000 units \nare set to expire between 2024 and 2029. Another 7,000 \nunits are lost prematurely each year when owners \nuse the tax code’s qualified contract option to opt out \nafter an initial 15-year period. Likewise, the entire stock \nof Section 515 units managed by the US Department \nof Agriculture (USDA), home to 378,000 renter house­\nholds in rural areas, is facing mortgage maturities that \nthreaten continued affordability.\nHousing Choice Vouchers are another crucial housing \nsubsidy facing challenges. Vouchers assisted 2.3 \nmillion households in 2022, covering the difference \nbetween 30 percent of a household’s income and their \narea’s fair market rent. The subsidy relies on participa­\ntion by private-market landlords, who are not required \nto accept the vouchers in most places. Further, the \nunit inspection and approval processes add time and \ncomplexity that may deter some landlords from partic­\nipating, especially in hot markets where the incentive \nto participate can be lower.\nVoucher holders also struggle with the program. \nThey may not be able to find a landlord who accepts \nvouchers or a suitable apartment that meets the \nprogram’s guidelines. About 40 percent of people \nwho receive a voucher are unable to use the subsidy \nin the short amount of time allotted by the program \nto sign a lease.\nWhile there have been proposals to expand the \nnational housing safety net and preserve affordable \nunits, shortfalls in federal rental assistance programs \nand worsening cost burdens have prompted state \nand local governments to act to the extent that \nthey can. States and localities are leveraging other \nfederal resources, such as state and local fiscal \nrecovery funds, to support affordable housing.\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n5\n\n\n\n--- Page 8 ---\nA number of states, counties, and cities issued a record \n$17.2 billion of multifamily bonds in 2020 to supplement \nLIHTC allocations. Nationwide, states and cities also \ngenerate about $3 billion annually through housing \ntrust funds to meet local housing needs. All of these \nefforts are crucial but fall short of the growing need.\nAging Rental Stock Will Require \nReinvestment\nThe rental stock is older than it has ever been. The \nmedian age was 44 years in 2021, up from 34 years \ntwo decades ago. Although building construction \nstandards and repairs to existing units have helped \nto minimize the problem of structural inadequacy, a \nlarge number of rental units still fall short of baseline \nhabitability and safety. Nearly 4 million renter house­\nholds live in physically inadequate units with problems \nsuch as structural deficiencies, a lack of upkeep, or \ninconsistent provision of basic features like electricity, \nhot and cold running water, or heat. Even among units \nthat meet the criteria for physical adequacy, many \nstill have significant unmet repair needs. The Federal \nReserve Bank of Philadelphia estimated in 2023 that it \nwould cost $51.5 billion to address the physical defi­\nciencies of the occupied rental stock.\nMuch of the rental stock does not meet householders’ \naccessibility needs. The rapidly growing population \nof older adults will increase demand for accessibility \nfeatures, given that the occurrence of disabilities rises \nwith age. According to a 2023 survey conducted by \nFreddie Mac, nearly half of renters with disabilities say \ntheir homes are minimally or not at all accessible. \nRespondents most often reported needing bathroom \nmobility aids, home security systems, no-step entries, \nand accessible electrical outlets.\nThe rental stock also needs significant energy effi­\nciency and electrification modifications to reduce \ngreenhouse gas emissions and the high energy costs \nsqueezing lower-income renters. Rental homes—\nespecially those in small multifamily buildings—use \nmore energy per square foot than owner-occupied \nhomes, according to the Residential Energy Consump­\ntion Survey. Older homes also use more energy than \nnewer homes and have significant efficiency and \nelectrification needs.\nA one-time infusion of $3.5 billion for the Weatheriza­\ntion Assistance Program through the 2021 Infrastruc­\nture Investment and Jobs Act is helping some renters \nand rental property owners with home retrofits. Simi­\nlarly, the 2022 Inflation Reduction Act provided $8.8 \nbillion in efficiency and electrification improvement \nrebates for market-rate housing, including rental units, \nand $1 billion for efficiency upgrades to HUD-subsidized \nproperties. However, more incentives are needed to \nmeet the challenges of retrofitting the existing rental \nstock and ensure that new rental units are constructed \nwith high energy performance in mind.\nAnother growing threat to the quality of the nation’s \nstock of rental housing comes from the increasing \nfrequency and severity of weather- and climate-\nrelated hazards like wildfires, flooding, earthquakes, \nand hurricanes. More than 18 million occupied rental \nunits (41 percent) are located in areas with substantial \nexpected losses from such events. Simultaneously, a \ngrowing number of insurers are declining coverage \nin high-risk housing markets, making it increasingly \ndifficult and expensive for property owners and renters \nto obtain and afford the insurance needed to cover \npotential losses. To protect households and commu­\nnities, states and localities will need to push for hazard \nmitigation and climate adaptation measures for indi­\nvidual properties and across regions.\nHigh Interest Rates Have Depressed \nMarket Activity\nWith interest rates rising into 2023, the cost of debt to \nacquire and build multifamily properties has risen. At \nthe same time, high treasury yields have increased \nthe cost of equity, as apartments must provide greater \nreturns to investors to compete with Treasury notes.\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n6\n\n\n\n--- Page 9 ---\nAgainst this backdrop, borrowing and transac­\ntion activity has declined. More than half the banks \nsurveyed by the Federal Reserve reported that demand \nfor multifamily loans has decreased. Further, nearly \ntwo-thirds of multifamily lenders tightened their \nunderwriting criteria in response to uncertain prop­\nerty performance and interest rate hikes. Multifamily \nmortgage borrowing was down 48 percent year over \nyear in the second quarter of 2023.\nAs the cost of capital has risen, property prices have \ndropped. The beginning of 2023 marked the first time \nthat apartment prices fell year over year in more than \na decade. By the third quarter, prices were down 13 \npercent, a remarkable turnaround from the peak 23 \npercent growth rate posted at the beginning of 2022. \nFalling property prices reflect rising capitalization \nrates—an indicator of returns used to compare invest­\nments. According to Moody’s Analytics, cap rates fell \nthrough 2022 before rising by 0.9 percentage points \nover the first three quarters of 2023 to 5.8 percent. In the \ncurrent environment, higher-risk multifamily invest­\nment can be less attractive than lower-risk Treasuries.\nFor those who already own rental properties, net \noperating incomes are rising at a slower pace as rent \ngrowth moderates and expenses increase. According \nto Yardi Matrix, the cost of operating multifamily prop­\nerties grew 9 percent year over year in June 2023. In \nresponse, net operating income growth slowed to 3 \npercent in the third quarter of 2023, from the recent \nhigh of 25 percent posted in 2021.\nWhile slowing returns could spark delinquencies, most \nproperty owners should be protected by the signifi­\ncant equity accrued before the pandemic. Moreover, \nmost loans were underwritten with enough cushion to \ncover debt service. Plus, longer-term loans constitute \nthe largest share of all multifamily debt and have \nfewer near-term maturities that will not require refi­\nnancing in the current high interest rate environment. \nTo date, delinquencies have only inched up from their \nultra-low levels.\nNew Multifamily Construction \nHas Slowed\nAfter a major boom, multifamily construction has \nstarted to cool. As late as the spring, starts remained \nelevated even as interest rates rose, with a season­\nally adjusted annual rate of 571,000 units posted in \nMay 2023 (Figure 6). But with markets slackening and \n0\n100\n200\n300\n400\n500\n600\n700\nMonthly Starts\nAverage Starts (3-Month Trailing)\n2000\n2002\n2004\n2006\n2008\n2010\n2012\n2014\n2016\n2018\n2020\n2022\nNote: Data are for buildings with at least two units and are through October 2023.\nSource: JCHS tabulations of US Census Bureau, New Residential Construction data.\nFigure 6\nNew Multifamily Construction Has Quickly Declined\nAnnualized Multifamily Units (Thousands, Seasonally Adjusted)\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n7\n\n\n\n--- Page 10 ---\nhigh financing costs making it increasingly difficult \nto underwrite new deals, starts have fallen sharply \nin recent months. In October 2023, starts receded to \n402,000 units, a 30 percent decrease year over year.\nNevertheless, units that were already under way \ncontinue to come online in large numbers. A total \nof 436,000 multifamily units were completed in the \nthird quarter of 2023 on a seasonally adjusted annu­\nalized basis, the highest reading since 1988 and up \nabout a third from pre-pandemic levels. Likewise, the \nnumber of multifamily units currently under construc­\ntion reached the highest level on record in July 2023, \nmaintaining that fast pace at a seasonally adjusted \nannual rate of 1.0 million units in October.\nWhile the pipeline of units under construction should \nhelp provide new supply in the near term, declining \nstarts could worsen the existing supply shortage. Addi­\ntionally, local regulations and zoning laws constrain \nmultifamily construction in many neighborhoods. \nNationally, an estimated 75 percent of the land in \nmajor cities is zoned exclusively for single-family \nhomes. Several states have preempted local zoning \nlaws to allow a range of housing options. In 2023, \nMontana, Vermont, and Washington passed legisla­\ntion that allows modest-sized multifamily buildings \non lots previously zoned only for single-family homes, \nfollowing the lead of California, Maine, and Oregon. \nZoning reforms do not guarantee the construc­\ntion of new multifamily housing, but they remove a \nsignificant barrier.\nThe Outlook\nOver the coming year, the softening of the rental \nmarket will likely continue as the pipeline of units under \nconstruction boosts supply beyond already high levels \nand continues to slow rent growth. This will be good \nnews for renters, providing relief for households with \nhigher and middle incomes. But respite will likely be \nshort-lived in the face of strong demand from the \nlarge Gen Z, millennial, and baby boom generations.\nAffordability remains a critical concern. Lower-\nincome renters face the worst affordability conditions \non record. Rental subsidies have not kept pace with the \ngrowing need, leaving those without assistance to fend \nfor themselves in one of the costliest housing markets \nin history. And homelessness is at an all-time high. \nIncreasing the supply of market-rate units will help \nto address the affordability crisis but cannot wholly \nresolve it. Rather, significantly expanding assistance—\nespecially the programs that help the lowest-income \nrenters—will also be a crucial part of the solution.\nIn the short term, rising operating costs and high \ninterest rates will present a formidable challenge for \nproperty owners. The slowing growth in operating \nincomes will make it more difficult for property owners \nto invest in repair and maintenance, accessibility \nfeatures, and climate change mitigants and adap­\ntations. Yet, the massive pre-pandemic accumulation \nof equity, coupled with the pandemic’s unprecedented \nrent increases, should prevent widespread distress \namong property owners.\nDuring the pandemic, the increased resources for \nrenters, housing providers, and state and local govern­\nments demonstrated that financial assistance and \nsupports keep tenants stably housed and landlords \nsolvent. But as these resources have expired or been \nspent down, the housing safety net is once again over­\nwhelmed and underfunded, as has been the case for \nmany decades. While states and localities have acted \nto fill some of the gaps, a larger commitment from the \nfederal government is required to expand housing \nsupports and preserve and improve the existing \naffordable stock. Only then will the nation finally make \na meaningful dent in the housing affordability crisis \nmaking life so difficult for millions of people.\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n8\n\n\n\n--- Page 11 ---\nRENTER \nHOUSEHOLDS\nDemand for rental housing is stabilizing after the erratic highs and lows of the pandemic. The number of smaller \nrenter households with lower incomes has grown in recent years and remains an important source of rental \ndemand. Nevertheless, longer-term demand has come from the growing number of renter households with \nhigher incomes, and has reshaped rental markets over the last decade. The large Gen Z, millennial, and baby \nboom generations have also supported rising numbers of renter households. While overall renter mobility rates \nare falling, migration is helping to sustain demand in some states.\nRental Demand Is Returning \nFollowing the pandemic rollercoaster, demand for \nrental housing is finally stabilizing. After an initial slow­\ndown during the first year of the pandemic, rental \ndemand surged in 2021. A flood of new households \nfueled a quick rise in rents and historically low vacancy \nrates. In recent quarters, renter household growth has \nreturned to the more typical pace witnessed in the \nyears preceding the pandemic, buoyed in part by the \nhigh cost of homeownership, an influx of new supply \nhelping to moderate rents, and a strong job market \n(Figure 7).\n25\n28\n3 1\n34\n37\n33\n34\n35\n36\n37\n38\n39\n40\n41\n42\n43\n44\n45\n2001 2002 2003 2004 2005 2006 2007 2008 2009 2010\n2011\n2012\n2013\n2014\n2015\n2016\n2017\n2018\n2019 2020\n2021\n2022 2023\nRenter Households\nRentership Rate (Right Scale)\nNotes: Values for 2023 are year-to-date averages for the first three quarters. Values for 2020 are omitted because data collection was \ndisrupted during the pandemic.\nSource: JCHS tabulations of US Census Bureau, Housing Vacancy Surveys.\nFigure 7\nThe Number of Renter Households Is Trending Upward Despite Declining Rentership Rates\nRenter Households (Millions)\t\nRentership Rate (Percent)\nThe professionally managed apartment market—a \nsector that typically houses renters with higher \nincomes and constitutes more than a quarter of US \nrental units—has been particularly prone to these \ndramatic fluctuations in household growth. After \nhitting a record-breaking 706,000 year-over-year net \n02\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n9\n\n\n\n--- Page 12 ---\nincrease at the beginning of 2022, growth in renter \nhouseholds plummeted quickly to an annual net loss \nof 192,000 by the first quarter of 2023, according to \ndata from RealPage. However, following three quar­\nters of decline, the quarter-over-quarter change in \nthe number of occupied apartments turned slightly \npositive at the start of 2023, followed by a modest \nsecond-quarter reading. Rental demand accelerated \nin the third quarter with 91,000 new renter households, \nputting household growth nearly on par with readings \nbefore the pandemic.\nThe overall rental market also saw swift increases in \nhousehold formations in 2021 followed by a return to \npre-pandemic levels of growth in 2023. According to \nCenter tabulations of the Housing Vacancy Survey, \nthe number of renter households reached 44.3 million \nin the third quarter of 2023—34.1 percent of US house­\nholds. Of the 927,000 renter households that entered \nthe market since the start of the pandemic, about \n317,000 did so within the last year. This growth signals \na return to the pace posted before the pandemic. In \n2019, 299,000 renter households entered the market.\nRenter Household Growth Is Shifting \nMuch of the short-term growth in renters has come \nfrom smaller households and those with lower and \nmore moderate incomes. In the years leading up to the \npandemic, rental demand increased among house­\nholds earning at least $75,000 annually. Between 2016 \nand 2019, the rental market added 1.3 million higher-in­\ncome households while losing 1.0 million households \nwith annual incomes under $75,000, according to data \nfrom the American Community Survey (Figure 8). This \ntrend reversed during the pandemic. Between 2019 \nand 2022, most renter growth came from the 1.1 million \nadditional households with incomes under $75,000. \nOver this same period, the number of renter house­\nholds with higher incomes rose by just 16,000.\nThis recent slowdown in renter household growth \namong those with incomes of $75,000 or more was \nat least partially attributable to increasing rates of \nhomebuying by renters with even higher incomes who \ntook advantage of the low interest rates available in \nthe early part of the pandemic. The modest loss of \n1\n2\n3 or More\nNumber of People in Household\n-1.0\n-0.5\n0.0\n0.5\n1.0\n1.5\nUnder $30,000\n$30,000-$74,999\n$75,000 and Over\nHousehold Income\n2016-2019\n2019-2022\nNote: Household incomes are adjusted for inflation using the CPI-U for All Items.\nSource: JCHS tabulations of US Census Bureau, American Community Survey 1-Year Estimates.\nFigure 8\nLess Affluent, Smaller Households Boosted Pandemic-Era Renter Growth\nChange in Renter Households (Millions)\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n10\n\n\n",
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        "text": "--- Page 13 ---\nrenter households earning at least $150,000 was more \nthan offset by the uptick in homeowners in this income \nbracket. Additionally, some of the decrease was likely \namong renter households with higher incomes that \ncapitalized on rent deals in the early months of the \npandemic to split into smaller households with lower \nincomes. The largest increases in renter households \nbetween 2019 and 2022 came from single- and \ntwo-person households with incomes below $75,000.\nIn fact, single-person renter households grew most \nacross all income brackets during the pandemic, \nincreasing by 1.2 million between 2019 and 2022, \neclipsing the 722,000 households of that type added \nbetween 2016 and 2019. Rental demand also bene­\nfited from roommate (416,000) and extended family \n(223,000) arrangements, with most of this growth \ncoming from two-person households. Further contrib­\nuting to the growth in smaller renter households was \na decrease in the number of married couples with \nchildren and single parents, possibly explained by \ntransitions to homeownership or by the splitting of \nthese households into new ones.\nA New Generation Is Driving Demand \nRenting plays an important role in housing people \nthroughout the life course. For younger people, renting \nprovides an opportunity to live independently while \nentering adulthood. Delayed marriage and parent­\nhood have also increased the attractiveness and the \nnecessity of renting further into adulthood. For people \nat older ages, rental homes can support indepen­\ndent living through better accessibility and reduced \nmaintenance. At all ages, renting is a flexible option \nthat makes it easier for people to adjust their housing \naccording to their personal circumstances.\nOver the past decade, the bulk of the growth in renter \nhouseholds has come from younger generations. \nThe millennial generation, those born between 1980 \nand 1994, drove much of the renter growth until 2016. \nThis generation is not only the largest, but also more \nlikely to rent than prior ones at the same ages. Having \ncome of age during the Great Recession with fewer \njob prospects, lower wages, high student loan debt, \nand tightened mortgage lending, many have delayed \nhomeownership. As a result, the number of millenni­\nal-headed renter households grew by an enormous \n6.2 million between 2009 and 2019 to a peak of 16.2 \nmillion (Figure 9).\n0\n2\n4\n6\n8\n10\n12\n14\n16\n18\n2007\n2008\n2009\n2010\n2011\n2012\n2013\n2014\n2015\n2016\n2017\n2018\n2019\n2020\n2021\n2022\nGen Z\n(Born 1995–2009)\nMillennial\n(Born 1980-1994)\nGen X\n(Born 1965-1979)\nBaby Boom \n(Born 1946-1964)\nPre-Boom \n(Born 1945 or Earlier)\nNote: Data for 2020 are based on 2019 and 2021 values because of pandemic data disruptions.  \nSource: JCHS tabulations of US Census Bureau, American Community Survey 1-Year Estimates.\nFigure 9\nNew Rental Demand Has Shifted from Millennials to Gen Z\nRenter Households (Millions)\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n11\n\n\n\n--- Page 14 ---\nWhile millennials will remain a large source of rental \ndemand in coming years, they are no longer fueling the \ngrowth in renter households. Rather, they are aging into \nprime homeownership years, a transition that markets \nare already witnessing. The number of renter house­\nholds headed by a millennial fell by 797,000 between \n2019 and 2022 as their homeownership rate increased \nby 9 percentage points during the same period.\nInstead, members of the slightly smaller but still large \nGen Z, individuals born between 1995 and 2009, are \ndriving rental demand. Already, these individuals \nheaded 7.9 million renter households in 2022. Going \nforward, overall growth in renter households will \ndepend upon whether the rise in the number of Gen \nZ renters will be sufficient to overcome the eventual \ndecline in older renters. This was true for millennials \nduring the 2000s and 2010s. However, Gen Z may follow \na different trajectory, given that this generation already \nhas higher homeownership rates than millennials did \nat the same age.\nBaby boomers also continue to help sustain longer-\nterm rental demand. Even though the number of renter \nhouseholds headed by a baby boomer is decreasing, \nthe generation is so much bigger than any before it \nthat the number of older renters is still growing. In the \nlast five years alone, renter households headed by \nsomeone age 65 and over increased by more than \n1 million. With the oldest baby boomers turning 80 in \n2026—an age when more people turn to renting—a \nwider range of affordable rental options for older \nadults will be required to accommodate their changing \nneeds. Renting will be an especially attractive option \nfor older adults who want to age in their community, \nreduce their maintenance responsibilities, and access \nthe shared spaces for social interaction and accessi­\nbility features more common in multifamily buildings.\nHigher-Income Households Are \nExerting More Influence\nWhile households with lower incomes led growth \nduring the pandemic, higher-income households have \nincreasingly driven rental demand over the longer \nterm. The number of renter households with incomes \nof $75,000 or more has risen 43 percent since 2010, to \n13.5 million as of 2022 (Figure 10). Likewise, the share of \nrenters earning at least $75,000 annually has risen by \nmore than 6 percentage points to 30 percent during \nthis same period. Much of the growth has come from \n0\nUnder $15,000\n$15,000-$29,999\n$30,000-$44,999\n$45,000-$74,999\nHousehold Income\n2010\n2016\n2022\n2\n4\n6\n8\n10\n12\n14\n$75,000 and Over\nNote: Household incomes are adjusted for inflation using the CPI-U for All Items.  \nSource: JCHS tabulations of US Census Bureau, American Community Survey 1-Year Estimates.\nFigure 10\nHouseholds with Higher Incomes Have Fueled Long-Term Demand\nRenter Households (Millions)\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n12\n\n\n\n--- Page 15 ---\nrenters who are married and have college educations, \na demographic that fits previous generations’ profile \nof first-time homebuyers.\nHigher-income renters have characteristics that set \nthem apart from the typical renter household. For \nstarters, they are younger. Fully 42 percent of them are \naged 35–54, as compared to 34 percent of all renters. \nThey are also more likely to be married, with 40 percent \nwedded versus 24 percent of all renter households. \nGiven these demographic trends, it is perhaps unsur­\nprising that higher-income renters are slightly more \nlikely to have children and larger households than the \ngeneral population of renters. And because income \ncorrelates with education, these renters have higher \nlevels of education, with more than half possessing at \nleast a bachelor’s degree, including 20 percent with a \ngraduate or professional degree.\nFinally, renters with higher incomes are dispropor­\ntionately white (53 percent) or Asian (9 percent) as \ncompared to all renters (50 percent and 5 percent, \nrespectively). Meanwhile, Black householders are \nunderrepresented in this market segment, consti­\ntuting just 13 percent of these renters (compared to 19 \npercent of all renters). Households headed by Hispanic \n(20 percent), multiracial (4 percent), and Native Amer­\nican (0.4 percent) renters are evenly represented.\nRenter households with incomes of at least $75,000 \nare most common in metros with high rentership rates, \nmedian household incomes, and housing costs. In \nthese areas, renting is more the norm, and homeown­\nership options may be prohibitively expensive, even for \nhouseholds with higher incomes. For example, in both \nSan Jose and San Francisco, households with higher \nincomes make up more than half of all renters. In these \ntwo metros, the rentership rate among higher-income \nhouseholds is more than 35 percent, as compared to \n22 percent nationally.\nConversely, households with higher incomes make up \nsmaller shares of renters in markets where housing \ncosts are more affordable and incomes tend to be \nlower. Most of these metros are located in the South or \nMidwest, including Cleveland, Columbia, El Paso, and \nJackson, where rentership rates among households \nwith annual incomes at or above $75,000 are under \n18 percent.\nThe elevated rentership rate among higher-income \nhouseholds in expensive markets suggests that \nobstacles to homeownership are formidable, even \nfor households with above-average earnings. Industry \nsurveys have found that many renters hope to own a \nhome someday but consider their goal out of reach. A \nquarter of millennial households surveyed by Apart­\nment List, for example, reported that they will always \nrent, citing affordability as the biggest barrier to home­\nownership. Rising rents have challenged renters’ ability \nto save for a downpayment. At the same time, the low \nvolume of for-sale inventory and escalating home \nprices make it difficult for even higher-income renters \nto become homeowners.\nStill, attractive rental options—such as single-family \nhomes and apartments with amenities—in desirable \nlocations have encouraged some households with \nhigher incomes to continue to rent. In 2022, about 8.5 \nmillion renter households made at least $100,000 per \nyear, incomes that put the nation’s median-priced \nhome within reach. Of these households, 39 percent \nlived in single-family rental homes. An additional 19 \npercent lived in apartments in large multifamily build­\nings with at least 50 units, properties that tend to be in \nurban areas and rich with amenities. A third of house­\nholds with incomes of $100,000 or more lived in new \nrental units built after 2000.\nThe existing range of rental options may enable \nthese more affluent households to live in the type of \nhousing they want, in a location that suits them, and \nin a high-quality home while still enjoying the flexi­\nbility and convenience of renting. These advantages \nmay make renting a more attractive option than \nhomebuying, even for households that could afford \nto become homeowners.\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n13\n\n\n\n--- Page 16 ---\nMany Renters Are Economically \nVulnerable\nWhereas renting may be a choice for some house­\nholds with higher incomes, it may be the only option \nfor those who earn less. The median renter house­\nhold income in 2022 was about $47,000, and a signif­\nicant share of renters have much lower incomes. \nThirty-two percent of renters (14.6 million) had house­\nhold incomes below $30,000 in 2022. According to the \nmost recent Survey of Consumer Finances in 2022, \nthese renters had a median cash savings of just \n$300 and total net wealth—including retirement \naccounts and other investment funds—of just $3,200. \nThese financially precarious households face a \ngreater risk of housing instability and cost burdens \nbut remain an important source of rental demand.\nThe characteristics of lower-income renter households \ncan add to their economic vulnerability. As compared \nto both the full renter population and the higher-\nincome households that have driven demand over \nthe last decade, households with lower incomes \nare more likely to be headed by an older adult and \nconsist of a single person (Figure 11). Over a quarter \n(28 percent) of renter households with lower incomes \nare headed by someone at least 65 years old, a full \n11 percentage points more than that of all renter \nhouseholds. An additional 16 percent are headed \nby someone between the ages of 55 and 64. The \nolder age distribution contributes to the high share \nof lower-income households that consist of a single \nperson (59 percent) and the low share that have \nchildren (21 percent).\nFurther, lower-income households may be espe­\ncially financially fragile because of their lower levels \nof educational attainment and higher prevalence \nof disability, both of which can limit job prospects. \nMore than half of lower-income renter households (53 \npercent) are headed by someone without a college \ndegree, compared to 38 percent of all renters, and just \n16 percent have at least a bachelor’s degree. Disabili­\nties can make it difficult for households to secure and \nretain employment, depressing household earnings.\nA full 34 percent of all lower-income renter house­\nholds are headed by a person with a disability, the \nmajority of whom are under age 65.\nLower-Income\nRenters\nHigher-Income\nRenters\nAll Renters\nSingle Person\nMarried\nOther Family\nRoommates\nHousehold Type\n0\n10\n20\n30\n40\n50\n60\n70\n80\n90\n100\nLower-Income\nRenters\nHigher-Income\nRenters\nAll Renters\nAge\nUnder 35\n35-44\n45-54\n55-64\n65 and Over\nNotes: Lower-income households earn less than $30,000. Higher-income households earn at least $75,000. Age is for the household \nhead. Other family households include single parents.\nSource: JCHS tabulations of US Census Bureau, 2022 American Community Survey 1-Year Estimates.\nFigure 11\nLower-Income Renters Are More Likely to Be Older and Live Alone\nShare of Households (Percent)\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n14\n\n\n\n--- Page 17 ---\nAnd because racial discrimination in education and \nlabor markets restricts opportunities and wages, \nhouseholds headed by a Black person are more likely \nto have lower incomes than households of other races \nand ethnicities. Consequently, they constitute an \noutsized share of lower-income renter households. \nA full 42 percent of households headed by a Black \nperson earn less than $30,000 annually, compared \nto 30 percent of those headed by a white person with \nsimilarly low incomes. As a result, households headed \nby a Black person make up a quarter of lower-in­\ncome households despite being just under a fifth of \nall renter households. Likewise, households headed \nby a Native American person face economic chal­\nlenges and discrimination that make them more \nlikely to face financial precarity. Indeed, 42 percent \nof households headed by a Native American person \nare lower income.\nHouseholds with lower incomes constitute a larger \nshare of renters in less expensive markets where \nhomeownership is more attainable and rents are \nmore affordable. Among the 100 most populous \nmetros, lower-income households make up more \nthan 40 percent of renters in more affordable Southern \ncities as well as in deindustrialized Rust Belt cities like \nBuffalo, Toledo, and Cleveland. Additionally, renters \nwith lower incomes disproportionately live in counties \nin smaller metropolitan areas and rural communities, \nand are slightly more likely to live in counties with \npersistent poverty.\nRenting Benefits Mobile Populations\nOne benefit of renting compared to owning a home \nis the relative ease of moving. The lower transaction \ncosts involved in relocating into or out of a rental unit \nmake renting preferable for younger households as \nwell as those who are relatively mobile or looking for \nshorter-term living arrangements. Reflecting these \nbenefits, the renter mobility rate—the yearly share \nof renters who change residences—is much higher \nthan that of homeowners. About 16 percent of renters \nreport having moved in the past year, compared to just \n4 percent of homeowners.\nNearly a third \nof renters had \nhousehold \nincomes under \n$30,000 in 2022.\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n15\n\n\n\n--- Page 18 ---\nEven so, mobility rates among renters have continued \ntrending downward over the last decade. According \nto the Current Population Survey, 25 percent of renters \nmoved during the previous year in 2013, but the rate \ngradually dropped to 20 percent by 2019. It then fell \neven further to 16 percent in 2021 as the pandemic \nprompted record-high lease renewals. The mobility \nrate has held steady at 16 percent through 2023, \nreflecting tightening housing markets and continued \nhigh apartment retention rates.\nIn the event renters did choose to relocate, they often \nopted to remain local. In 2023, 61 percent of renter \nmoves were within the same county, and an additional \n17 percent stayed in state. The remaining moves were \neither from another state (15 percent) or from abroad \n(7 percent). While overall mobility rates have declined, \ninterstate movers have nonetheless continued to be \nan important source of rental demand. In 2022 alone, \nTexas, Florida, North Carolina, and Arizona each gained \nmore than 18,000 households from domestic migration, \nwhile New York, California, and New Jersey each lost \nmore than 20,000 households.\nTypically, renters move in pursuit of better housing, \nto form a new household, or to be closer to a new job \nor their family. Among those who moved in 2023, the \ntwo most common reasons were for a new job or to \nrelocate to a new or better home (14 percent each). \nThe share who moved for a new or better home in \n2023 was notably lower than in 2019, perhaps because \npeople made these moves earlier in the pandemic \nin response to the increased need for more space. \nAnother 11 percent of moves were for more afford­\nable housing, and 10 percent were due to new \nhousehold formation.\nThe Outlook\nAfter the pandemic-era highs and lows, rental demand \nappears to be stabilizing. The resumption of renter \nhousehold growth in 2023 after a dip earlier in the \npandemic is a positive sign for rental property owners. \nWhether this level of growth will continue remains to \nbe seen. Nevertheless, given the long-term increase \nin renter households, there is likely to be a relatively \nhigh number of renters for years to come.\nLikewise, the underlying age distribution of the US \npopulation also points to sustained rental demand \ngoing forward. A meaningful portion of the large millen­\nnial population is renting later in life than members \nof previous generations. Further, even as millennials \nturn to homeownership in greater numbers, Gen Z \nhas already taken over as the primary driver of rental \ndemand growth. At the same time, the aging of the \nbaby boomers into their 70s and 80s means that those \nwho wish to remain in their communities without the \nresponsibilities of homeownership may transition to \nrenting. Providing affordable, accessible rental options \nfor these older adults will help them to age with dignity \nand security.\nRenting is a preferable housing option for many indi­\nviduals. Units with amenities in desirable locations \nand single-family rentals are increasingly attractive \nto households with higher incomes. For some, these \noptions may provide a stepping stone to homeown­\nership. However, for others, renting is the only option. \nHouseholds that lack the financial resources to \nbecome homeowners continue to rely on the rental \nmarket as their sole source of housing. These house­\nholds are an equally important component of demand. \nEnsuring that they have adequate, affordable housing \nis an ongoing policy challenge.\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n16\n\n\n\n--- Page 19 ---\nRENTAL HOUSING \nSTOCK \nStrong multifamily housing production continues to shift rental stock composition toward larger buildings. At \nthe same time, the volume of low-rent units is falling, leaving financially vulnerable renters with fewer affordable \noptions. Restrictions on development further limit the availability of rentals in many suburban communities and \nexclude renters from some neighborhoods. Nationwide, the aging rental stock needs significant investment to \nimprove housing quality, accessibility, and resilience to climate-related hazards.\nLarge Buildings Are a Growing Share \nof the Rental Stock\nBetween 2010 and 2022, the total rental supply \nincreased by 4.3 million units to 48.1 million units. This \ngrowth was driven primarily by the construction of \nlarge multifamily buildings (Figure 12). During this \nperiod, the number of apartments in multifamily \nbuildings with 20 or more units grew by 3.3 million, \nto 12.3 million units. The supply in midsize buildings \nwith 5–19 units also increased, though by a modest \n292,000 apartments, to 10.6 million units. Rentals in \nsmall multifamily buildings with 2–4 units, a property \ntype that tends to be more affordable, increased by \njust 103,000, to 8.3 million units.\nCompared to 2010, the supply of single-family homes \nfor rent has grown by 649,000 homes, to 14.9 million in \n2022, although this is down from the peak of 16.1 million \nrecorded in 2016. Many of these homes converted from \nowner-occupancy to rental during the first half of this \nperiod, especially in the aftermath of the foreclosure \ncrisis. However, in the second half of this period, the \ntrend reversed. Beginning in 2016, the supply of single-\nfamily rentals declined every year as homes converted \nto owner-occupancy or were otherwise lost to building \ndemolitions and condemnations. Nevertheless, single-\nfamily homes represented nearly a third of the total \nstock in 2022.\n7\n8\n9\n10\n1 1\n12\n13\n14\n15\n16\n17\n2010\n2012\n2014\n2016\n2018\n2020\n2022\nSingle Family\n2-4 Units\n5-19 Units\n20 or More Units\nNotes: Rental units may be occupied, vacant for rent, or rented \nbut unoccupied. Single-family homes include attached and \ndetached units. Data for 2020 are based on 2019 and 2021 values \nbecause of pandemic data disruptions.  \nSource: JCHS tabulations of US Census Bureau, American \nCommunity Survey 1-Year Estimates.\nFigure 12\nLarger Buildings Account for Most of the Rental \nStock Growth\nNumber of Rental Units (Millions)\n03 \nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n17\n\n\n\n--- Page 20 ---\nThe disproportionate increase in units in larger multi­\nfamily buildings relative to other rental types has \nchanged the composition of the rental stock. Since \n2010, the share of rentals in large multifamily build­\nings has increased by 5 percentage points and are 25 \npercent of the rental stock as of 2022. Meanwhile, the \nsingle-family rental share dropped by 2 percentage \npoints. Likewise, the shares of rental units in midsize \nand small multifamily buildings each dropped by 1 \npercentage point. Midsize buildings with 5–19 units \naccounted for 22 percent of the rental stock and \nsmaller buildings with 2–4 units constituted 17 percent. \nThe share of manufactured housing, which totaled just \n2.0 million units in 2022, also declined by 1 percentage \npoint over the previous 12 years, to just 4 percent of \nrental units.\nThe shift in rental housing away from smaller prop­\nerties and toward apartments in larger buildings is \ndue mainly to the composition of new construction. \nBetween 2010 and 2022, annual completions of multi­\nfamily rentals grew from 125,000 to 342,000 units, with \n3.5 million units added in this period, according to \nthe Census Bureau Survey of Construction. A full 2.9 \nmillion were apartments in buildings with at least \n20 units, pushing up their share of multifamily rental \ncompletions from 79 percent to 90 percent between \n2010 and 2022.\nWhile annual completions of single-family rentals have \naccelerated rapidly in response to growing demand, \nsingle-family homes built as rentals remained a small \nshare of new construction. Completions of single-\nfamily rentals rose from 26,000 to 67,000 units annually \nbetween 2010 and 2022. In total, 518,000 new single-\nfamily homes built as rentals were completed in this \nperiod, representing 13 percent of new rental units.\nSupply of Low-Rent Units Is Dwindling \nThe supply of low-rent units continues to shrink. These \nunits rent for less than $600 a month—the maximum \namount affordable to a household earning $24,000 \nannually when applying the 30 percent of income \nstandard. In the last decade, the number of low-rent \nunits dropped by 2.1 million, including a loss of 230,000 \nfrom 2021 to 2022 alone. This left just 7.2 million units \nwith rents below $600 as of 2022 (Figure 13). Since 2012, \nthe market also lost an astounding 4.0 million units \nwith rents between $600 and $999. In total, the market \n0\n2\n4\n6\n8\n10\n12\n14\n16\n18\nUnder $600\n$2,000 and Over\nContract Rent\n2012\n2022\n$600-$999\n$1,000-$1,399\n$1,400-$1,999\nNotes: Rents are adjusted for inflation using the CPI-U Less Shelter. Units that are occupied but do not receive payment are excluded. \nContract rents exclude utility costs. \nSource: JCHS tabulations of US Census Bureau, American Community Survey 1-Year Estimates.\nFigure 13\nThe Stock of Low-Rent Units Is Shrinking\nNumber of Rental Units (Millions)\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n18\n\n\n\n--- Page 21 ---\nlost 6.1 million units renting for less than $1,000, the \nmaximum amount affordable to a household earning \n$40,000 per year. Various market forces have contrib­\nuted to these losses, including rent increases among \nexisting units, building condemnations and demoli­\ntions, and tenure conversions.\nDuring the same period, the supply of units renting \nfor between $1,000 and $1,399 increased by 400,000. \nThe market also gained 4.3 million units with rents \nbetween $1,400 and $1,999, and 4.1 million units renting \nfor $2,000 or more.\nThe declining supply of low-rent units, combined with a \nsteady stream of new construction targeting the high \nend of the market, has shifted the distribution of rents \nupward. In 2022, just 16 percent of units had contract \nrents below $600, down from 22 percent of the rental \nstock in 2012. Meanwhile, the share of units renting for \n$1,400 or more nearly doubled, from 21 percent to 38 \npercent of units.\nThe loss of low-rent units has been geographically \nwidespread, with decreases recorded in 47 states \nand the District of Columbia. Fully 42 states lost more \nthan 10 percent of their low-rent stock between 2012 \nand 2022, including 24 that lost more than 20 percent. \nAmong the hardest hit states were those previously \nconsidered more affordable that have seen swiftly \ngrowing rental demand, including Texas, North Caro­\nlina, and Georgia. Several Midwestern states also expe­\nrienced significant losses despite recording relatively \nslow rental demand, including Ohio, Michigan, and \nIndiana. In more expensive states already short on \nlow-rent units, the net decline extended much farther \nup the rent spectrum, with 16 states losing units at all \nrent levels up to $1,400.\nLow-rent units are an essential source of affordable \nhousing for households with lower and moderate \nincomes. In 2022, 60 percent of renter households \nliving in low-rent units earned less than $30,000 \nper year, including 36 percent with annual incomes \nbelow $15,000. For many renters at these income \nlevels, $600 a month is a stretch. Using the standard \nThe number of \nlow-rent units has \nfallen by 2.1 million \nin the last decade.\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n19\n\n\n\n--- Page 22 ---\n30 percent of income calculation, these households \ncan afford a monthly rent of no more than $750 and \n$375, respectively.\nAdditionally, low-rent units help house middle-income \nhouseholds that may also struggle to secure afford­\nable housing. In 2022, 28 percent of units renting for less \nthan $600 were occupied by middle-income house­\nholds earning between $30,000 and $75,000 annually. \nIncreasing the availability of units with lower rents and \npreserving the existing supply of these units is critical \nto ensuring that financially vulnerable households are \nable to secure housing they can afford.\nSupply Varies Across Geographies\nThe composition of the rental stock varies widely \nby region. In 2021, a third of rentals in the Northeast \nwere in large multifamily buildings, well above the \nWest (26 percent), Midwest (22 percent), or South (21 \npercent). The Northeast also had the largest propor­\ntion of rental units in small multifamily buildings, at 27 \npercent, compared to just 19 percent in the Midwest, \n15 percent in the West, and 14 percent in the South. \nConversely, the Northeast had the smallest proportion \nof single-family rentals, at 19 percent, while single-\nfamily homes were about a third of the rental stock \nin all other regions.\nRent levels likewise vary across regions, reflecting \ndifferences in the composition and age of the stock, \nhousehold incomes, and housing demand. High-cost \nrentals are most common in the West and Northeast. \nIn 2021, 45 percent of units in the West had rents of at \nleast $1,500, as did 34 percent of rentals in the North­\neast, well above the share in the South (19 percent) or \nthe Midwest (10 percent).\nThere are also notable differences in the rental stock \namong urban, suburban, and nonmetropolitan areas \n(Figure 14). In 2021, 40 percent of occupied rentals were \nin urban areas, 48 percent were in suburban areas, \n$600-$999\n$1,000-$1,249\n$1,250-$1,499\n$1,500 and Over\nUrban\nSuburban\nNonmetropolitan\nContract Rent\nUrban\nSuburban\nNonmetropolitan\nStructure Type\nUnder $600\nManufactured\n2-4 Units\n5-19 Units\n20 or More Units\nSingle Family\n0\n10\n20\n30\n40\n50\n60\n70\n80\n90\n100\nNotes: Only occupied rental units are depicted. Manufactured housing includes other structures such as boats and RVs. Contract \nrents exclude utility costs. Urban and suburban tracts fall within metropolitan statistical areas. Nonmetropolitan tracts fall outside of \nmetropolitan areas.\nSource: JCHS tabulations of US Census Bureau, 2021 American Community Survey 5-Year Estimates.\nFigure 14\nThe Rental Stock Varies Widely Across Markets, with Low-Rent Units More Common in  \nNonmetropolitan Areas\nShare of Rental Stock (Percent)\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n20\n\n\n\n--- Page 23 ---\nand 11 percent were in communities outside metro­\npolitan areas. In urban areas, over half (51 percent) of \nthe housing stock was rented, significantly more than \nin suburban (30 percent) and nonmetropolitan areas \n(28 percent). Nearly three-quarters of rentals in urban \nneighborhoods were multifamily units, compared to \n59 percent in suburban neighborhoods and 41 percent \nin neighborhoods outside metropolitan areas. Apart­\nments in large multifamily buildings with 20 or more \nunits were also far more common in urban communi­\nties, accounting for 31 percent of the rental stock there, \nwell above the shares in suburban (19 percent) and \nnonmetro (8 percent) areas.\nIn contrast, nonmetropolitan and suburban commu­\nnities have a much higher proportion of single-family \nand manufactured homes for rent. In 2021, about half \nof rental units outside metropolitan areas were single-\nfamily homes, compared to 36 percent in suburban \nareas and 26 percent in urban areas. Manufactured \nhousing accounted for 13 percent of all rentals in \nnonmetropolitan communities but was much less \ncommon in suburban areas (5 percent) and virtually \nabsent from urban areas (1 percent). In fact, while \nnonmetropolitan areas accounted for just 11 percent \nof all rental units, they contained a third of the nation’s \nmanufactured housing supply.\nRent levels also vary greatly across urban, suburban, \nand nonmetropolitan geographies. Urban and \nsuburban areas have significantly higher shares of \nunits renting for at least $1,500 (25 percent and 26 \npercent, respectively), compared to just 4 percent of \nrentals in communities outside metropolitan areas. \nNonmetropolitan areas tended to be priced lower, \nwith 53 percent of units renting for less than $600, \ncompared to just 15 percent of rentals in suburban \nareas and 17 percent in urban areas. In total, commu­\nnities outside metropolitan areas contain just over a \nquarter of the nation’s stock of units that rent for less \nthan $600. \nLocation of Rental Stock Contributes \nto Inequalities\nThe nation’s rental stock is unevenly distributed across \nneighborhoods, limiting where renters can live. In 34 \npercent of neighborhoods, less than 20 percent of the \nhousing stock is available to rent, resulting in commu­\nnities that are essentially rental deserts. Conversely, \nowner-occupied homes account for less than 20 \npercent of the stock in just 6 percent of neighborhoods.\nRental deserts tend to be located in suburban areas \nwhere restrictive land use policies make it difficult to \nbuild multifamily housing, which is predominantly \nrenter-occupied. In 2021, suburban neighborhoods \nconstituted 55 percent of census tracts nationally, \nbut 68 percent of neighborhoods where less than 20 \npercent of the stock is available to rent.\nSingle-family homes, which tend to be owner-occu­\npied, are much more common in these communi­\nties. In neighborhoods where less than 20 percent of \nhousing is rental, single-family homes accounted for \n85 percent of all housing in 2021, compared to just 17 \npercent of the housing stock in neighborhoods that are \nmore than 80 percent rentals. Large multifamily build­\nings with 20 or more units accounted for just 2 percent \nof the housing stock in rental deserts, compared to 42 \npercent of the units in neighborhoods with abundant \nrental housing.\nThe lack of rental options in many neighborhoods rein­\nforces inequities and contributes to socioeconomic \nsegregation. Communities with little rental housing \nhave higher median incomes, reflecting renters’ \ntypically lower annual incomes. In 2021, the median \nhousehold income in rental desert neighborhoods was \n$92,000, almost twice that of the $49,000 median in \nareas with robust rental options.\nFurther, the limited availability of rental housing in some \nneighborhoods constrains housing options for many \npeople of color. A long history of racially discriminatory \ngovernment policies and real estate practices has \nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n21\n\n\n",
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        "text": "--- Page 24 ---\nrestricted neighborhood choice and prevented many \nhouseholds of color from becoming homeowners. \nThese actions, along with discrimination in education \nand labor markets, have contributed to higher rent­\nership rates among Black and Hispanic households.\nThe legacy of these inequities is evident in the low \nshare of households of color in rental deserts. In 2021, \npeople of color headed just 24 percent of households \nin rental deserts, as compared to 66 percent of house­\nholds in neighborhoods where more than 80 percent \nof homes are rented. The share of households headed \nby a Hispanic person was three times higher in neigh­\nborhoods with abundant rental options than in rental \ndeserts (30 percent versus 10 percent), and the share \nheaded by a Black person was nearly four times higher \n(22 percent versus just 6 percent).\nThese patterns of residential segregation are difficult \nto undo in part because they are reinforced by various \nland use regulations. Single-family zoning and other \ndensity limitations restrict the development of multi­\nfamily buildings, effectively making it more challenging \nto add rental housing. Several states and communities \nhave recently enacted zoning changes to allow for \nmore types of housing in areas previously zoned exclu­\nsively for single-family homes. These zoning changes \ncould increase rental options in neighborhoods where \nfew exist, help expand the geographic options avail­\nable to renters, and better integrate communities.\nHousing Inadequacy Persists\nThe rental stock is older than at any other recorded \ntime. In 2021, the median age of renter-occupied\nhomes reached 44 years, up from 39 years a decade \nearlier and 34 years in 2001. Investment in the aging \nhousing stock is vital, given the persistence of \nsubstandard housing. Despite improvements in \nbuilding codes and construction standards, as well \nas upgrades and repairs to existing units, 3.9 million \nrenter households lived in homes that did not meet \nbasic standards for suitability and safety in 2021. This \nrepresents an overall increase of 350,000 households \nover the past two decades.\nThe rental stock is \nolder than it’s ever \nbeen at a median \nage of 44 years.\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n22\n\n\n\n--- Page 25 ---\nAccording to data from the most recent American \nHousing Survey, in 2021, 8.4 percent of renter house­\nholds lived in substandard housing with multiple prob­\nlems such as structural deficiencies, a lack of upkeep, \nor the inconsistent provision of basic features such \nas hot and cold running water, heat, and electricity. \nPhysical inadequacy from disrepair and structural \ndeterioration is much more common in older homes. \nOverall, 13 percent of units built before 1940 were clas­\nsified as physically inadequate in 2021, more than twice \nthe 6 percent share of newer units built between 2000 \nand 2021.\nGiven that substandard units tend to have low rents, \nhouseholds with lower incomes are more likely to \noccupy these homes (Figure 15). In 2021, 12 percent \nof renter households earning less than $15,000 lived \nin inadequate housing, double the 6 percent of \nrenters with incomes of $75,000 or more. While most \nsubsidized housing properties meet basic safety \nand suitability standards, severe underfunding of \n0\n2\n4\n6\n8\n10\n12\nBlack\nHispanic\nWhite\nAsian\nUnder\n$15,000\n$15,000-\n$29,999\n$30,000-\n$44,999\n$45,000-\n$74,999 \n$75,000\nand Over\nAll\nHouseholds\nRace/Ethnicity \nHousehold Income\nNotes: Housing inadequacy refers to a variety of structural deficiencies, such as large holes and leaks or the absence of basic features \nincluding plumbing, electricity, water, or heat. HUD classifies units as moderately or severely inadequate depending on the type and \nnumber of these physical problems. Black, Asian, and white householders are non-Hispanic. Hispanic householders may be of any race. \nSource: JCHS tabulations of US Department of Housing and Urban Development, 2021 American Housing Survey.\nFigure 15\nRenters with Lower Incomes and Those of Color Disproportionately Live in Inadequate Housing\nShare of Renters in Inadequate Housing (Percent)\nproject-based assistance programs has left 1 in 10 \nrenters living in public housing or HUD-assisted private \nmultifamily housing with inadequate conditions. \nDespite inspection standards, 11 percent of renters \nwith Housing Choice Vouchers lived in inadequate \nconditions in 2021.\nBlack and Hispanic households are more likely to live \nin inadequate housing, a product of long-standing \ndiscriminatory policies and practices that have often \nsteered households of color to neighborhoods with \nolder and less-adequate housing. In 2021, 10 percent \nof Black and Hispanic renter households lived in inad­\nequate housing, well above the shares for white (7 \npercent) and Asian households (6 percent). These \ndisparities persist even after accounting for differences \nin income. A HUD report also found that American \nIndian and Alaska Native households dispropor­\ntionately experience poor housing quality, including \nunits with structural problems, system deficiencies, \nand overcrowding.\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n23\n\n\n\n--- Page 26 ---\nEven among units that meet the criteria for phys­\nical adequacy, many have significant problems that \nimpact occupant health and safety. A 2023 study by \nthe Federal Reserve Bank of Philadelphia found that \nin 2022, 37 percent of renter-occupied units had at \nleast one critical home repair need, such as fixing a \ncracked foundation, replacing broken equipment, or \nremediating mold, and estimated the total cost of \naddressing these deficiencies at $51.5 billion.\nEven the structurally adequate stock does not typi­\ncally meet the needs of people with disabilities. In \n2019, 4 percent of renter households reported diffi­\nculties entering or navigating their homes, including 18 \npercent of renters age 80 and over, as reported in the \nAmerican Housing Survey. And nearly half of renters \nwith disabilities said their homes were minimally or \nnot at all accessible, according to a 2023 Freddie Mac \nsurvey. Given the aging of both the rental stock and \nthe nation’s population, there is an urgent and growing \nneed to repair or modify existing units to ensure habit­\nability, safety, and accessibility.\nExposure to Disasters Threatens the \nRental Stock\nEnvironmental hazards such as wildfires, flooding, \nearthquakes, and hurricanes increasingly jeopar­\ndize the health and safety of renters and threaten to \ndamage or destroy housing. About 41 percent of the \nnation’s occupied rental stock (18.2 million units) is \nlocated in areas exposed to substantial weather- and \nclimate-related threats as measured by expected \nannual economic losses for multiple hazards, \naccording to the Federal Emergency Management \nAgency’s National Risk Index.\nThese areas are geographically diverse, reflecting the \nvariety of acute and chronic environmental hazards \nthat impact every part of the country (Figure 16). Cali­\nfornia has the most rental units located in census tracts \nwith at least moderate expected annual economic \nlosses caused by hazards. There, 4.6 million units—77 \npercent of the state’s rental stock—are at risk of \ndamage or destruction, followed by Florida, with 2.4 \nmillion units (89 percent) at risk.\nNumber of Rental Units \nin High-Risk Counties\nUnder 2,000\n2,000–9,999\n10,000–19,999\n20,000 and Over (Up to 1.6 Million)\nNotes: High-risk areas have a relatively moderate, \nrelatively high, or very high expected annual loss \n(EAL) score. EAL represents the average economic \nloss in dollars resulting from natural hazards each \nyear. The number of units in high-risk counties is \naggregated from the tract level.\nSource: JCHS tabulations of Federal Emergency \nManagement Agency, July 2023 National Risk \nIndex EAL data, and US Census Bureau, 2021 \nAmerican Community Survey 5-Year Estimates.\nFigure 16\nMore Than 18 Million Rental Units Are Under Threat from Environmental Hazards\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n24\n\n\n\n--- Page 27 ---\nNationally, more than a third of units in small, midsize, \nand large multifamily buildings (35–40 percent) \nare located in census tracts with substantial annual \nlosses, as are 45 percent of single-family rentals \nand just over half of manufactured rentals. Because \nmanufactured housing units are the most likely to \nbe classified as physically inadequate, they may be \nespecially susceptible to damage or destruction from \ntheir hazard exposure.\nThe already limited supply of low-rent and feder­\nally subsidized units is also at risk. Indeed, 3.2 million \nunits with rents below $600 (38 percent) are in at-risk \nareas. An additional 1.2 million Low-Income Housing \nTax Credit units (40 percent) are at risk from envi­\nronmental hazards, along with 34 percent of proj­\nect-based HUD units. This includes 960,000 units that \nare public housing, Project-Based Section 8, affordable \nhousing for older adults, and supportive housing for \nhouseholders with disabilities. Also at risk are 200,000 \nunits (52 percent) subsidized by the US Department \nof Agriculture’s rural multifamily housing program. \nThe growing exposure to hazards will only compound \nthese units’ numerous preservation needs.\nNotably, newer rental units are much more likely to be \nvulnerable to weather- and climate-related hazards. \nNearly half of rentals built in 2000 or later are located \nin areas with substantial losses, double the 24 percent \nof rentals built before 1940. Still, those built before \n1940 have the highest rate of physical inadequacy of \nany rental units, so they may be more vulnerable to \ndamage caused by environmental hazards.\nAs a growing number of rental units are damaged by \nenvironmental hazards, the cost to repair and rebuild \nhomes will increase, as will the insurance costs in high-\nrisk areas. At the same time, the escalating frequency, \nseverity, and diversity of disasters, coupled with the \nmagnitude of their likely damages, will necessitate \ngreater investments in pre-disaster mitigation and \nclimate adaptation strategies for both properties and \nregions. Otherwise, the increasing incidence of costly \ndisasters will almost certainly render an increasing \nnumber of rental units uninhabitable, forcing resi­\ndents to relocate and threatening to further reduce \nthe supply of rental housing.\nThe Outlook\nWith more supply coming online across the country, the \nrental stock is likely to expand, though with a changing \ncomposition. A growing share of the rental stock is \nmore expensive units in larger buildings. New construc­\ntion is furthering this trend by increasingly targeting \nthe high end of the market. In contrast, the supply of \nunits in small multifamily buildings—which tend to \nhave lower median rents—remains largely unchanged.\nThe shifting composition, coupled with the high cost \nof new construction and the deep need at the lower \nend of the market, suggests that new market-rate \nsupply alone will do little to bring immediate relief to \nthose with lower incomes. For these households, the \nnumber of affordable options is declining as low-rent \nunits are demolished, converted to owner-occupancy, \nor repriced at higher rents.\nMoreover, the lack of diverse rental options in many \nsuburban communities constrains where households \ncan choose to live. Regulatory barriers restrict the \namount of multifamily housing that can be built in \nneighborhoods with few rental opportunities.\nAdditionally, the existing stock requires significant \ninvestment. The level of structural inadequacy has \nnot improved in decades, and critical repairs and \nreplacements are imperative to ensure that the units \nare of decent quality. Further, steps must be taken to \nmitigate the impact of climate-related hazards on \nlow-rent and subsidized units while reducing the loss of \nthe stock and preserving its affordability. Finally, there \nis an urgent need to make accessibility modifications \nin response to the nation’s rapidly aging population. \nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n25\n\n\n\n--- Page 28 ---\nRENTAL\nMARKETS \nA steady stream of new supply and stabilizing demand have cooled rental markets from their pandemic-induced \nfrenzy. As vacancy rates have risen from historic lows, rent growth has plummeted from its record-breaking \npace. While multifamily housing completions remain near historic highs, construction starts are slowing as \ninterest rates rise. The increasing costs of debt and equity have dampened multifamily performance and raised \nexpenses for apartment operators. Nevertheless, the relatively strong performance of multifamily properties \nover the longer term has attracted new investors to the rental market.\nRent Growth Cools as Vacancies Rise \nRobust new supply and stabilizing demand have \nbrought rent growth to a near standstill. Rents for \nprofessionally managed apartments grew just 0.4 \npercent annually in mid-2023. This is a dramatic turn­\naround from the prior year when apartment rents \nincreased by a record-breaking 15.3 percent year \nover year. The current pace is more than 3 percentage \npoints below the 3.6 percent pace averaged in the five \nyears leading up to the pandemic. \nRent growth slowed across property classes. For higher-\nquality Class A units, rent growth decelerated from a \nrecord-breaking 18.5 percent annual pace in early 2022 \nto just 0.8 percent in the third quarter of 2023. Similarly, \nrents for Class B and Class C apartments grew annu­\nally by just 0.1 percent and 0.7 percent, respectively, in \nthe third quarter of 2023—down from 16.1 percent and \n8.5 percent at the beginning of 2022.\nRents for single-family units also slowed, according to \nthe CoreLogic Single-Family Rent Index. In this market \nsegment, rents grew just 2.9 percent year over year \nin August 2023, significantly below the record-high \ngrowth of more than 14 percent in 2022 and similar \nto the pre-pandemic annual growth rate. Further, the \nConsumer Price Index for rent of primary residence, \nwhich covers the entire rental stock and is slow to \nregister changes, decelerated in mid-2023 from a \nfour-decade high of 8.8 percent in March 2023 to 7.2 \npercent in October 2023. \nThe slowdown in apartment rent growth was \ngeographically widespread. In the third quarter of 2023, \njust 1 percent of markets experienced rent growth of \nat least 10 percent annually, down from 50 percent of \nmarkets a year earlier. Instead, the majority of markets \n(61 percent) experienced only moderate rent growth \nunder 5 percent, as compared to just 4 percent of \nmarkets in the prior year. And whereas not a single \nmarket reported negative rent growth in mid-2022, \nrents declined in 32 percent of markets in mid-2023. \nThe areas with the fastest-growing rents in the third \nquarter of 2023 include many less expensive markets \nin the South, Midwest, and Northeast, such as Midland \n-Odessa, Madison, Champaign-Urbana, Trenton, and \nSpringfield, Massachusetts, where apartment rents \ngrew by at least 6 percent annually. In contrast, the \nbulk of the markets with declining rents was in the West \nand South, with year-over-year decreases of at least 4 \npercent in Boise, Phoenix, Austin, and Las Vegas. Simi­\nlarly, single-family rent growth was lowest or negative \nin metros in the West and South, including Las Vegas, \nMiami, and Austin. While slowing rent growth may help \n04\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n26\n\n\n\n--- Page 29 ---\nto address the affordability crisis, any relief will only be \nincremental, given that rents mostly remain elevated \ncompared to pre-pandemic levels. \nSome of the slowing rent growth is attributable to \nrising vacancy rates. Nationally, the rental vacancy \nrate reached 6.6 percent in the third quarter of 2023, \naccording to the Census Bureau’s Housing Vacancy \nSurvey. After falling to a pandemic low of 5.6 percent \nrecorded in late 2021, the recent vacancy rate was on \npar with the 6.9 percent rate averaged in the five years \npreceding the pandemic. \nRealPage data show an even more dramatic shift \nfor professionally managed apartments (Figure 17). \nThe vacancy rate for these rental units climbed to 5.5 \npercent in the third quarter of 2023, a sharp turnaround \nfrom early 2022, when surging demand brought the \nvacancy rate to a record low of just 2.5 percent in the \nfirst quarter. Since then, vacancy rates for professionally \nmanaged apartments have increased fastest in the \nSouth (up 3.5 percentage points, to 6.3 percent) and the \nWest (up 2.9 percentage points, to 5.2 percent). Nation­\nally, vacancies are somewhat higher in the most expen­\nsive Class A market segments since a large volume of \nnewly constructed units was added to the stock. \n0\n1\n2\n3\n4\n5\n6\n7\n2015\n2016\n2017\n2018\n2019\n2020\n2021\n2022\n2023\nUS\nNortheast\nMidwest\nSouth\nWest\nNote: Vacancy rates are four-quarter trailing averages for \nprofessionally managed apartments in buildings with five  \nor more units. \nSource: JCHS tabulations of RealPage data.\nFigure 17\nApartment Vacancy Rates Are Rising Every-\nwhere, Most Dramatically in the South\nApartment Vacancy Rate (Percent)\nHigh Interest Rates Constrain \nMultifamily Financing\nThe recent uptick in interest rates from their historic \nlows is cooling rental market activity. The interest rates \nfor fixed-rate multifamily loans are often anchored \nto the yield for 10-year Treasury notes. In the second \nquarter of 2023, the yield rate on these Treasuries was \n3.6 percent, nearly 3 percentage points above the rate \nrecorded in the first year of the pandemic and the \nhighest since the Great Recession. As a result, apart­\nment mortgage rates jumped to 5.5 percent for 7- and \n10-year fixed-rate loans in June 2023, according to \nMSCI—an increase of more than two percentage points \nfrom October 2021.\nRising interest rates increase the cost of the debt that \ninvestors and developers use to acquire and build \nmultifamily properties. At the same time, high Treasury \nyields increase the cost of equity, as investors require \nhigher returns to compete with lower-risk Treasury \nnotes. Consequently, it becomes harder to make proj­\nects financially feasible. To make the same project \nwork with an equal rate of return in a high interest rate \nenvironment, property developers and owners would \nneed more revenue to offset the increased capital \ncosts, meaning rents would need to be higher. \nLenders typically want properties to have a debt \nservice coverage ratio—the ratio of total monthly net \nincome to total monthly debt service payments—of at \nleast 1.2. However, the high cost of debt in 2023 has, all \nelse being equal, pushed down debt service coverage \nratios, making it more difficult for developers to qualify \nfor the same amount in loans. Knowing they would \nlikely be declined, potential borrowers have pulled \nback from even applying for financing. More than half \nof the banks surveyed by the Federal Reserve noted \nthat demand for multifamily loans has decreased. \nAdditionally, uncertainty about apartment perfor­\nmance and the broader economy has tightened \nmultifamily underwriting among nearly two-thirds \nof the surveyed banks. \nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n27\n\n\n\n--- Page 30 ---\nThe slowdown in borrowing and lending has been \nsubstantial. According to the Mortgage Bankers \nAssociation (MBA), multifamily mortgage orig­\ninations dropped 48 percent year over year in the \nsecond quarter of 2023. With declining originations, \nthe amount of multifamily debt outstanding increased \nby less than $30 billion in the second quarter to $2.03 \ntrillion, the weakest second-quarter showing in four \nyears (Figure 18). \nNevertheless, the sources of multifamily lending \nhave remained relatively stable. The government-\nsponsored entities Fannie Mae and Freddie Mac \ncontinued to hold nearly half of all multifamily mort­\ngage debt and posted the largest quarterly gain of any \ninvestor group in mid-2023. Banks and thrifts increased \ntheir holdings at about half the rate of Fannie Mae and \nFreddie Mac but still held 30 percent of multifamily \nmortgage debt. Meanwhile, mortgage debt held in \ncommercial mortgage-backed securities (CMBS) \nmade up just 3 percent of the market. \n0\n10\n20\n30\n40\n50\n60\n2015\n2016\n2017\n2018\n2019\n2020\n2021\n2022\n2023\nQuarterly Change\nAverage Change (4-Quarter Trailing)\nSource: JCHS tabulations of Mortgage Bankers Association data.\nFigure 18\nMultifamily Mortgage Flows Are Slowing\nMultifamily Mortgage Debt Outstanding (Billions of Dollars)\nMultifamily Starts Slow as \nCompletions Remain High\nMultifamily construction is slowing in the face of soft­\nening rent growth and rising vacancy and interest \nrates. After averaging 536,000 units in the first six \nmonths of 2023, multifamily starts slowed to a season­\nally adjusted annual rate of 402,000 units in October \n2023. Though this marked a 30 percent decline from \nthe pace one year earlier, starts are decreasing from \nextremely high levels and remain relatively robust. \nWhile multifamily starts are cooling, the single-family \nbuilt-for-rent sector has remained strong. A small \nshare of new single-family construction is built specif­\nically for the rental market. However, the number has \ngrown steadily over the last decade, with an espe­\ncially large uptick during the pandemic. In 2022, 69,000 \nsingle-family rental homes were started, a 77 percent \nincrease over 2019. In the third quarter of 2023, single-\nfamily rental starts hit a new record high with an annual \nrate of 70,000 homes. \nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n28\n\n\n\n--- Page 31 ---\nMultifamily units already under way also continue to \ncome online at historically high numbers (Figure 19). \nOn a seasonally adjusted annualized basis, 436,000 \nmultifamily units were completed in the third quarter \nof 2023, up 30 percent from pre-pandemic levels. This \nhas helped to maintain the steady flow of comple­\ntions despite the slowdown in starts. On a seasonally \nadjusted basis, the number of multifamily units under \nconstruction reached a record high of 1.0 million units \nin July 2023 that continued through October 2023. \nThough the slowdown in multifamily starts could lead \nto supply challenges in the coming years, the huge \npipeline of units currently under construction has the \npotential to ease rents in the near term. Research \nby RealPage suggests that new supply puts down­\nward pressure on rent growth in markets where \nnew units are added. In several geographies where \nnew supply increased at a rate above the national \naverage in 2023, rent growth notably cooled. Apart­\nment absorption—the difference between the number \nof households moving in and the number moving \nout—increased in mid-2023, which suggests that new \nsupply is accommodating new households while still \nallowing rents to moderate. \n0\n100\n200\n300\n400\n500\n600\n700\n800\n900\n1,000\n1982\n1984\n1986\n1988\n1990\n1992\n1994\n1996\n1998\n2000\n2002\n2004\n2006\n2008\n2010\n2012\n2014\n2016\n2018\n2020\n2022\nStarted\nUnder Construction\nCompleted\nNote: Data for 2023 represent the seasonally adjusted year-to-date average through October.\nSource: JCHS tabulations of US Census Bureau, New Residential Construction data. \nFigure 19\nCompletions Remain High and a Record Number of Units Are Under Construction\nMultifamily Units (Thousands)\nConstruction Delays and Costs\nAre Increasing\nWhile there is a healthy level of new supply under \nconstruction, the question of when it will come online \nremains unanswered as extended construction time­\nlines become increasingly common. The average \nnumber of months from start to completion for multi­\nfamily buildings reached 17.0 in 2022, up from 15.4 in \n2021 and 10.8 in 2012. Between 2021 and 2022, the time \nto complete single-family homes increased from 7.2 to \n8.3 months. A survey of construction and development \nfirms conducted by the National Multifamily Housing \nCouncil in September 2023 found that 88 percent of \nrespondents reported construction delays.\nSuch interruptions can add to the cost of new devel­\nopment, as do the rising costs of labor and materials. \nIn the second quarter of 2023, the employment cost \nindex for private industry construction workers was \nup 5 percent from the prior year and 14 percent since \nthe start of the pandemic. The price of all inputs to \nnew residential construction, excluding capital invest­\nment, labor, and imports, also increased, up 35 percent \nsince March 2020—more than triple the growth rate in \nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n29\n\n\n\n--- Page 32 ---\nthe equivalent period before the pandemic. The cost \nof ready-mix concrete, lumber, and brick and clay \nstructural tile each rose by at least 25 percent after \nthe pandemic, with even steeper price increases for \ngypsum (41 percent) and plastic construction products \n(35 percent). \nIn response to both rising costs and the growing \ndemand from higher-income renters, new rental \nunits increasingly target the high end of the market. \nConstruction remains highly concentrated in large \nmetros, where land is most expensive. The NAHB Home \nBuilding Geography Index indicates that 69 percent of \nmultifamily permitting in the second quarter of 2023 \nwas in large metro areas. Reflecting these trends, \nasking rents for new units continue to climb. In the \nsecond quarter of 2023, the median asking rent for \nnew units was $1,760, up 39 percent from the second \nquarter of 2014, according to the Survey of Market \nAbsorption. Between 2015 and 2022, the share of newly \ncompleted units with asking rents of at least $2,050 \nnearly doubled, to 37 percent. In the same period, the \nshare of units with asking rents below $1,050 declined \nby two-thirds, to just 7 percent. This shift in new \nconstruction toward higher-cost apartments means \nmany units are unaffordable to households with low \nand moderate incomes. Whether this new supply will \nimprove affordability for these households in the longer \nterm remains to be seen.\nProperty Performance Weakens\nApartment operators’ cash flow has slowed, not \nonly because of decelerating rent growth but also \nbecause of increased operating costs and insurance \npremiums. According to Yardi Matrix, national total \noperating expenses for multifamily properties rose \nby 9.3 percent in the 12 months ending in June 2023. \nAdditionally, Trepp reported that property insurance \ncosts increased 13.6 percent annually for multifamily \nproperties in large metro areas in 2022. Consequently, \nnet operating incomes for apartments grew by just 3.5 \npercent annually in the third quarter of 2023, according \nto data from the National Council of Real Estate Invest­\nment Fiduciaries. This was a substantial deceleration \nfrom the pandemic high of 24.8 percent in late 2021 \nand put the pace of net operating income growth well \nbelow the 5.3 percent annual rate averaged in the five \nyears preceding the pandemic.\nAgainst this backdrop, apartment capitalization \nrates—the net operating income divided by the prop­\nerty price—have gradually risen. According to Moody’s \nAnalytics, cap rates fell through 2022 before rising by \n0.9 percentage points over the first three quarters of \n2023 to 5.8 percent. With the high interest rates on \n10-year Treasuries, the cap rate spread was just 1.6 \npercentage points, considerably lower than the 3.5 \npercentage point spread averaged between 2015 \nand 2019. Multifamily properties have thus become \na somewhat less attractive investment than before \nthe pandemic. \nRising cap rates are pushing apartment property \nprices down. According to Real Capital Analytics data, \napartment prices fell year over year at the beginning \nof 2023 for the first time since 2010 and were down 13 \npercent annually by the third quarter (Figure 20). This \nwas a substantial turnaround from the peak 23 percent \nprice growth posted at the beginning of 2022. \nAlong with apartment prices, transaction volumes \ncooled in 2023 as potential buyers and sellers paused \namid uncertainty about property performance and \nrising interest rates. According to MSCI, apartment \nsales transaction volumes declined by 72 percent \nin mid-2023 from the prior year. The 2023 second-\nquarter volume was less than 25 percent of the $165 \nbillion peak volume reached at the end of 2021, and \napproximately half of the $42 billion averaged quar­\nterly between 2015 and 2019. \nRisk of Delinquencies Grows\nAs net operating income growth slows, the risk of \ndelinquencies is increasing. So far, the composition \nof multifamily financing and the pre-pandemic period \nof rapidly accruing equity have staved off widespread \ndefaults. Currently, the most at-risk properties are \nthose with shorter-term loans taken out in the last two \nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n30\n\n\n\n--- Page 33 ---\n0\n100\n200\n300\n-15\n-10\n-5\n0\n5\n10\n15\n20\n25\n30\n2015\n2016\n2017\n2018\n2019\n2020\n2021\n2022\n2023\nChange in Apartment Prices\nIndexed Apartment Prices (Right Scale)\nNotes: Apartment prices are indexed to January 2015. Indexed values represent cumulative percent change.\nSource: JCHS tabulations of Real Capital Analytics, Commercial Property Price Indexes.\nFigure 20\nApartment Property Prices Have Fallen from Record Highs\nYear-over-Year Change (Percent)\t\nIndex Value\nyears that leave borrowers little chance to build equity \nbefore the loan matures. These loans are more likely \nto be held by banks, by investor-driven lenders, or in \nCMBS. The 30-day delinquency rate for CMBS loans has \nmoved upward for three consecutive quarters, hitting \n3.8 percent in the second quarter of 2023, according to \nMBA. However, CMBS are a small share of all multifamily \nloans. Further, the most recent delinquency rate is only \nslightly higher than the pre-pandemic average. Much \nof the increase has been driven by other commercial \nproperty types, such as retail, hotels, and offices. \nLonger-term loans that have fewer near-term matur­\nities make up the largest share of multifamily loans. The \n60-day delinquency rates for loans held by Fannie Mae \nand Freddie Mac rose slightly in the second quarter \nof 2023 to 0.37 percent and 0.21 percent, respectively. \nStill, delinquencies remain low. Commercial and multi­\nfamily loans by banks and thrifts followed the same \ntrend, with a 90-day noncurrent rate of 0.67 percent \nin the second quarter of 2023, up from 0.56 percent in \nthe first quarter of 2022. While increasing, these delin­\nquency rates nonetheless remain much lower than \nthe 4 percent rate recorded in the years following the \n2008 housing market crash. \nIn the event that slowing returns do lead to a greater \nuptick in delinquencies, new opportunities may \nemerge for potential property buyers to acquire a \nbuilding at a more favorable price, in turn freeing up \ncapital that they can then invest in the apartments. \nMeanwhile, property owners facing financial distress \nmight otherwise cut back on maintenance and repair, \nto the detriment of renters.\nOwnership of Rental Properties Shifts\nDespite the slowdown in rent growth and low cap rate \nspread, rental housing remains a popular investment \noption, offering a relatively good return compared to \nother commercial real estate asset classes. Although \ninvestor activity has lessened in the short term, the \nstrong and sustained performance of multifamily \nproperties over the past two decades has attracted \nnew investors. Most rental properties are still owned \nby individuals. But the healthy track record of return \non rental investment has also encouraged the profes­\nsionalization of smaller landlords, who are increasingly \nforming limited liability partnerships (LLPs) and limited \nliability companies (LLCs). \nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n31\n\n\n",
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        "text": "--- Page 34 ---\nThe share of rental properties owned by nonindividual \ninvestors, including LLPs, LLCs, real estate corpora­\ntions, and similar entities, keeps growing. Between 2001 \nand 2021, these investors increased their ownership \nshare by 9 percentage points, to 27 percent of rental \nproperties, according to the Rental Housing Finance \nSurvey (Figure 21). \nThe growth in ownership by nonindividual investors \nhas been especially swift among small multifamily \nproperties, for which these investors have historically \nbeen absent. Between 2001 and 2021, the share of 2- \nto 4-unit multifamily properties owned by nonindi­\nvidual investors increased by 17 percentage points, to \n32 percent. During the same period, the share of 5- to \n24-unit properties owned by nonindividual investors \nnearly doubled, to 67 percent. Among large rental \nproperties, nonindividual ownership shares are signifi­\ncantly higher. Nonindividual ownership of rental prop­\nerties with at least 50 units increased by 6 percentage \npoints since 2001, to 93 percent, and by 17 percentage \npoints, to 83 percent ownership of properties with 25 \nto 49 units. \nWhile nonindividual investors are somewhat less \nactive in the single-family rental market, they have \ngained market share here, too. Over the last two \ndecades, their ownership of single-family rentals \nincreased by 8 percentage points, to 25 percent. The \nscale at which these investors operate may affect \ntheir strategies. Larger institutional investors tend to \npurchase newer and bigger single-family rentals in \nareas with fast-growing populations and rapid rent \ngrowth. By comparison, smaller institutional investors \nare more likely to purchase smaller, older, and less \nexpensive properties. \nEven as the share of single-family rental homes owned \nby nonindividual investors has grown, overall investor \nactivity in this market has recently declined. This slow­\ndown is a response to both the current interest rate \nenvironment and uncertainty about rental property \nperformance, prompting some investors to opt for \nother asset classes. Redfin data show that single-\nfamily home purchases by institutions or businesses \nfell 30 percent annually in the third quarter of 2023. This \nis the largest third quarter decline since 2016, aside \nfrom the first quarter of 2023, when activity dropped \neven more sharply. Whether the presence of inves­\ntors in the single-family rental market will continue to \ngrow depends largely on the availability of homes to \npurchase, the interest rate environment, the strength \nof other investment returns, and the steadiness of the \ndemand for rental housing.\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n32\n0\n10\n20\n30\n40\n50\n60\n70\n80\n90\n100\n1 Unit\n2-4 Units\n5-24 Units\n25-49 Units\n50 Units or More\nTotal\nNumber of Units in Property\n2001\n2021\nNote: Nonindividual investors include partnerships, trustees for estate, real estate corporations, real estate investment trusts, nonprofit \norganizations, and other entities. \nSource: JCHS tabulations of US Census Bureau, Rental Housing Finance Surveys.\nFigure 21\nNonindividual Investors Own a Growing Share of Rental Properties\nShare of Properties Owned by Nonindividual Investors (Percent)\n\n\n\n--- Page 35 ---\nRising operating \nand insurance costs \nwill challenge rental \nhousing providers.\nThe Outlook\nWith demand stabilizing and a large volume of new \napartments coming online, rent growth will likely \nremain slower than the frenzied pace of the early \npandemic years, helping to cool overall inflation and \nrelieve some of the pressure on household budgets. \nThe robust multifamily construction pipeline may \nfurther moderate rent growth as new units hit the \nmarket. Even so, asking rents will likely remain above \npre-pandemic levels. And the new supply will continue \nto target the high end of the market as construction \ncosts rise. As a result, the forthcoming units will do \nlittle to solve the immediate affordability needs of \nlower-income households.\nAdditionally, high interest rates present a considerable \nchallenge for the apartment industry. As the costs of \ndebt and equity rise, ensuring that deals are profitable \nhas become increasingly difficult. New construction \nand property transactions have shown signs of slowing \nas developers and buyers wait for greater economic \ncertainty and a more favorable financing environment. \nThese dynamics are likely to persist, given the expec­\ntation that interest rates will remain high for at least \nthe near term. If construction continues to slow and \nthe supply once again constricts relative to demand, \nthe affordability gains achieved at the high end of the \nrental market could be lost. \nIncreased operating and insurance costs will also \ncontinue to challenge housing providers, especially \nthose that are small scale or operate subsidized apart­\nments and smaller rental properties. In the face of \nfalling returns, housing providers may be less able to \nafford urgently needed repairs to the aging stock and \npreserve low-rent and assisted units. \nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n33\n\n\n\n--- Page 36 ---\nRENTAL \nAFFORDABILITY\nThe number of renters living in unaffordable housing has reached an all-time high and includes households \nacross the income spectrum and around the country. The growing shortage of units affordable to renters with \nthe lowest incomes is only worsening the affordability crisis. Though rent increases have leveled relative to \nthe pandemic spike, rents remain elevated and are straining household balance sheets. Inflation has further \nchallenged renters. Many lower-income households are struggling to cover basic needs and are confronting \ndifficult trade-offs that threaten their financial stability and overall well-being. \nCost Burdens Have Hit \nUnprecedented Heights\nCost burdens have reached record highs, fueled by \nrapidly rising rents during the pandemic. In 2022, the \nnumber of renter households spending more than \n30 percent of income on rent and utilities reached \n22.4 million, up from 20.4 million in 2019. Alarmingly, \nthe number of severely cost-burdened renter house­\nholds—those spending more than half of their income \non housing and utilities—also hit an all-time high of \n12.1 million in 2022, a full 1.5 million households above \npre-pandemic levels. \nThese recent increases stand in stark contrast to the \nmodest declines in cost burdens recorded before \nthe pandemic. Between 2014 and 2019, the number \nof cost-burdened renter households fell by about \n883,000, stemming from a substantial decrease \nin severe burdens. However, in the aftermath of the \npandemic surge, the record-high number of cost-bur­\ndened households in 2022 exceeded the 2014 pre-pan­\ndemic peak by nearly 1.1 million and marked a 7.6 million \nincrease over the low posted in 2001.\nNot only has the number of cost-burdened renters \ngrown, so has their share of the total renter popu­\nlation. In 2022, half of renter households were cost \nburdened, up 3.2 percentage points since 2019 and \n9.0 percentage points since 2001. Likewise, the share \nof severely burdened renter households rose quickly \nduring this period, from 24 percent in 2019 to 27 percent \nin 2022, 6.3 percentage points above the 2001 low. \nCost Burdens Are Climbing the \nIncome Scale\nRenter households at all income levels have expe­\nrienced rising cost-burden rates over the last two \ndecades (Figure 22). The pandemic accelerated this \ntrend. In recent years, cost-burden rates hit record \nhighs across all income groups. Middle-income renters \nhave especially felt the pain of increasing housing \ncosts. Just over two-thirds (67 percent) of house­\nholds earning $30,000 to $44,999 per year were cost \nburdened in 2022, an increase of 2.6 percentage points \nfrom 2019 and a shocking 15.1 percentage points above \n2001 levels. \n05 \nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n34\n\n\n\n--- Page 37 ---\n0\n10\n20\n30\n40\n50\n60\n70\n80\n90\n2001\n2019\n2022\n2001\n2019\n2022\n2001\n2019\n2022\n2001\n2019\n2022\n2001\n2019\n2022\nHousehold Income\nAll Renter Households\n$75,000 and Over\n$45,000-$74,999\n$30,000-$44,999\nUnder $30,000\nSeverely Cost Burdened\nModerately Cost Burdened\nNotes: Household incomes are adjusted for inflation using the CPI-U for All Items. Moderately (severely) cost-burdened households \nspend 30–50% (more than 50%) of income on rent and utilities. Households with zero or negative income are assumed to have severe \nburdens, while households that are not required to pay rent are assumed to be unburdened. \nSource: JCHS tabulations of US Census Bureau, American Community Survey 1-Year Estimates.\nFigure 22\nCost Burdens Continued to Increase Across Incomes During the Pandemic\nShare of Renter Households (Percent)\nRenter households with annual incomes of $45,000 \nto $74,999 have seen the fastest growth in their \nburden rates, both over the longer term and during \nthe pandemic. Indeed, 41 percent of renter households \nin this income category were burdened in 2022, a \n5.4 percentage point increase since the start of the \npandemic, nearly doubling their 2001 rate. \nEven many renter households earning at least $75,000 \nannually have felt increased financial strain. Cost-\nburden rates for this income bracket have risen 2.2 \npercentage points since the start of the pandemic and \n6.4 percentage points over the longer two-decade \nsweep. Still, cost-burden rates for this group remain \nrelatively low at just 11 percent. \nMost concerning is the rapid increase in cost burdens \namong lower-income renter households, a group that \nalready had a high burden rate. The share of cost-bur­\ndened renter households earning less than $30,000 \nannually rose 1.5 percentage points from 2019 to 2022. \nWhile this increase is notable for any group, these \nrenters have consistently grappled with widespread \nand persistent housing hardships. From 2001 to 2019, \nthe cost-burden rate among renter households with \nlower incomes hovered between 77 and 82 percent. \nIn 2022, 83 percent of these households were cost \nburdened, with the majority (65 percent) experiencing \nsevere burdens, marking yet another all-time high. The \nnew rental stock is unlikely to bring immediate relief \nto these households because the bulk of these units \ncharges high rents. \nDisparities in Cost Burdens Persist\nWhile overall cost-burden rates are high, some demo­\ngraphic groups experience higher rates than others. \nLong-standing discrimination in housing, employment, \nand education has contributed to disproportionately \nhigh cost-burden rates for renter households headed \nby a Black, Hispanic, or multiracial person. In 2022, \nmore than half of Black (57 percent), Hispanic (54 \npercent), and multiracial (50 percent) households \nwere cost burdened, while rates were lower for white \n(45 percent), Asian (44 percent), and Native American \n(44 percent) households. \nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n35\n\n\n\n--- Page 38 ---\nEven accounting for income, households headed \nby a white person were more likely to find afford­\nable housing than those headed by most people of \ncolor. Among households with annual incomes under \n$30,000, cost-burden rates are highest for those \nheaded by a Hispanic (87 percent), Asian (86 percent), \nBlack (85 percent), or multiracial (84 percent) person, \nas compared to their white counterparts (80 percent). \nOnly lower-income households headed by a Native \nAmerican person fared better than white renter house­\nholds, with a cost-burden rate of 72 percent, though \nthese households face other housing challenges, \nincluding inadequate conditions and overcrowding.\nCost burdens also vary by age and are most common \namong the youngest and oldest renters, many of \nwhom have lower incomes than individuals in their \nprime earning years. In 2022, a stunning 61 percent \nof renter households headed by someone under age \n25 were cost burdened, including 37 percent with \nsevere burdens. Unsurprisingly, the cost-burden rate \ndropped substantially for renter households in their \nprime earning years, to about 45 percent for those \nheaded by someone aged 25–54. Still, even among \nthis subset, nearly a quarter are severely burdened. \nThe rate then begins to rise again, increasing slightly \nto 49 percent for households headed by someone \naged 55–64, including 28 percent with severe burdens, \nand continues upward. Fully 57 percent of renter \nhouseholds headed by someone age 65 and over \nwere cost burdened, with 34 percent experiencing \nsevere burdens. \nAcross all age groups, cost-burden rates are higher \namong renters with disabilities, as workplace chal­\nlenges can limit employment options and earnings. \nIn fact, 60 percent of renter households headed by \nsomeone with a disability were cost burdened in 2022, \na whopping 13 percentage points higher than their \ncounterparts who did not have a disability. The finan­\ncial burden is especially significant for young adult \nrenters with disabilities. Among those under age 25, \ntwo-thirds were cost burdened.\nEven many fully employed households struggle \nwith housing costs. Just over a third—8.0 million—of \nthe renter households headed by a full-time, year-\nround worker were cost burdened in 2022 (Figure 23). \n0\n10\n20\n30\n40\n50\n60\nPersonal\nCare\nFood\nPreparation\nHealthcare\nSupport\nSales\nConstruction\nEducation\nSocial\nService\nHealthcare\nPractitioner\nBusiness\nAll\nOccupations\nOccupation Types\nNotes: Fully employed householders reported working at least 35 hours per week for at least 50 weeks of the previous year. All \noccupations includes households in occupations not shown. Cost-burdened households spend more than 30% of income on rent and \nutilities. Households with zero or negative income are assumed to be burdened, while households that are not required to pay rent are \nassumed to be unburdened.\nSource: JCHS tabulations of US Census Bureau, 2022 American Community Survey 1-Year Estimates.\nFigure 23\nFully Employed Renters in a Range of Occupations Are Cost Burdened\nShare of Fully Employed Renters with Cost Burdens (Percent)\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n36\n\n\n\n--- Page 39 ---\nRenters working in personal care (including child­\ncare workers, fitness trainers, and hairstylists) or in \nfood preparation occupations were especially likely \nto spend an outsize portion of their income on rent. \nMore than half of renter householders working full time \nin these occupations were cost burdened, including \nabout a quarter who were severely burdened. \nOf course, occupations and earnings are related to \neducation, a dynamic reflected in cost-burden rates \nas well. In 2022, the burden share among renter house­\nholds headed by someone with at least a college \ndegree was 39 percent—more than 19 percentage \npoints lower than the 59 percent of cost-burdened \nhouseholds headed by someone who lacked either a \nhigh school diploma or a GED.\nDifferences in cost-burden rates are also influenced by \nboth the number of potential earners in a household \nand the amount of space the household requires. With \njust one earner and the need for more bedrooms to \naccommodate children, single-parent renter house­\nholds had the highest cost-burden rate in 2022 at 62 \npercent. Because so many renter households consist \nof just one individual, single-person households \naccounted for nearly half of all cost-burdened renters. \nDespite the need for less space, 58 percent of single-\nperson households were cost burdened. Meanwhile, \na third of renters who were married without kids were \nburdened by housing costs, making this household \ntype most likely to live in affordable housing.\nAffordability Is Worsening Across \nthe Country\nGiven the enormous number of renters struggling to \nafford housing, it is perhaps unsurprising that cost-\nburden rates are high across the country (Figure 24). \nIn some places, this is due to high rents. In others, \nit is a function of low incomes. For example, in the \nMidwest and the South, where median rents are \nlowest, cost-burden rates are still 46 percent and 50 \npercent, respectively, because median incomes are \nalso lower. Though renters in the Northeast and West \nhave higher median incomes, the cost-burden rates \nin these regions are similarly elevated at 50 and 52 \npercent because of high housing costs.\nShare of Renters with \nCost Burdens (Percent)\n37.0–39.9\n40.0-44.9\n45.0-49.9\n50.0–57.9\nNotes: Cost-burdened households spend \nmore than 30% of income on rent and \nutilities. Households with zero or negative \nincome are assumed to be burdened, while \nhouseholds that are not required to pay rent \nare assumed to be unburdened. \nSource: JCHS tabulations of US Census \nBureau, 2022 American Community Survey \n1-Year Estimates.\nFigure 24\nMore Than a Third of Renters Are Cost Burdened in Every State in the Country\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n37\n\n\n\n--- Page 40 ---\nThese same patterns emerge when cost burdens \nare examined by state. For instance, the cost-burden \nrate was 51 percent in both Louisiana and New Jersey \nin 2022, despite the states’ vastly different median \nincomes and rents. Florida, Hawaii, and Nevada \ntopped the list of the most unaffordable states, with \ncost-burden rates exceeding 55 percent. But, notably, \neven in the most affordable states, more than a third \nof renter households were cost burdened, and afford­\nability has worsened in all but seven states since the \nstart of the pandemic. \nThough renters are cost burdened in all types of \ncommunities across the country, shares are highest \nin the largest metros, where rents tend to be higher. \nMore than half (51 percent) of renter households living \nin the 56 metros with populations over 1 million were \nburdened by housing costs in 2022, with the highest \nrates in Miami, Honolulu, and Orlando. Since 2019, cost-\nburden rates in large metros have risen 3.5 percentage \npoints, increasing in all but one of the 56 large metros. \nConversely, places with smaller populations are rela­\ntively more affordable. Just under half of renters (49 \npercent) in midsize metros with populations between a \nquarter million and 1 million were cost burdened in 2022. \nIn these geographies, cost-burden rates increased by \n2.9 percentage points since the start of the pandemic. \nThe cost-burden share was slightly lower (45 percent) \nin small metros with populations under 250,000, where \nrates have risen by 2.6 percentage points during the \nsame period. Rural areas were the most affordable, \nwith 40 percent of renter households experiencing \ncost burdens, a 1.7 percentage point increase over \npre-pandemic levels. \nAlarmingly, most lower-income renter households \nstruggle to find housing they can afford in any commu­\nnity. Renters with the lowest incomes—those in the \nbottom fifth of the income distribution for a given \nmetropolitan area or for a state’s rural areas—expe­\nrience high cost-burden rates even in less expen­\nsive areas. In rural communities where cost-burden \nrates were lowest, 72 percent of these households \nwere burdened, with nearly half experiencing severe \nburdens. The share of lowest-income renters strug­\ngling with cost burdens increased with population size, \nreaching 86 percent in large metros. \nAffordable Supply Is Scarce\nA significant driver of the record-high cost-burden \nlevels is the large and increasing dearth of rental units \naffordable to households with the lowest incomes. \nAccording to HUD’s Worst Case Housing Needs: 2023 \nReport to Congress, there are 61 affordable units for \nevery 100 renter households that earn no more than \n30 percent of area median income. Of these units, \n40 percent were occupied by a household with an \nannual income above 30 percent of the area median, \nreducing the number of units available and afford­\nable to the most financially vulnerable to just 36 per \n100 households. \nNationally, the severe shortage of units both afford­\nable and available to households with extremely low \nincomes has only worsened over the last two decades. \nFrom 2001 to 2021, the number of extremely low-in­\ncome households increased by 3.6 million. Yet the \nrelevant supply rose by just 677,000 units during the \nsame period. As a result, the total shortfall in units \naffordable and available to these households rose \nfrom 4.9 million in 2001 to a record-high 7.8 million units \nby 2021. The pandemic further accelerated unit losses \nas the number of extremely low-income households \nclimbed, raising the total deficit by 823,000 units in \njust two years.\nThe affordable supply shortage is largest in central \ncities and high-density suburbs. In 2021, just 35 units \nin central cities and 30 units in high-density suburbs \nwere affordable and available for every 100 renters \nwith extremely low incomes. Low-density suburbs \nwere only slightly more affordable, with 43 units per 100 \nextremely low-income renter households. In contrast, \nrural communities had 54 units available for every \n100 renter households with extremely low incomes. \nHowever, the larger supply of affordable and avail­\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n38\n\n\n\n--- Page 41 ---\nable units in rural areas is offset somewhat by higher \nrates of physical inadequacy among rural rental units. \nExcluding inadequate housing, only 44 rentals were \naffordable and available for every 100 rural renters \nwith extremely low incomes.\nRising Housing Costs Are Consuming \nHousehold Incomes\nOver the last two decades, housing cost increases \nhave outpaced income gains for renters, straining \nhousehold balance sheets. Though median rents \nhave risen 21 percent in inflation-adjusted terms since \n2001, median annual income has risen just 2 percent \nduring the same period. Consequently, renters’ median \nresidual income—the amount of money available each \nmonth after paying for rent and utilities—was $2,600 \nin 2022, down 4 percent from 2001.\nRenters with lower incomes have been particularly \nhard-hit by rising housing costs. Residual incomes for \nthose making less than $30,000 dropped to an all-time \nlow of $310 per month in 2022, 47 percent below the \n2001 peak (Figure 25). Among these lower-income \nrenters, those with cost burdens fared even worse, with \na median residual income of just $170. \nThe high cost of rent has also diminished spending \npower for renters making $30,000 to $74,999 annually. \nSuch households had a median residual income of \n$2,700 each month, down 10 percent over two decades. \nIn contrast, residual incomes increased slightly for \nrenters earning at least $75,000 per year, consistent \nwith the nation’s widening income inequality. For these \nhouseholds, the monthly residual income in 2022 was \n$7,500, about a half percent above 2001 levels.\nWhile many higher-income households have been \nable to afford a comfortable standard of living, a large \nshare of renters have not. According to the Economic \nPolicy Institute, a single-person household in the \nnation’s most affordable counties would still need \nabout $2,000 each month in residual income to cover \n-50\n-40\n-30\n-20\n-10\n0\n10\n2001\n2004\n2007\n2010\n2013\n2016\n2019\n2022\nHousehold Income\n$30,000-$74,999\n$75,000 and Over\nUnder $30,000\nNotes: Household incomes and residual incomes are adjusted \nfor inflation using the CPI-U for All Items. Households that are \nnot required to pay rent are excluded. Data for 2020 are based \non 2019 and 2021 values because of pandemic data disruptions. \nSource: JCHS tabulations of US Census Bureau, American \nCommunity Survey 1-Year Estimates.\nFigure 25\nAfter Paying for Housing, Lower-Income Renters \nHave Less Money Left Over Than Ever Before\nChange in Residual Income Since 2001 (Percent)\nall other needs, an amount that far exceeds what most \nrenters have available after paying for rent and utilities. \nIndeed, 42 percent of renters have less than $2,000 in \nresidual income and, in many cases, much less. \nRapid inflation of both rents and consumer goods and \nservices over the last two years has further stretched \nhousehold budgets. According to the Household Pulse \nSurveys from June to October 2023, 63 percent of renter \nhouseholds reported their rents rose in the past year, \nwith 15 percent reporting increases of at least $250. \nThe vast majority of surveyed households also noticed \nprice increases for other goods in their communities \nin the preceding two months. \nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n39\n\n\n\n--- Page 42 ---\nThese price increases have been especially hard \non lower-income renters. About two-thirds of renter \nhouseholds earning less than $25,000 reported feeling \nstressed by rent hikes and inflation (Figure 26). Like­\nwise, just over 60 percent of Hispanic and Black house­\nholds were very stressed by inflation, compared to 54 \npercent of white and 41 percent of Asian households. \nAnd having children further compounded the financial \nstrain, with 67 percent of renters with children feeling \nstressed by price increases as compared to 51 percent \nof households without children.\nAgainst this backdrop, many of the most financially \nvulnerable renters have reduced their spending in \nareas critical to well-being. Rent is the largest expense \nfor most households and often takes priority because \nthe consequences of not paying rent could include \neviction and homelessness. Center tabulations of the \nConsumer Expenditure Survey indicate that severely \ncost-burdened renter households in the lowest expen­\nditure quartile (a proxy for low incomes) spent 39 \npercent less on food and 42 percent less on healthcare \nthan their unburdened counterparts in 2022.\n0\n10\n20\n30\n40\n50\n60\n70\nAsian\nWhite\nBlack\nHispanic\n$75,000 and Over\n$50,000-$74,999\n$35,000-$49,999\n$25,000-$34,999\nUnder $25,000\nRace/\nEthnicity\nHousehold\nIncome\nNotes: Black, Asian, and white respondents are non-Hispanic. Hispanic individuals may be of any race. People identifying as another \nrace (including Native American) or multiple races are not shown owing to data limitations. The survey asked, “How stressful, if at all, has \nthe increase in prices in the last two months been for you?” \nSource: JCHS tabulations of US Census Bureau, Household Pulse Surveys, June–October 2023.\nFigure 26\nLower-Income, Hispanic, and Black Renter Households Have Been Hardest Hit by Inflation\nShare of Renter Households Very Stressed by Price Increases (Percent)\nMore recently, the Census Bureau’s Household Pulse \nSurvey illustrates that such trade-offs continued into \n2023, particularly for lower-income households and \nthose that have fallen behind on rent. While almost \ntwo-thirds of renter households making less than \n$25,000 reported difficulty paying for their usual \nexpenses, the share rose to 82 percent for households \nin this income bracket who were behind on rent.\nRenters may make other trade-offs, too. For example, \nin an effort to reduce housing costs, a household might \nrelocate to an older or substandard unit. Such units \ntend to have lower rents, but they are also more likely \nto present significant risks to tenant health and safety. \nRenters may also reduce housing costs by opting for \novercrowded living arrangements, longer commutes, \nor neighborhoods that are less safe, have fewer \namenities, or are in lower-performing school districts. \nThese and other such choices may further threaten an \nalready vulnerable household’s well-being, financial \nstability, and economic mobility.\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n40\n\n\n\n--- Page 43 ---\nThe Outlook\nThe pandemic propelled the housing affordability \ncrisis to new heights, making it an urgent priority for \ncommunities across the nation. While the influx of new \nsupply at the high end of the market will provide some \nrelief for the rising ranks of cost-burdened renters in \nthe middle and higher income brackets, little respite is \nlikely for those with lower incomes. Construction costs \nand market dynamics make it difficult to build new \nunits at lower and moderate rent levels, increasing \nthe need to preserve and repair the existing stock of \naffordable rental housing. \nHouseholds with lower incomes especially will continue \nto struggle to find affordable homes anywhere in the \ncountry, let alone in neighborhoods with high-quality \namenities and services. Absent increased afford­\nable housing production and subsidies or additional \nincome supports, more renters—especially those with \nlower incomes—will strain to make ends meet, as so \nmany already are. \nRecord-high cost \nburdens are forcing \ntrade-offs for lower-\nincome renters.\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n41\n\n\n\n--- Page 44 ---\nRENTAL HOUSING \nCHALLENGES\nFederal subsidies fail to meet the large and growing need for affordable housing, and rental assistance programs \nface ongoing challenges. To mitigate the shortfall, some state and local governments have sought to remove \nzoning and regulatory barriers to affordable and multifamily construction. Nevertheless, an increasing number \nof renters are at risk of eviction, and homelessness has hit an all-time high. Climate change–related hazards \nand energy price hikes are creating further precarity for renter households and property owners.\n \nRental Subsidies Fall Short\nRental assistance is a crucial housing support for \nroughly 5 million households that earn no more than \n50 percent of their area median income. The majority \nof those obtaining assistance through Department of \nHousing and Urban Development (HUD) programs are \nolder adults, people with disabilities, and families with \nchildren. Unfortunately, rental assistance programs \nhave not expanded to meet the growing demand. \nInstead, federal funding for housing assistance has \nincreased only modestly and incrementally since the \nmid-1990s, aside from significant one-off appropria­\ntions during the Great Recession and the pandemic. \nBetween 2001 and 2021, the number of renter house­\nholds receiving support increased by just 910,000, \neven as the number of renter households with very \nlow incomes grew by 4.4 million to 19.3 million. Conse­\nquently, the number of income-eligible households \nthat do not receive assistance jumped from 10.7 million \nin 2001 to 14.2 million in 2021, leaving three out of every \nfour eligible households unassisted. \nSimultaneously, cost-burden rates have increased \nfor income-eligible unassisted renter households. As \nrents have risen faster than incomes, the share of these \nhouseholds with severe cost burdens, substandard \nhousing, or both jumped from 47 percent in 2001 to \n60 percent in 2021. This reflects a rise in worst case \nhousing needs from 5.0 million to a record-high 8.5 \nmillion households over two decades. \nSubsidized Stock Requires \nSubstantial Investments\nThough all of the nation’s rental assistance programs \nfall far short of the need, public housing in particular is \nseverely underfunded. Decades of insufficient capital \nand operating funds have left a massive maintenance \nbacklog estimated at $90 billion. The stock’s generally \npoor condition has motivated many public housing \nauthorities to demolish or transition units to other \nfunding streams. As a result, the number of occupied \npublic housing units has declined. In 2022, 835,000 \nhouseholds lived in public housing, down from a peak \nof 1.4 million in 1994 (Figure 27).\nThe Rental Assistance Demonstration (RAD) program, \nwhich converts public housing units to longer-term, \nstable Section 8 contracts, allows housing providers \nto secure other sources of financing to under­\ntake needed maintenance and redevelopment. \n06\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n42\n\n\n",
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        "text": "--- Page 45 ---\n0.0\n0.5\n1.0\n1.5\n2.0\n2.5\n3.0\n1990\n1994\n1998\n2002\n2006\n2010\n2014\n2018\n2022\nPublic Housing\nHousing Choice Vouchers\nProject-Based Section 8\nLIHTC\nNotes: LIHTC occupancy is based on the 98.6% rate reported by \nNovogradac in 2021. LIHTC units include low-income units only. \nSources: JCHS tabulations of HUD, Picture of Subsidized \nHouseholds and Low-Income Housing Tax Credit Database; \nRobert Collinson, Ingrid Gould Ellen, and Jens Ludwig, Low-Income \nHousing Policy, NBER Working Paper, 2015.\nFigure 27\nLIHTC and Vouchers Have Become the Largest \nRental Assistance Programs\nOccupied Units (Millions)\nUnder RAD, 226,000 units have converted to Section 8 \nunits to date, boosting the number of project-based \nSection 8 households to 1.2 million in 2022. \nA recent extension of RAD offers public housing author­\nities the first real opportunity to develop new public \nhousing units since the Faircloth Amendment capped \nthe public housing stock at 1999 levels. With the demo­\nlition of hundreds of thousands of units since then, \nmany places operate below their allowable maximum \nbut do not have the capital to support new units. Fair­\ncloth-to-RAD helps address this financing hurdle, \nproviding housing authorities with the opportunity to \nadd nearly 220,000 units back to the stock through \nHUD’s mixed-finance program, with the knowledge \nthat the units will convert to longer Section 8 contracts.\nFaircloth-to-RAD holds promise for expanding the \nsubsidized stock. Still, most new construction, rehabili­\ntation, and acquisition projects are currently financed \nthrough the Low-Income Housing Tax Credit (LIHTC) \nprogram. Since the program’s creation in 1986, LIHTC \nhas supported the development and preservation of \nmore than 3.6 million low-income units. While LIHTC \nis an important source of quality affordable housing \nin many communities, developers are permitted to \nflip these units to market rate after the conclusion \nof the affordability period, typically at least 30 years. \nMore than 325,000 units are set to expire between \n2024 and 2029 alone. Additionally, at least 7,000 units \nare prematurely lost each year through the qualified \ncontracts process, which permits property owners to \nopt out of the program after 15 years. \nFurther, LIHTC does not necessarily protect a renter \nfrom cost burdens. Because rents are capped based \non the income designation of the unit, tenants who \nmake less than that maximum may find themselves \nin an unaffordable unit. For some renters with lower \nincomes, Housing Choice Vouchers can help make \nup a portion of the difference. \nHousing Choice Vouchers have been the dominant \nHUD subsidy for the last 25 years, assisting 2.3 million \nrenter households in 2022. However, voucher holders \nmay struggle to secure a unit priced within their area’s \nfair market rent. Vouchers also do not guarantee an \naffordable apartment. Indeed, 26 percent of voucher \nrecipients were cost burdened despite receiving assis­\ntance. This is likely because renters can select housing \nthat costs more than the program limit as long as they \npay for the difference out of pocket. \nMoreover, Housing Choice Vouchers rely on the private \nmarket and landlord participation. Yet many property \nowners find the program’s inspections and require­\nments too burdensome to merit their involvement. \nGiven these challenges, about 40 percent of voucher \nholders are unable to secure an appropriate unit in \nthe allotted time. To address these obstacles, HUD \nannounced in 2023 that the agency will pilot a direct-\nto-tenant assistance program.\nThough HUD programs serve rural areas, multifamily \nsubsidies from the US Department of Agriculture \n(USDA) play an important role in these communities. \nUSDA’s Section 515 Rural Rental Housing program offers \nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n43\n\n\n\n--- Page 46 ---\nlow-interest mortgages for multifamily housing and \nrequires that rents in these units remain affordable \nover the 30-year loan period. Currently, Section 515 \nserves 378,000 renter households in rural areas with \nlimited rental supply. However, this stock is dwindling. \nThe program has not financed new housing in recent \nyears, and most of the existing loans are nearing matu­\nrity. Loan prepayments also threaten the stock. Nearly \n22,000 units exited the program between 2016 and 2021, \naccording to the Housing Assistance Council.\nState and Local Governments Step \nUp Efforts\nLimited federal rental assistance has prompted many \nstate and local governments to find solutions to the \naffordability crisis. Increasingly, states and localities \nrely on multifamily housing bonds to finance afford­\nable housing, often pairing tax-exempt bond revenue \nwith LIHTC financing. Multifamily private activity bond \nissuances rose from $2.4 billion in 2010 to a record $17.2 \nbillion in 2020 (Figure 28). On a smaller scale, more \nthan 800 state and local housing trust funds generated \nalmost $3 billion annually to fund affordable housing.\nIn addition to raising their own revenues, state and local \ngovernments manage federal resources for affordable \nhousing. Since 2016, the National Housing Trust Fund \nhas provided states with flexible funding ranging from \n$173 million to nearly $740 million annually. American \nRescue Plan state and local fiscal recovery funds have \nalso been a recent boon to affordable housing efforts. \nState and local governments budgeted $17.7 billion of \nthese funds through June 2023 to support about 2,800 \naffordable housing projects and programs nationwide. \nSome cities are finding ways to take units out of the \nprivate market for longer-term affordability, including \nshared and public ownership models. According to \na 2022 survey by the Grounded Solutions Network, \ncommunity land trusts hold nearly 20,000 rental \nunits nationwide. Growing momentum for publicly or \ncommunity-owned permanently affordable housing \nhas also spurred calls for social housing plans in Cali­\nfornia and Rhode Island, as well as in New York City, \nLos Angeles, San Francisco, Kansas City, Seattle, and \nWashington, DC. \nAt the same time, a growing tenant movement has \nprompted rent regulation legislation. In 2019, Oregon \npassed the first statewide rent stabilization bill, limiting \nannual rent increases to 7 percent plus inflation. Cali­\nfornia enacted similar legislation shortly thereafter. At \nthe local level, Saint Paul recently implemented rent \nstabilization measures. \nHowever, other state and local legislative efforts to limit \nrent increases have failed, in part because striking a \nbalance between the priorities of renters and property \nowners proved difficult. While renters seek protection \nfrom rapid rent hikes, landlords are concerned about \nlimits on rent increases that can make it more difficult \nto cover growing expenses. There is also the risk that \ndevelopers may steer clear of jurisdictions with rent \ncontrol, creating longer-term supply challenges.\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n44\n0\n2\n4\n6\n8\n10\n12\n14\n16\n18\n2005\n2007\n2009\n2011\n2013\n2015\n2017\n2019\nNote: Multifamily private activity bonds are issued by state and  \nlocal authorities.\nSource: Council of Development Finance Agencies.\nFigure 28\nMultifamily Bond Issuances Jumped in the  \nLast Decade\nMultifamily Bond Issuances (Billions of Dollars)\n\n\n\n--- Page 47 ---\nBarriers to New Construction \nAre Falling\nReducing the barriers to multifamily housing construc­\ntion can improve affordability and increase rental \noptions. Nationwide, an estimated 75 percent of land \nin major cities is zoned exclusively for single-family \nhomes. By limiting diverse housing types, commu­\nnities effectively exclude renters. Amending zoning \nlaws does not guarantee that new units will be built \nor will be affordable to renters with lower incomes, but \nit removes a significant barrier to such possibilities.\nSuch zoning reforms are gaining popularity, with recent \nefforts at all levels of government. The 2023 federal \nomnibus spending bill included $85 million for new “Yes \nIn My Back Yard” grants to encourage state and local \ngovernments to identify and address exclusionary \nzoning and land use policies. The program follows \nWashington’s model of incentivizing communities to \ncarefully examine restrictive zoning. There, the initiative \nsupported several cities in changing their land use \npolicies to allow duplexes, triplexes, and accessory \ndwelling units in formerly single-family districts.\nAlso, a growing list of states are preempting local \nsingle-family zoning laws to compel more neighbor­\nhoods to allow a range of housing options. In 2023 \nalone, Montana, Vermont, and Washington passed \nlegislation requiring local communities to loosen \nzoning laws to allow modest-sized multifamily build­\nings. These changes came on the heels of sweeping \nzoning reforms in California, Maine, and Oregon that \nsimilarly opened single-family-only zones to different \ntypes of housing. And in Massachusetts, recent legis­\nlation mandated that the 177 jurisdictions served by \npublic transit must designate at least one zone to allow \nmultifamily buildings and higher densities without \nspecial approvals.\nAt the local level, cities are also eyeing zoning reforms \nto enable more supply and improve affordability over \nthe longer term. In 2020, Cambridge, Massachu­\nsetts, adopted an innovative 100 percent affordable \nhousing overlay, allowing affordable development \nAbout 75 percent of \nland in major cities is \nzoned exclusively for \nsingle-family homes.\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n45\n\n\n\n--- Page 48 ---\nprojects by right and at greater heights and densities. \nCambridge is also among the cities—including Ann \nArbor and Cincinnati—that recently removed some or \nall parking requirements in an effort to reduce the cost \nof construction and, in turn, rents in new developments. \nEvictions Have Returned to \nPre-Pandemic Levels\nThe protections and supports that kept households in \ntheir homes through the first years of the pandemic \neither have ended or are nearing depletion. Emergency \nRental Assistance (ERA) and federal, state, and local \neviction moratoriums—as well as property owners \nwho gave renters additional leniency—helped keep \nvulnerable renters housed, reducing eviction cases \nby an estimated 58 percent through the end of 2021, \naccording to the Eviction Lab. \nERA has been a particularly critical program, making \nmore than 10.8 million payments to renters at risk of \neviction and, in doing so, making their landlords whole. \nWhile some ERA funds have spending timelines that \nextend through 2025, most of the money has already \nbeen disbursed. As of mid-October 2023, about $6.5 \nbillion remained of the $46.55 billion in authorized \nassistance, and programs in most states were closed. \nYet renters continue to face financial stressors. In the \nmiddle of 2023, 12 percent of all renter households were \nbehind on rent despite low unemployment and the \nbroader economic recovery, with even higher rates \nfor lower-income households (18 percent) and those \nheaded by a Black person (21 percent) or an Asian \nperson (17 percent). With significant shares of renters \nstill at risk as ERA and other critical protections wind \ndown, eviction filings approached pre-pandemic levels \nat the end of 2022 and remained elevated through the \nfirst half of 2023 (Figure 29). \nStill, some renters are benefitting from ongoing efforts \nto keep tenants housed. At the federal level, HUD’s \nEviction Protection Grant Program has offered funding \nto a limited number of governments and nonprofits \nthat provide or connect renters with legal services. \nStates and localities are also working to pass right-to-\ncounsel legislation for renters facing eviction. Jurisdic­\ntions in 17 states had some form of right to counsel as \nof mid-2023, with 3 states and 12 local governments \nenacting such programs since 2021. State, county, and \nlocal governments are also continuing their emer­\ngency rental assistance programs, with about half \nof ERA administrators surveyed by the National Low \nIncome Housing Coalition reporting that they plan to \nkeep running these programs beyond the end of the \nUS Department of the Treasury’s ERA funds. \n0\n20\n40\n60\n80\n100\n120\n2021\n2022\n2023\n2020\nNotes: Data include eviction filings in the 10 states and 18 cities \nthat had complete data through the end of June 2023. Rates are \nrelative to a pre-pandemic average baseline.\nSource: JCHS tabulations of Eviction Lab, Eviction Tracking System.\nFigure 29\nEviction Filings Returned to Pre-Pandemic Levels \nAfter Relief Measures Expired\nEviction Filings Relative to Pre-Pandemic Average (Percent)\nHomelessness Reaches an \nAll-Time High\nAs evictions and housing costs have risen, so has \nhomelessness. In 2023, a record-setting 653,100 \npeople in the US were unhoused on a given night in \nJanuary. During the early years of the pandemic, evic­\ntion prevention efforts, emergency rental assistance \nprograms, and temporary income supports minimized \nthe rise in homelessness. However, many of these \nprotections ended in 2022 as rents rose rapidly and \nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n46\n\n\n\n--- Page 49 ---\namid an influx of migrants prohibited from working. \nConsequently, the number of unhoused people rose \nby nearly 71,000 in just one year.\nThe most recent increase reflects a significant growth \nin both sheltered and unsheltered homelessness. \nBetween January 2022 and 2023, the number of people \nstaying in shelters rose by 47,860 to 396,490. Mean­\nwhile, an increase of 22,780 people staying in places \nnot intended for human habitation drove the popu­\nlation experiencing unsheltered homelessness to an \nall-time high of 256,610. \nRising unsheltered homelessness continues a longer-\nterm trend. Since 2015, this population has grown \nnationally by more than 83,000 people (48 percent). \nWhile states across the country have seen their unshel­\ntered populations increase, the growth has been \nhighest in the West, where housing costs have risen \nrapidly and shelter resources were already strained. \nIn California alone, 123,420 people are experiencing \nunsheltered homelessness, amounting to 48 percent \nof the national unsheltered population. Even states \ntraditionally considered more affordable, like Arizona, \nOhio, Tennessee, and Texas, have experienced rising \nunsheltered homelessness since 2015 (Figure 30).\nSeveral populations are vulnerable to homeless­\nness. Widespread discrimination against Black and \nHispanic people creates inequities in household \nfinances, housing opportunities, and evictions. As a \nresult, Black people are 37 percent of all unhoused \npeople but just 13 percent of the US population, while \nHispanic people are more than a quarter (28 percent) \nof people experiencing homelessness but less than \n20 percent of the population. In addition to discrimi­\nnation, Native Americans and Indigenous people face \nunique housing challenges that also leave a dispro­\nportionate share homeless. \nDecrease (Up to 1,535)\n1–500 Increase\n501–1,000 Increase\n1,001–50,000 Increase\nChange in Unsheltered Homelessness,\n2015–2023 (People)\nSource: JCHS tabulations of US \nDepartment of Housing and \nUrban Development, Annual \nHomeless Assessment Report \nPoint-in-Time Estimates.\nFigure 30 \nUnsheltered Homelessness Has Risen in Most States\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n47\n\n\n\n--- Page 50 ---\nIn response to the increase in homelessness, the \ncurrent administration has offered federal agencies \nadditional in resources. Through its Continuum of Care \nprogram, HUD made available a record-setting $3.1 \nbillion in competitive grants in 2023 for homelessness \nresponse efforts. The 2021 American Rescue Plan Act \nalso included $5 billion for homelessness services, \nshelters, and housing through the HOME-ARP program \nand 70,000 Emergency Housing Vouchers for people \nexperiencing or at risk of homelessness. Still, a much \ngreater investment by the federal government in \naffordable housing and rental assistance is imper­\native to prevent further increases in homelessness, \nrehouse people at scale, and reduce the costs of \nhomelessness responses.\nState and local governments have filled some gaps \nby using flexible pandemic funding to serve unhoused \npeople. More than $3.8 billion of state and local fiscal \nrecovery monies have been earmarked for home­\nlessness services and housing. However, some states, \nincluding Missouri and Tennessee, are responding \nto heightened homelessness by passing laws that \nrestrict encampments or criminalize sleeping on \npublic property. Such policies are harmful to people \nexperiencing homelessness, divert resources from \nsupporting unhoused people, and do not address \nthe underlying housing affordability issues that push \npeople into homelessness.\nRental Stock Urgently Requires \nEnergy Upgrades\nExtreme weather variability and rising temperatures \ncaused by climate change are expected to increase \nhome energy demand and, in turn, renters’ housing \ncosts. About half of renters making less than $30,000 \n(8.4 million households) experienced energy insecu­\nrity in 2020 (Figure 31). The Low Income Home Energy \nAssistance Program offset costs for more than 6 million \nrenter and homeowner households in 2022 but none­\ntheless was unable to fully address the need.\nEnergy-Insecure Households\nShare Facing Energy Insecurity (Right Scale)\n0\n10\n20\n30\n40\n50\n60\n0\n1\n2\n3\n4\n5\n6\nUnder\n$15,000\n$15,000-\n$29,999\n$30,000-\n$44,999\n$45,000-\n$74,999\n$75,000\nand Over\nNote: Households that are energy insecure have forgone basic \nnecessities, maintained an unhealthy temperature inside their \nhome, or received a disconnection notice.\nSource: US Energy Information Administration, 2020 Residential \nEnergy Consumption Survey.\nFigure 31\nMillions of Renters Are Energy Insecure\nRenter Households \n(Millions)\nShare Facing Energy \nInsecurity (Percent)\nDespite improvements in construction techniques and \nretrofits, the rental housing stock still has efficiency \nand electrification needs. While renters use less energy \nthan homeowners on a per household basis, rentals \naccount for greater energy use per square foot than \nowner-occupied homes, according to the Residential \nEnergy Consumption Survey. Older rental homes, in \nparticular, use more energy than newer homes and \nhave considerable efficiency, renewable energy instal­\nlation, and electrification needs. \nNew federal resources will help address the need for \nenergy efficiency by providing funding to encourage \ntenants and property owners to make select improve­\nments. The Weatherization Assistance Program, for \nexample, received a one-time $3.5 billion infusion \nthrough the Infrastructure Investment and Jobs Act \nto help homeowners—and likely a modest number \nof renter households—fund approved upgrades. The \nInflation Reduction Act also granted renters and rental \nproperty owners $8.8 billion in household rebates and \nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n48\n\n\n\n--- Page 51 ---\ntax credits, expanded home energy tax credits, and \nprovided an additional $1 billion for energy and water \nefficiency improvements in HUD-assisted housing. \nSimilarly, states are making financial resources avail­\nable for multifamily retrofits. The new Massachusetts \nCommunity Climate Bank, the nation’s first “green \nbank” focused exclusively on affordable housing, will \nlend an initial $50 million in state funds to leverage \nadditional federal and private resources and promote \nefficiency improvements. And in response to a deadly \nheat wave in 2021, Oregon created a $15 million grant \nand rebate program for landlords who install heat \npumps as energy-efficient alternatives to air condi­\ntioners and furnaces. \nClimate Change Threatens Renters \nand Their Homes\nImproving the rental stock’s climate resiliency is \nanother urgent priority. The frequency and severity of \nhazards related to climate change leave an increasing \nnumber of renter households at risk of hurricanes, \nwildfires, floods, and other extreme climate-related \nevents. Disasters also carry longer-term risks to renters. \nBoth evictions and rents increase in the year after a \nclimate-related disaster, and recovery assistance for \nrenters is dramatically lower than homeowner aid and \ntakes longer to receive. \nRising insurance premiums and the increasingly \nfrequent withdrawal by insurers from high-risk markets \nare making property insurance more expensive. Yet \neven as insurance costs are growing, coverage has \ndecreased. Nearly two-thirds of firms surveyed in 2023 \nby the National Multifamily Housing Council reported \nthat they had to increase their deductibles, and about \na third noted that their insurance carrier had limited \nor reduced coverage amounts. These rising costs \nthreaten the financial solvency of existing properties \nand can constrain the financing of new construc­\ntion, especially for affordable housing providers. \nRenters are also affected by the shifting insurance \nmarkets. Just over half have a general renters insur­\nance policy. But most of these policies do not include \nseparate flood coverage. \nWith gaps in insurance, federal resources are crucial in \nhelping renter households and communities with relief \nand recovery after disasters. The Federal Emergency \nManagement Agency’s Individuals and Households \nProgram has provided $4.5 billion directly to 1.4 million \nrenter households since 2020. Additionally, $10 billion \nof Community Development Block Grant Disaster \nRecovery funds assisted communities affected by \ndisasters between 2020 and 2022. State and local \ngrantees can use these monies to rebuild multifamily \nhousing and cover rent payments. Still, they typically \nput most of their funds toward supporting individual \nhomeowners, leaving unaddressed the assistance \nthat rental property owners may need to bring units \nback online. \nGreater investment in pre-disaster upgrades for the \nexisting rental stock is also critical to protecting the \nalready dwindling supply of affordable homes. At \nthe federal level, the new Green and Resilient Retrofit \nProgram will enable HUD-supported providers to rein­\nvest in their housing, making the units more resilient \nto extreme weather events while improving energy \nefficiency. Locally, efforts such as the Washington, DC, \nResilience and Solar Assessment tool will help owners \nof affordable multifamily properties identify adapta­\ntion improvements and potential funding sources to \npay for them. \nUltimately, increasing assistance for pre-disaster \nretrofits, supporting affordable housing providers with \ninsurance costs, and investing in regional coordinated \nplanning are critical to ensuring rental homes and \noperators are equipped to meet the challenges of \nclimate change while preserving affordability.\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n49\n\n\n\n--- Page 52 ---\nThe Outlook\nThough the affordability challenge is not new, it has \nnoticeably worsened in recent years. Before the \npandemic, housing cost burdens swiftly climbed \nthe income scale, especially in high-cost markets, \nwhile households with lower incomes grappled with \npersistently high burdens. The pandemic signifi­\ncantly exacerbated these problems as rents surged \nat unprecedented rates, leaving record numbers of \nrenters struggling to afford housing and other basic \nneeds. Against this backdrop and with the sunsetting \nof pandemic-era supports for renters, evictions have \nrisen and more people are experiencing homelessness \nthan ever before. \nAs a growing number of middle-income households \nstruggle with increasingly unaffordable housing, the \ncrisis is receiving more attention. State and local \ngovernments are seeking to reduce barriers to building \nhousing that is more affordable and located in desir­\nable neighborhoods. Such actions include reforming \nzoning laws to allow for a greater variety of housing \ntypes. While this work is crucial, state and local govern­\nments cannot tackle the affordability crisis alone. \nIndustry must continue to innovate less costly ways to \nbuild homes. If successful and achieved at the needed \nscale, these efforts could address the affordability \nchallenges facing middle-income renters. \nEven so, a gaping divide persists between what \nlower-income households can afford and the cost \nof building and operating rental housing. The need to \nexpand housing subsidies remains a pressing priority. \nOver the last few decades, rental assistance has failed \nto keep up with the growing number of income-eligible \nrenters. The number of unassisted renters is now at \nan all-time high, forcing households to make painful \nchoices that may include forgoing basic needs in favor \nof housing. To meaningfully shrink the affordability \ngap, all levels of government, as well as the private \nsector, must increase their commitment to assisting \nhouseholds and use every available tool. \nThere is also an increasingly urgent need to address \nchallenges at the intersection of housing and climate \nchange. Necessary actions include mitigating the \nhousing sector’s contribution to greenhouse gas emis­\nsions and adapting policies and practices to better \nhelp households recover from increasingly frequent \nclimate-related hazards. Likewise, the existing and \nfuture stock must be able to meet the needs of the \nnation’s rapidly aging population. \nProperty owners’ willingness and ability to make these \nsorts of crucial investments may be hampered by high \ncosts, and many upgrades may only be possible with \nsubsidies. Recently, federal programs have expanded \nfunding for energy-efficiency investments, with an \neye toward ensuring that rental properties and lower-\nincome communities benefit from these resources. \nImportantly, while the scope of needed investments \nis substantial, so is the cost of inaction. The instability \ncaused by a lack of affordable housing bleeds over to \nother public spending, threatening the well-being of \nmillions of people. Pandemic-era emergency housing \nprograms demonstrated the value of supporting \nstable housing while showing that we can muster the \npolitical will for these efforts. With housing challenges \ngrowing ever more severe, now is the time to make a \nfuller commitment to ensuring that all people living \nin the US have a decent, safe, and affordable place \nto call home. \n\t\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n50\n\n\n\n--- Page 53 ---\nADDITIONAL\nRESOURCES\nThe following interactive figures and data tables are a sample of \nthe additional resources available at www.jchs.harvard.edu.\nInteractive Maps and Data\nShare of Cost-Burdened Renters by Metro Area: 2022\nChanges in Cost-Burdened Rates by Income by State: 2001–2022\nNumber of People Experiencing Homelessness by State: 2007–2023\nDecline in Low-Rent Units by State: 2012–2022\nData Tables\nBasic Rental Housing Facts by State and Metro Area: 2022\nCharacteristics of Renter Households by State and Metro Area: 2022\nRentership Rates by State and Metro Area: 2022\nNumber and Share of Cost-Burdened Renters by State: 2001–2022\nNumber of Rental Units by Monthly Contract Rent by State: 2012–2022\n07\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n51\n\n\n\n--- Page 54 ---\nTable A-1\nCharacteristics of Renter Households: 2010–2022\nRenter Households (Thousands)\nPercent Change\n2010\n2019\n2022\n2010–2022\n2019–2022\nAll Renter Households\nTotal\n39,620\n44,012\n45,123\n14\n3\nAge of Householder\nUnder 35\n14,591\n15,159\n16,009\n10\n6\n35–44\n8,098\n8,776\n8,869\n10\n1\n45–54\n6,965\n6,840\n6,630\n-5\n-3\n55–64\n4,630\n6,014\n5,966\n29\n-1\n65 and Over\n5,336\n7,222\n7,650\n43\n6\nHousehold Income\nUnder $15,000\n7,132\n6,853\n7,529\n6\n10\n$15,000–$29,999\n8,072\n7,384\n7,068\n-12\n-4\n$30,000–$44,999\n6,387\n6,313\n6,926\n8\n10\n$45,000-$74,999\n8,603\n9,953\n10,076\n17\n1\n$75,000 and Over\n9,425\n13,508\n13,524\n43\n0\nHousing Cost Burdens\nNot Burdened\n19,736 \n23,623\n22,763\n15\n-4\nModerately Burdened\n9,075\n9,870\n10,292 \n13\n4\nSeverely Burdened\n10,809\n10,518\n12,068\n12\n15\nEducational Attainment of Householder\nNo High School Diploma\n6,978\n5,960\n5,518\n-21\n-7\nHigh School Diploma or GED\n10,834\n11,652\n11,829\n9\n2\nSome College\n12,952\n13,940\n13,929\n8\n0\nBachelor’s Degree\n5,960\n8,119\n8,988\n51\n11\nGraduate/Professional Degree\n2,894\n4,341\n4,859\n68\n12\nHousehold Type\nMarried, Without Children\n4,773\n5,838\n5,909\n24\n1\nMarried, with Children\n5,582\n5,633\n5,116\n-8\n-9\nSingle Parent\n6,999\n6,593\n6,349\n-9\n-4\nOther Family\n3,445\n4,110\n4,333\n26\n5\nSingle Person\n14,682\n16,811\n17,975\n22\n7\nOther Nonfamily\n4,138\n5,026\n5,442\n32\n8\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n52\nNotes: Household incomes are adjusted for inflation using the CPI-U for All Items. Moderately (severely) cost-burdened households \nspend 30–50% (more than 50%) of income on rent and utilities. Households with zero or negative income are assumed to be burdened, \nwhile households that are not required to pay rent are assumed to be unburdened.\nSource: JCHS tabulations of US Census Bureau, American Community Survey 1-Year Estimates.\n\n\n\n--- Page 55 ---\nAmerica’s Rental Housing 2024 was prepared by the Joint Center for Housing Studies of Harvard University. The Center \nstrives to improve equitable access to decent, affordable homes in thriving communities. We conduct rigorous research \nto advance policy and practice, and we bring together diverse stakeholders to spark new ideas for addressing housing \nchallenges. Through teaching and fellowships, we mentor and inspire the next generation of housing leaders.\nSTAFF\nWhitney Airgood-Obrycki \nCorinna Anderson \nJean Barrett \nPatricia Bravo Morales \nJames Chaknis \nKerry Donahue \nRiordan Frost \nChris Herbert \nAlexander Hermann \nAlexander von Hoffman \nMary Lancaster \nDavid Luberoff \nMagda Maaoui \nCarlos Martín \nDaniel McCue \nJennifer Molinsky \nSamara Scheckler\nSophia Wedeen \nPeyton Whitney \nAbbe Will \nJuanne Zhao\nSTUDENTS\nNora Cahill\nSophie Huang\nEtta Madete\nAditya Mukundan\nOlivia Novick\nAbby Yoon\nFELLOWS & ADVISORS\nBarbara Alexander \nFrank Anton \nDaniel Fulton \nJoe Hanauer \nNicolas Retsinas \nMark Richardson\nEDITOR\nLoren Berlin \nDESIGN\nPixels 360\nFOR ADDITIONAL COPIES, PLEASE CONTACT\nJoint Center for Housing Studies of Harvard University\n1 Bow Street, Suite 400 | Cambridge, MA 02138\nwww.jchs.harvard.edu | Twitter (X): @Harvard_JCHS\n\n\n\n--- Page 56 ---",
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      "overall_summary": "Here's a comprehensive summary of the document:\n\n1. Executive Summary:\nThis document is a comprehensive analysis of America's rental housing market in 2024, highlighting significant challenges in affordability, accessibility, and market dynamics. The report indicates a cooling rental market after recent overheating, but reveals persistent and worsening affordability issues, record-high homelessness, and inadequate housing assistance programs. The analysis covers market trends, housing stock changes, ownership patterns, and policy responses.\n\n2. Main Themes and Topics:\n- Rental Market Dynamics and Trends\n- Housing Affordability Crisis\n- Supply and Distribution of Rental Units\n- Property Ownership and Investment\n- Government Assistance Programs\n- Climate and Environmental Challenges\n- Construction and Development Issues\n\n3. Key Findings:\nMarket Conditions:\n- Rent growth has slowed to 0.4% (Q3 2023) from 15.3% in early 2022\n- Vacancy rates increased to 6.6%\n- Property prices down 13% in Q3 2023\n\nAffordability Crisis:\n- Record 22.4 million cost-burdened renter households\n- 12.1 million severely cost-burdened households\n- Only 7.2 million units with rents under $600 in 2022\n- Loss of 6.1 million units renting under $1,000 over past decade\n\nHousing Stock and Distribution:\n- Total rental supply increased by 4.3 million units (2010-2022)\n- 34% of neighborhoods are \"rental deserts\"\n- 41% of rental stock in environmentally hazardous areas\n- Significant increase in institutional ownership\n\nSocial Impact:\n- Homelessness reached 653,100 people (January 2023)\n- Disproportionate impact on minority communities\n- Housing assistance serves only 25% of eligible households\n\n4. Document Structure:\nThe report is organized into four main sections:\nSection 0: Overview and Market Trends\nSection 1: Rental Housing Stock Analysis\nSection 2: Market Performance and Construction\nSection 3: Ownership Patterns and Affordability\nSection 4: Government Programs and Future Challenges\n\nThe document provides a thorough examination of the rental housing market's current state while highlighting critical areas requiring policy intervention and investment.",
      "chunk_summaries": [
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          "summary": "Here's a summary of the key points from the document, which appears to be a report on America's rental housing in 2024:\n\nKey Market Trends:\n- Rental markets are cooling after a period of significant overheating\n- Rent growth has nearly stopped (0.4% in Q3 2023, down from 15.3% in early 2022)\n- Vacancy rates have increased to 6.6% in Q3 2023\n- Demand is stabilizing after pandemic fluctuations\n\nAffordability Issues:\n- Record-high 22.4 million renter households are cost-burdened (spending >30% of income on rent)\n- 12.1 million are severely cost-burdened (spending >50% of income on rent)\n- Only 7.2 million units had rents under $600 in 2022\n- Cost burdens increased across all income levels\n- Median rents have risen 21% since 2001 while renter incomes only rose 2%\n\nHomelessness:\n- Hit all-time high of 653,100 people in January 2023\n- Increased by 71,000 in one year\n- 256,610 people in unsheltered locations (highest on record)\n\nHousing Safety Net Challenges:\n- Only serves 1 in 4 eligible households\n- Public housing has $90 billion maintenance backlog\n- Many subsidized units face expiring affordability periods\n- Need for significant expansion of assistance programs\n\nConstruction & Investment:\n- Multifamily construction starting to cool after boom period\n- High interest rates depressing market activity\n- Property prices down 13% in Q3 2023\n- Operating costs up 9% year-over-year\n\nThe report indicates significant challenges in the rental housing market, particularly around affordability and homelessness, despite some cooling in rental price growth. It suggests a need for expanded federal support and investment in affordable housing solutions.",
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          "page_range": "13-23",
          "summary": "Here's a summary of the key points from this section on rental housing:\n\nKey Trends in Rental Housing Stock:\n\n1. Building Size and Composition:\n- Total rental supply increased by 4.3 million units to 48.1 million (2010-2022)\n- Large multifamily buildings (20+ units) drove growth, adding 3.3 million units\n- Single-family rentals grew by 649,000 but declined from 2016 peak\n- Shift toward larger buildings due to new construction patterns\n\n2. Low-Rent Unit Supply:\n- Units renting below $600/month decreased by 2.1 million over past decade\n- Lost 4.0 million units renting between $600-$999\n- Total loss of 6.1 million units renting under $1,000\n- Only 16% of units now rent below $600 (down from 22% in 2012)\n\n3. Geographic Variations:\n- Northeast has highest proportion of large multifamily buildings (33%)\n- Urban areas have higher concentration of multifamily units (74%)\n- Suburban and non-metropolitan areas have more single-family rentals\n- 47 states experienced losses in low-rent units\n\n4. Distribution Challenges:\n- 34% of neighborhoods are \"rental deserts\" with less than 20% rental stock\n- Rental deserts predominantly in suburban areas\n- Limited rental options contribute to socioeconomic segregation\n- Median income in rental desert areas ($92,000) almost double areas with more rentals ($49,000)\n\nImportant Implications:\n- Declining affordable options for low-income renters\n- Geographical constraints limiting where renters can live\n- Need for increased investment in aging rental stock\n- Growing concerns about housing accessibility and affordability\n- Continued importance of addressing housing inequities\n\nThis overview suggests significant challenges in rental housing availability, affordability, and distribution across different geographical areas and income levels.",
          "tokens": 7948
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          "page_range": "24-33",
          "summary": "Here's a summary of the key points from this section of the document:\n\nMain Topics:\n\n1. Rental Market Changes\n- Rent growth has cooled significantly, dropping to 0.4% annually in mid-2023 from 15.3% the previous year\n- Vacancy rates increased to 6.6% in Q3 2023, up from pandemic lows\n- Geographic trends show faster rent growth in less expensive markets in South, Midwest, and Northeast\n\n2. Financial/Construction Developments\n- Rising interest rates are constraining multifamily financing\n- Multifamily construction starts are slowing while completions remain high\n- Construction delays and costs are increasing, with average completion time reaching 17 months\n- New construction increasingly targets high-end market segments\n\n3. Property Performance\n- Operating expenses rose 9.3% in the year ending June 2023\n- Net operating income growth slowed to 3.5% in Q3 2023\n- Apartment prices fell 13% annually by Q3 2023\n- Transaction volumes declined significantly\n\nImportant Details:\n\n- 41% of rental stock (18.2 million units) is located in areas exposed to environmental hazards\n- More expensive Class A units saw rent growth decelerate from 18.5% to 0.8%\n- Construction costs have increased significantly, with materials up 35% since March 2020\n- Delinquency rates are rising but remain relatively low compared to historical levels\n\nKey Trends:\n\n1. Market Cooling: Significant slowdown in rent growth and increasing vacancy rates across most markets\n2. Supply Chain Issues: Extended construction timelines and rising costs affecting new development\n3. Financial Pressure: Higher interest rates and operating costs impacting property performance\n4. Investment Shifts: Despite short-term challenges, rental housing remains an attractive long-term investment\n\nThe section highlights a general cooling of the rental market while noting ongoing challenges with construction costs, environmental risks, and property performance metrics.",
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          "page_range": "34-44",
          "summary": "Here's a summary of the key points from the document section:\n\nKey Findings:\n\n1. Growing Non-Individual Ownership\n- Nonindividual investors (LLPs, LLCs, corporations) increased their rental property ownership share from 18% to 27% between 2001-2021\n- Especially large increases in small multifamily properties (2-4 units up 17 percentage points to 32%)\n- Large rental properties (50+ units) are 93% owned by nonindividual investors\n\n2. Market Trends\n- Single-family rental purchases by institutions declined 30% in Q3 2023\n- Construction costs and high interest rates are challenging apartment development\n- New supply targets high-end market due to rising costs\n- Operating and insurance costs pose challenges for housing providers\n\n3. Rental Affordability Crisis\n- Record 22.4 million cost-burdened renter households (spending >30% on housing) in 2022\n- 12.1 million severely cost-burdened (spending >50% on housing)\n- Cost burdens increasing across all income levels\n- Half of all renter households were cost-burdened in 2022\n- Particularly affects Black, Hispanic and multiracial households\n\n4. Geographic Impact\n- High cost-burden rates across all regions (46-52%)\n- Worst in Florida, Hawaii and Nevada (>55% cost-burdened)\n- Larger metros have highest rates\n- Rural areas most affordable but still 40% cost-burdened\n\n5. Supply Issues\n- Severe shortage of affordable units for lowest-income households\n- Only 61 affordable units per 100 low-income renter households\n- 7.8 million unit shortfall for extremely low-income households\n- Shortage worst in central cities and high-density suburbs\n\nThe document shows a severe and worsening rental housing affordability crisis affecting households across income levels and geographic areas, with particular impact on lower-income and minority households. The situation is exacerbated by insufficient affordable housing supply and growing institutional ownership of rental properties.",
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          "summary": "Here's a summary of the key points from the document section:\n\nMain Topics:\n\n1. Rental Assistance Programs:\n- LIHTC (Low-Income Housing Tax Credit) and Housing Choice Vouchers have become the largest rental assistance programs\n- Public housing stock has declined while project-based Section 8 units have increased\n- About 2.3 million households received Housing Choice Vouchers in 2022\n\n2. State and Local Government Initiatives:\n- Increased use of multifamily housing bonds ($17.2 billion in 2020)\n- Implementation of rent regulation legislation in some areas\n- Growing focus on zoning reforms to allow more multifamily housing\n\n3. Housing Challenges:\n- Evictions have returned to pre-pandemic levels\n- Record-high homelessness (653,100 people in 2023)\n- Disproportionate impact on Black and Hispanic communities\n\n4. Climate and Energy Issues:\n- Half of low-income renters experience energy insecurity\n- Rising insurance costs due to climate risks\n- Need for energy efficiency upgrades in rental properties\n\nImportant Details:\n\n- About 75% of land in major cities is zoned exclusively for single-family homes\n- Emergency Rental Assistance helped 10.8 million payments to at-risk renters\n- 12% of renter households were behind on rent in mid-2023\n- More than 325,000 LIHTC units are set to expire between 2024-2029\n\nKey Recommendations:\n- Increased government commitment to housing assistance\n- Greater investment in pre-disaster upgrades for rental properties\n- Need for expanded housing subsidies\n- Innovation in less costly construction methods\n- Better support for climate resilience in rental properties\n\nThe document emphasizes that while progress is being made in some areas, there is still a significant need for more comprehensive solutions to address the affordable housing crisis and related challenges.",
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    "filename": "Harvard_JCHS_Americas_Rental_Housing_2024.pdf",
    "extracted_text": "--- Page 1 ---\n20\n24\nAMERICA’S\nRENTAL HOUSING \nJOINT CENTER FOR HOUSING\nSTUDIES OF HARVARD UNIVERSITY \n\n\n--- Page 2 ---\nAMERICA’S RENTAL HOUSING 2024 \nJoint Center for Housing Studies of Harvard University\nHarvard Graduate School of Design | Harvard Kennedy School\nTABLE OF CONTENTS\n1.\t Executive Summary........................................................................................................................................... 1\n2.\t Renter Households.............................................................................................................................................9\n3.\t Rental Housing Stock.......................................................................................................................................17\n4.\t Rental Markets...................................................................................................................................................26\n5.\t Rental Affordability.........................................................................................................................................34\n6.\t \u0007Rental Housing Challenges.......................................................................................................................42\n7.\t \u0007Additional Resources..................................................................................................................................... 51\nONLINE TABLES AND EXHIBITS \nwww.jchs.harvard.edu/americas-rental-housing\nPrincipal funding for this report was provided by Wells Fargo.\n©2024 by the President and Fellows of Harvard College.\nThe opinions expressed in America’s Rental Housing 2024 do not necessarily represent the \nviews of Harvard University or Wells Fargo.\n\n\n--- Page 3 ---\nEXECUTIVE \nSUMMARY\nRental markets are finally cooling as a decades-high volume of new supply has come online, outpacing demand. \nNevertheless, more renter households are cost burdened than ever before, and a record number of people \nare experiencing homelessness. Pandemic resources temporarily shored up the housing safety net, but the \nneed for rental assistance remains greater than ever. Additionally, the aging rental stock requires significant \ninvestment to address structural inadequacies, inaccessibility, and climate risks. Making these investments is \nchallenging, given the current market environment of increasing operating expenses and high interest rates. \nDespite today’s difficult conditions, strong demand from the Gen Z, millennial, and baby boom generations \nshould ensure that the rental market slowdown is short lived.\nRental Markets Are Softening\nRental markets are rapidly cooling after a period \nof significant overheating. Rent growth has almost \ncompletely stopped, following historically high rent \nincreases in both 2021 and 2022. In the third quarter \nof 2023, rent growth plummeted for professionally \nmanaged apartments to just 0.4 percent, down from \n15.3 percent in early 2022, according to RealPage \n(Figure 1). While rents slowly rose across property \nclasses, the pace of growth was under 1 percent in \nthe third quarter of 2023 for lower- and higher-quality \napartments alike.\nThis abrupt deceleration was geographically wide­\nspread, with rents even falling in some markets. In the \nthird quarter of 2023, rents for professionally managed \napartments dropped year over year in 32 percent of \nthe 150 markets tracked by RealPage, including many \nin the West. Just 1 percent of markets posted rent \ngrowth of at least 10 percent in the third quarter of \n2023, a sharp turnaround from the previous year when \nrents in half of the markets increased at that rate. While \nthe slowdown is a welcome change for renters, asking \nrents still remain well above pre-pandemic levels.\n-5\n0\n5\n10\n15\n20\nAll Apartments\nClass A\nClass B\nClass C\n2015\n2017\n2019\n2021\n2023\nNotes: Asking rents are for professionally managed apartments \nin buildings with five or more units. Class A (Class C) apartments \nare relatively higher (lower) quality.\nSource: RealPage.\nFigure 1\nApartment Rent Growth Has Stalled\nAnnual Change in Asking Rents (Percent)\n01 \nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n1\n\n\n--- Page 4 ---\nSome of the deceleration may be explained by the \nlarge number of new units that have come online and \npushed up vacancy rates. After hitting a pandemic \nlow of 5.6 percent in late 2021, the rental vacancy rate \nwas 6.6 percent in the third quarter of 2023, according \nto the Housing Vacancy Survey. The rise in vacancies \nhas been even more pronounced in the professionally \nmanaged apartment sector. In the third quarter of \n2023, 5.5 percent of these units were vacant, above \npre-pandemic averages and more than double the \nall-time low of 2.5 percent set in early 2022. Vacancy \nrates in this sector rose fastest in the South, reaching \n6.3 percent in the first quarter of 2022.\nSlowing demand has also helped rental markets stabi­\nlize after a tumultuous 18 months. Renter household \ngrowth surged in the second year of the pandemic, \nthen tumbled before returning closer to pre-pandemic \nlevels (Figure 2). In the professionally managed apart­\nment market, growth in demand peaked in the first \nquarter of 2022 with the net addition of more than \n700,000 households year over year before plunging to \na net loss in the fourth quarter. Following modest quar­\nterly increases in demand through the first half of 2023, \nan additional 91,000 new renter households formed in \nthe third quarter, nearing pre-pandemic increases.\nUnaffordability Has Hit an All-Time High\nThough rent growth has recently slowed substan­\ntially, the extended period of rising rents during the \npandemic propelled cost burdens to new heights. \nAt last measure in 2022, a record-high 22.4 million \nrenter households spent more than 30 percent of \ntheir income on rent and utilities. This is an increase \nof 2 million households over three years and entirely \noffsets the modest improvements in cost-burden rates \nrecorded between 2014 and 2019 (Figure 3). Among \ncost-burdened households, 12.1 million had housing \ncosts that consumed more than half of their income, \nan all-time high for severe burdens.\nAs a result, the share of cost-burdened renters rose to \n50 percent, up 3.2 percentage points from 2019. The \nfinancial strain has been felt across the income spec­\ntrum. Since 2019, cost-burden shares have risen the \nmost for middle-income renter households earning \n$30,000 to $44,999 annually (up 2.6 percentage points) \nor $45,000 to $74,999 annually (up 5.4 percentage \npoints). Higher-income households also saw their \nburden rate increase by 2.2 percentage points. House­\nholds earning less than $30,000 annually, a popula­\ntion already grappling with persistently high burdens, \nrecorded a 1.5 percentage point increase.\nThe dwindling supply of low-rent units is only wors­\nening cost burdens. In 2022, just 7.2 million units had \ncontract rents under $600—the maximum amount \naffordable to the 26 percent of renters with annual \nincomes under $24,000. This marks a loss of 2.1 million \nunits since 2012 when adjusting for inflation. The spike \nin asking rents during the pandemic accelerated the \ntrend, with more than half a million low-rent units lost \njust between 2019 and 2022.\nThese losses have contributed to a decades-long \nchallenge for renters: rent increases are outpacing \nincome gains. Median rents have risen nearly continu­\nously since 2001 in inflation-adjusted terms and are 21 \npercent higher as of 2022. Meanwhile, renters’ incomes \nhave risen just 2 percent during the same period.\nAnnual Net Change\n-200\n-100\n0\n100\n200\n300\n400\n500\n600\n700\n800\n2013\n2015\n2017\n2019\n2021\n2023\nNote: Annual net change is the four-quarter rolling total for \nprofessionally managed apartment buildings with five or  \nmore units. \nSource: RealPage.\nFigure 2\nApartment Demand Has Started to Rebound\nChange in Apartment Households (Thousands)\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n2\n\n\n--- Page 5 ---\n0\n10\n20\n30\n40\n50\n60\n0\n5\n10\n15\n20\n25\n30\n2001\n2002\n2003 2004 2005 2006 2007 2008 2009 2010\n2011\n2012\n2013\n2014 2015\n2016\n2017\n2018\n2019\n2020 2021\n2022\nSeverely Cost Burdened\nModerately Cost Burdened\nShare with Cost Burdens (Right Scale)\nNotes: Moderately (severely) cost-burdened households spend 30–50% (more than 50%) of income on rent and utilities. Households \nwith zero or negative income are assumed to have burdens, and households that are not required to pay rent are assumed to be \nunburdened. Estimates for 2020 are omitted because of data collection issues experienced during the pandemic. \nSource: JCHS tabulations of US Census Bureau, American Community Survey 1-Year Estimates.\nFigure 3\nThe Number of Cost-Burdened Renters Hit an All-Time High\nNumber of Renter Households (Millions)\t\nShare with Cost Burdens (Percent)\nConsequently, residual incomes—the amount of \nmoney available after paying for rent and utilities to \ncover other needs—have dropped significantly. Those \nwith lower incomes are especially squeezed. Renter \nhouseholds earning less than $30,000 annually had \nan all-time low median residual income of just $310 \nper month in 2022, down 47 percent from 2001 after \nadjusting for inflation. Further, the vast majority of \nthese renters are cost burdened. For this substan­\ntial subset, the median monthly residual income was \njust $170. According to the Economic Policy Institute, \na single-person household in the most affordable \ncounties needs about $2,000 each month to cover \nnonhousing needs.\nSuch tight budgets force financially vulnerable renters \nto make dreadful choices. Center tabulations of the \n2022 Consumer Expenditure Survey indicate that \nseverely cost-burdened renter households in the \nlowest expenditure quartile spent 39 percent less on \nfood and 42 percent less on healthcare than their \nunburdened counterparts. Others may end up living \nin overcrowded or structurally inadequate conditions, \nthreatening their health and well-being.\nA Record Number of People Are \nExperiencing Homelessness\nThough pandemic-era protections and financial \nsupports temporarily reduced eviction filings, these \nresources are largely expired or winding down, and \nhousing instability is once again on the rise. The Eviction \nLab estimated that eviction filings dropped 58 percent \nfrom the start of the pandemic through the end of \n2021, aided in part by federal, state, and local eviction \nmoratoriums and the $46.55 billion Emergency Rental \nAssistance (ERA) program. However, by mid-2023, \nmany states had nearly depleted their ERA funds, and \neviction filings had returned to pre-pandemic levels.\nStill, the pandemic raised awareness of the importance \nof stable housing, and many state and local govern­\nments are building on that momentum. About half of \nthe ERA administrators surveyed by the National Low \nIncome Housing Coalition indicated that they plan to \ncontinue operating their programs after exhausting \ntheir federal allocations. And since 2021, three states \nand 12 local governments have enacted right-to-\ncounsel programs to connect eligible renters at risk \nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n3\n\n\n--- Page 6 ---\nof eviction with legal representation. While these efforts \nare helpful, they do not function at the same scale as \nfederal policies and funding sources.\nLike evictions, homelessness has grown as housing \ncosts have increased, hitting an all-time high of 653,100 \npeople in January 2023 (Figure 4). In the first years of \nthe pandemic, renter protections, income supports, \nand housing assistance helped stave off a consid­\nerable rise in homelessness. However, many of these \nprotections ended in 2022, at a time when rents were \nrising rapidly and increasing numbers of migrants \nwere prohibited from working. As a result, the number \nof people experiencing homelessness jumped by \nnearly 71,000 in just one year. Included in this increase \nwere an additional 22,780 people staying in places \nnot intended for human habitation, including on the \nstreets, in cars, or in abandoned buildings. In 2023, the \ntotal number of people experiencing homelessness \nin unsheltered locations reached 256,610, the highest \non record.\nRising unsheltered homelessness is a longer-term \nand geographically widespread trend. The number of \nunhoused people staying outside shelters increased \nby more than 83,000 people (48 percent) between \n2015 and 2023. This population grew quickly in expen­\nsive states like California, Washington, and Oregon, \nwhere shelter resources were already strained, but \nmore affordable states also recorded increases. \nArizona, Ohio, Tennessee, and Texas were among the \nstates with the largest growth in the number of people \nunsheltered as housing costs have risen.\nThe current administration has made additional \nfederal resources available to reduce homeless­\nness and expand support systems. This includes an \nunprecedented $3.1 billion through the US Department \nof Housing and Urban Development’s (HUD’s) existing \nContinuum of Care program. Significant monies have \nlikewise been allocated via the 2021 American Rescue \nPlan (ARP) Act, including the $5 billion HOME-ARP \nprogram for services, shelters, and housing, plus \n70,000 Emergency Housing Vouchers. State and local \ngovernments have also invested more than $3.8 billion \nof their fiscal recovery funds in homelessness services \nand housing. Even so, considerably more affordable \nhousing and rent subsidies will be needed to prevent \nfurther increases in homelessness, to help rehouse \npeople at scale, and to reduce the costs of the home­\nlessness response system.\nTotal\nSheltered\nUnsheltered\n100\n200\n300\n400\n500\n600\n700\n2007\n2009\n2011\n2013\n2015\n2017\n2019\n2021\n2023\nNotes: Because of the pandemic, complete unsheltered counts \nwere unavailable in January 2021 and sheltered counts were \nartificially low, likely because of reduced shelter capacity. Data \nfor 2021 are based on 2020 and 2022 values.\nSource: US Department of Housing and Urban Development, \nAnnual Homeless Assessment Report Point-in-Time Estimates.\nFigure 4\nAfter a Swift Uptick in 2023, a Record Number of \nPeople Are Unhoused\nPeople Experiencing Homelessness (Thousands)\nHoles Are Widening in the Housing \nSafety Net\nRapidly rising rents, combined with wage losses in \nthe early stages of the pandemic, have underscored \nthe inadequacy of the existing housing safety net, \nespecially in times of crisis. Because rental assistance \nprograms are not an entitlement, they only serve one in \nfour income-eligible households. Their reach has been \nfurther constrained by insufficient budget outlays in \nthe face of growing need. Though the number of very \nlow-income renter households grew by 4.4 million \nbetween 2001 and 2021, the number of assisted house­\nholds in this income range increased by just 910,000.\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n4\n\n\n--- Page 7 ---\nConsequently, 60 percent of very low-income house­\nholds (8.5 million) who were eligible for but did not \nreceive rental assistance spent more than half of their \nincome on housing or lived in severely inadequate \nhousing conditions—sometimes both. This was a \nsubstantial increase from the 47 percent of unassisted \nhouseholds (5.0 million) with worst case housing needs \nin 2001 (Figure 5).\nThe subsidized stock and rental assistance programs \nthat do exist have vulnerabilities, too. The dwindling \npublic housing supply, home to 835,000 households \nin 2022, has a maintenance backlog estimated at \n$90 billion. To address the huge need for repairs in \nan environment of insufficient capital funding, the \nRental Assistance Demonstration program lets public \nhousing authorities convert their units to longer-term, \nstable Section 8 contracts. More than 225,000 public \nhousing units have been converted to date, enabling \nhousing providers to leverage other funding sources \nfor improvements and redevelopment. Still, many \nmore resources are required to sufficiently address \nthe scope of the needed repairs and improvements \nand preserve this critical stock.\n0\n2\n4\n6\n8\n10\n12\n14\n16\n2001\n2021\nAssisted\nModerate or No Problems\nSevere Problems\nUnassisted:\nNotes: Severe problems include spending more than 50% of income \non rent and utilities or living in severely inadequate housing. \nModerate problems include spending 30–50% of income on rent \nand utilities or living in moderately inadequate housing. \nSource: JCHS tabulations of US Department of Housing and Urban \nDevelopment, Worst Case Housing Needs Reports to Congress.\nFigure 5\nThe Rental Assistance Shortage Continues \nto Worsen\nVery Low-Income Households (Millions)\nThe subsidized supply also faces expiring affordability \nperiods and maturation. The Low-Income Housing Tax \nCredit (LIHTC) has supported more than 3.6 million \nunits since its creation in 1986. These units have a \nminimum 30-year affordability requirement (with \nlonger timelines in some states), after which they can \nflip to market-rate rents. Recent estimates suggest \nthat affordability periods for more than 325,000 units \nare set to expire between 2024 and 2029. Another 7,000 \nunits are lost prematurely each year when owners \nuse the tax code’s qualified contract option to opt out \nafter an initial 15-year period. Likewise, the entire stock \nof Section 515 units managed by the US Department \nof Agriculture (USDA), home to 378,000 renter house­\nholds in rural areas, is facing mortgage maturities that \nthreaten continued affordability.\nHousing Choice Vouchers are another crucial housing \nsubsidy facing challenges. Vouchers assisted 2.3 \nmillion households in 2022, covering the difference \nbetween 30 percent of a household’s income and their \narea’s fair market rent. The subsidy relies on participa­\ntion by private-market landlords, who are not required \nto accept the vouchers in most places. Further, the \nunit inspection and approval processes add time and \ncomplexity that may deter some landlords from partic­\nipating, especially in hot markets where the incentive \nto participate can be lower.\nVoucher holders also struggle with the program. \nThey may not be able to find a landlord who accepts \nvouchers or a suitable apartment that meets the \nprogram’s guidelines. About 40 percent of people \nwho receive a voucher are unable to use the subsidy \nin the short amount of time allotted by the program \nto sign a lease.\nWhile there have been proposals to expand the \nnational housing safety net and preserve affordable \nunits, shortfalls in federal rental assistance programs \nand worsening cost burdens have prompted state \nand local governments to act to the extent that \nthey can. States and localities are leveraging other \nfederal resources, such as state and local fiscal \nrecovery funds, to support affordable housing.\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n5\n\n\n--- Page 8 ---\nA number of states, counties, and cities issued a record \n$17.2 billion of multifamily bonds in 2020 to supplement \nLIHTC allocations. Nationwide, states and cities also \ngenerate about $3 billion annually through housing \ntrust funds to meet local housing needs. All of these \nefforts are crucial but fall short of the growing need.\nAging Rental Stock Will Require \nReinvestment\nThe rental stock is older than it has ever been. The \nmedian age was 44 years in 2021, up from 34 years \ntwo decades ago. Although building construction \nstandards and repairs to existing units have helped \nto minimize the problem of structural inadequacy, a \nlarge number of rental units still fall short of baseline \nhabitability and safety. Nearly 4 million renter house­\nholds live in physically inadequate units with problems \nsuch as structural deficiencies, a lack of upkeep, or \ninconsistent provision of basic features like electricity, \nhot and cold running water, or heat. Even among units \nthat meet the criteria for physical adequacy, many \nstill have significant unmet repair needs. The Federal \nReserve Bank of Philadelphia estimated in 2023 that it \nwould cost $51.5 billion to address the physical defi­\nciencies of the occupied rental stock.\nMuch of the rental stock does not meet householders’ \naccessibility needs. The rapidly growing population \nof older adults will increase demand for accessibility \nfeatures, given that the occurrence of disabilities rises \nwith age. According to a 2023 survey conducted by \nFreddie Mac, nearly half of renters with disabilities say \ntheir homes are minimally or not at all accessible. \nRespondents most often reported needing bathroom \nmobility aids, home security systems, no-step entries, \nand accessible electrical outlets.\nThe rental stock also needs significant energy effi­\nciency and electrification modifications to reduce \ngreenhouse gas emissions and the high energy costs \nsqueezing lower-income renters. Rental homes—\nespecially those in small multifamily buildings—use \nmore energy per square foot than owner-occupied \nhomes, according to the Residential Energy Consump­\ntion Survey. Older homes also use more energy than \nnewer homes and have significant efficiency and \nelectrification needs.\nA one-time infusion of $3.5 billion for the Weatheriza­\ntion Assistance Program through the 2021 Infrastruc­\nture Investment and Jobs Act is helping some renters \nand rental property owners with home retrofits. Simi­\nlarly, the 2022 Inflation Reduction Act provided $8.8 \nbillion in efficiency and electrification improvement \nrebates for market-rate housing, including rental units, \nand $1 billion for efficiency upgrades to HUD-subsidized \nproperties. However, more incentives are needed to \nmeet the challenges of retrofitting the existing rental \nstock and ensure that new rental units are constructed \nwith high energy performance in mind.\nAnother growing threat to the quality of the nation’s \nstock of rental housing comes from the increasing \nfrequency and severity of weather- and climate-\nrelated hazards like wildfires, flooding, earthquakes, \nand hurricanes. More than 18 million occupied rental \nunits (41 percent) are located in areas with substantial \nexpected losses from such events. Simultaneously, a \ngrowing number of insurers are declining coverage \nin high-risk housing markets, making it increasingly \ndifficult and expensive for property owners and renters \nto obtain and afford the insurance needed to cover \npotential losses. To protect households and commu­\nnities, states and localities will need to push for hazard \nmitigation and climate adaptation measures for indi­\nvidual properties and across regions.\nHigh Interest Rates Have Depressed \nMarket Activity\nWith interest rates rising into 2023, the cost of debt to \nacquire and build multifamily properties has risen. At \nthe same time, high treasury yields have increased \nthe cost of equity, as apartments must provide greater \nreturns to investors to compete with Treasury notes.\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n6\n\n\n--- Page 9 ---\nAgainst this backdrop, borrowing and transac­\ntion activity has declined. More than half the banks \nsurveyed by the Federal Reserve reported that demand \nfor multifamily loans has decreased. Further, nearly \ntwo-thirds of multifamily lenders tightened their \nunderwriting criteria in response to uncertain prop­\nerty performance and interest rate hikes. Multifamily \nmortgage borrowing was down 48 percent year over \nyear in the second quarter of 2023.\nAs the cost of capital has risen, property prices have \ndropped. The beginning of 2023 marked the first time \nthat apartment prices fell year over year in more than \na decade. By the third quarter, prices were down 13 \npercent, a remarkable turnaround from the peak 23 \npercent growth rate posted at the beginning of 2022. \nFalling property prices reflect rising capitalization \nrates—an indicator of returns used to compare invest­\nments. According to Moody’s Analytics, cap rates fell \nthrough 2022 before rising by 0.9 percentage points \nover the first three quarters of 2023 to 5.8 percent. In the \ncurrent environment, higher-risk multifamily invest­\nment can be less attractive than lower-risk Treasuries.\nFor those who already own rental properties, net \noperating incomes are rising at a slower pace as rent \ngrowth moderates and expenses increase. According \nto Yardi Matrix, the cost of operating multifamily prop­\nerties grew 9 percent year over year in June 2023. In \nresponse, net operating income growth slowed to 3 \npercent in the third quarter of 2023, from the recent \nhigh of 25 percent posted in 2021.\nWhile slowing returns could spark delinquencies, most \nproperty owners should be protected by the signifi­\ncant equity accrued before the pandemic. Moreover, \nmost loans were underwritten with enough cushion to \ncover debt service. Plus, longer-term loans constitute \nthe largest share of all multifamily debt and have \nfewer near-term maturities that will not require refi­\nnancing in the current high interest rate environment. \nTo date, delinquencies have only inched up from their \nultra-low levels.\nNew Multifamily Construction \nHas Slowed\nAfter a major boom, multifamily construction has \nstarted to cool. As late as the spring, starts remained \nelevated even as interest rates rose, with a season­\nally adjusted annual rate of 571,000 units posted in \nMay 2023 (Figure 6). But with markets slackening and \n0\n100\n200\n300\n400\n500\n600\n700\nMonthly Starts\nAverage Starts (3-Month Trailing)\n2000\n2002\n2004\n2006\n2008\n2010\n2012\n2014\n2016\n2018\n2020\n2022\nNote: Data are for buildings with at least two units and are through October 2023.\nSource: JCHS tabulations of US Census Bureau, New Residential Construction data.\nFigure 6\nNew Multifamily Construction Has Quickly Declined\nAnnualized Multifamily Units (Thousands, Seasonally Adjusted)\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n7\n\n\n--- Page 10 ---\nhigh financing costs making it increasingly difficult \nto underwrite new deals, starts have fallen sharply \nin recent months. In October 2023, starts receded to \n402,000 units, a 30 percent decrease year over year.\nNevertheless, units that were already under way \ncontinue to come online in large numbers. A total \nof 436,000 multifamily units were completed in the \nthird quarter of 2023 on a seasonally adjusted annu­\nalized basis, the highest reading since 1988 and up \nabout a third from pre-pandemic levels. Likewise, the \nnumber of multifamily units currently under construc­\ntion reached the highest level on record in July 2023, \nmaintaining that fast pace at a seasonally adjusted \nannual rate of 1.0 million units in October.\nWhile the pipeline of units under construction should \nhelp provide new supply in the near term, declining \nstarts could worsen the existing supply shortage. Addi­\ntionally, local regulations and zoning laws constrain \nmultifamily construction in many neighborhoods. \nNationally, an estimated 75 percent of the land in \nmajor cities is zoned exclusively for single-family \nhomes. Several states have preempted local zoning \nlaws to allow a range of housing options. In 2023, \nMontana, Vermont, and Washington passed legisla­\ntion that allows modest-sized multifamily buildings \non lots previously zoned only for single-family homes, \nfollowing the lead of California, Maine, and Oregon. \nZoning reforms do not guarantee the construc­\ntion of new multifamily housing, but they remove a \nsignificant barrier.\nThe Outlook\nOver the coming year, the softening of the rental \nmarket will likely continue as the pipeline of units under \nconstruction boosts supply beyond already high levels \nand continues to slow rent growth. This will be good \nnews for renters, providing relief for households with \nhigher and middle incomes. But respite will likely be \nshort-lived in the face of strong demand from the \nlarge Gen Z, millennial, and baby boom generations.\nAffordability remains a critical concern. Lower-\nincome renters face the worst affordability conditions \non record. Rental subsidies have not kept pace with the \ngrowing need, leaving those without assistance to fend \nfor themselves in one of the costliest housing markets \nin history. And homelessness is at an all-time high. \nIncreasing the supply of market-rate units will help \nto address the affordability crisis but cannot wholly \nresolve it. Rather, significantly expanding assistance—\nespecially the programs that help the lowest-income \nrenters—will also be a crucial part of the solution.\nIn the short term, rising operating costs and high \ninterest rates will present a formidable challenge for \nproperty owners. The slowing growth in operating \nincomes will make it more difficult for property owners \nto invest in repair and maintenance, accessibility \nfeatures, and climate change mitigants and adap­\ntations. Yet, the massive pre-pandemic accumulation \nof equity, coupled with the pandemic’s unprecedented \nrent increases, should prevent widespread distress \namong property owners.\nDuring the pandemic, the increased resources for \nrenters, housing providers, and state and local govern­\nments demonstrated that financial assistance and \nsupports keep tenants stably housed and landlords \nsolvent. But as these resources have expired or been \nspent down, the housing safety net is once again over­\nwhelmed and underfunded, as has been the case for \nmany decades. While states and localities have acted \nto fill some of the gaps, a larger commitment from the \nfederal government is required to expand housing \nsupports and preserve and improve the existing \naffordable stock. Only then will the nation finally make \na meaningful dent in the housing affordability crisis \nmaking life so difficult for millions of people.\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n8\n\n\n--- Page 11 ---\nRENTER \nHOUSEHOLDS\nDemand for rental housing is stabilizing after the erratic highs and lows of the pandemic. The number of smaller \nrenter households with lower incomes has grown in recent years and remains an important source of rental \ndemand. Nevertheless, longer-term demand has come from the growing number of renter households with \nhigher incomes, and has reshaped rental markets over the last decade. The large Gen Z, millennial, and baby \nboom generations have also supported rising numbers of renter households. While overall renter mobility rates \nare falling, migration is helping to sustain demand in some states.\nRental Demand Is Returning \nFollowing the pandemic rollercoaster, demand for \nrental housing is finally stabilizing. After an initial slow­\ndown during the first year of the pandemic, rental \ndemand surged in 2021. A flood of new households \nfueled a quick rise in rents and historically low vacancy \nrates. In recent quarters, renter household growth has \nreturned to the more typical pace witnessed in the \nyears preceding the pandemic, buoyed in part by the \nhigh cost of homeownership, an influx of new supply \nhelping to moderate rents, and a strong job market \n(Figure 7).\n25\n28\n3 1\n34\n37\n33\n34\n35\n36\n37\n38\n39\n40\n41\n42\n43\n44\n45\n2001 2002 2003 2004 2005 2006 2007 2008 2009 2010\n2011\n2012\n2013\n2014\n2015\n2016\n2017\n2018\n2019 2020\n2021\n2022 2023\nRenter Households\nRentership Rate (Right Scale)\nNotes: Values for 2023 are year-to-date averages for the first three quarters. Values for 2020 are omitted because data collection was \ndisrupted during the pandemic.\nSource: JCHS tabulations of US Census Bureau, Housing Vacancy Surveys.\nFigure 7\nThe Number of Renter Households Is Trending Upward Despite Declining Rentership Rates\nRenter Households (Millions)\t\nRentership Rate (Percent)\nThe professionally managed apartment market—a \nsector that typically houses renters with higher \nincomes and constitutes more than a quarter of US \nrental units—has been particularly prone to these \ndramatic fluctuations in household growth. After \nhitting a record-breaking 706,000 year-over-year net \n02\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n9\n\n\n--- Page 12 ---\nincrease at the beginning of 2022, growth in renter \nhouseholds plummeted quickly to an annual net loss \nof 192,000 by the first quarter of 2023, according to \ndata from RealPage. However, following three quar­\nters of decline, the quarter-over-quarter change in \nthe number of occupied apartments turned slightly \npositive at the start of 2023, followed by a modest \nsecond-quarter reading. Rental demand accelerated \nin the third quarter with 91,000 new renter households, \nputting household growth nearly on par with readings \nbefore the pandemic.\nThe overall rental market also saw swift increases in \nhousehold formations in 2021 followed by a return to \npre-pandemic levels of growth in 2023. According to \nCenter tabulations of the Housing Vacancy Survey, \nthe number of renter households reached 44.3 million \nin the third quarter of 2023—34.1 percent of US house­\nholds. Of the 927,000 renter households that entered \nthe market since the start of the pandemic, about \n317,000 did so within the last year. This growth signals \na return to the pace posted before the pandemic. In \n2019, 299,000 renter households entered the market.\nRenter Household Growth Is Shifting \nMuch of the short-term growth in renters has come \nfrom smaller households and those with lower and \nmore moderate incomes. In the years leading up to the \npandemic, rental demand increased among house­\nholds earning at least $75,000 annually. Between 2016 \nand 2019, the rental market added 1.3 million higher-in­\ncome households while losing 1.0 million households \nwith annual incomes under $75,000, according to data \nfrom the American Community Survey (Figure 8). This \ntrend reversed during the pandemic. Between 2019 \nand 2022, most renter growth came from the 1.1 million \nadditional households with incomes under $75,000. \nOver this same period, the number of renter house­\nholds with higher incomes rose by just 16,000.\nThis recent slowdown in renter household growth \namong those with incomes of $75,000 or more was \nat least partially attributable to increasing rates of \nhomebuying by renters with even higher incomes who \ntook advantage of the low interest rates available in \nthe early part of the pandemic. The modest loss of \n1\n2\n3 or More\nNumber of People in Household\n-1.0\n-0.5\n0.0\n0.5\n1.0\n1.5\nUnder $30,000\n$30,000-$74,999\n$75,000 and Over\nHousehold Income\n2016-2019\n2019-2022\nNote: Household incomes are adjusted for inflation using the CPI-U for All Items.\nSource: JCHS tabulations of US Census Bureau, American Community Survey 1-Year Estimates.\nFigure 8\nLess Affluent, Smaller Households Boosted Pandemic-Era Renter Growth\nChange in Renter Households (Millions)\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n10\n\n\n--- Page 13 ---\nrenter households earning at least $150,000 was more \nthan offset by the uptick in homeowners in this income \nbracket. Additionally, some of the decrease was likely \namong renter households with higher incomes that \ncapitalized on rent deals in the early months of the \npandemic to split into smaller households with lower \nincomes. The largest increases in renter households \nbetween 2019 and 2022 came from single- and \ntwo-person households with incomes below $75,000.\nIn fact, single-person renter households grew most \nacross all income brackets during the pandemic, \nincreasing by 1.2 million between 2019 and 2022, \neclipsing the 722,000 households of that type added \nbetween 2016 and 2019. Rental demand also bene­\nfited from roommate (416,000) and extended family \n(223,000) arrangements, with most of this growth \ncoming from two-person households. Further contrib­\nuting to the growth in smaller renter households was \na decrease in the number of married couples with \nchildren and single parents, possibly explained by \ntransitions to homeownership or by the splitting of \nthese households into new ones.\nA New Generation Is Driving Demand \nRenting plays an important role in housing people \nthroughout the life course. For younger people, renting \nprovides an opportunity to live independently while \nentering adulthood. Delayed marriage and parent­\nhood have also increased the attractiveness and the \nnecessity of renting further into adulthood. For people \nat older ages, rental homes can support indepen­\ndent living through better accessibility and reduced \nmaintenance. At all ages, renting is a flexible option \nthat makes it easier for people to adjust their housing \naccording to their personal circumstances.\nOver the past decade, the bulk of the growth in renter \nhouseholds has come from younger generations. \nThe millennial generation, those born between 1980 \nand 1994, drove much of the renter growth until 2016. \nThis generation is not only the largest, but also more \nlikely to rent than prior ones at the same ages. Having \ncome of age during the Great Recession with fewer \njob prospects, lower wages, high student loan debt, \nand tightened mortgage lending, many have delayed \nhomeownership. As a result, the number of millenni­\nal-headed renter households grew by an enormous \n6.2 million between 2009 and 2019 to a peak of 16.2 \nmillion (Figure 9).\n0\n2\n4\n6\n8\n10\n12\n14\n16\n18\n2007\n2008\n2009\n2010\n2011\n2012\n2013\n2014\n2015\n2016\n2017\n2018\n2019\n2020\n2021\n2022\nGen Z\n(Born 1995–2009)\nMillennial\n(Born 1980-1994)\nGen X\n(Born 1965-1979)\nBaby Boom \n(Born 1946-1964)\nPre-Boom \n(Born 1945 or Earlier)\nNote: Data for 2020 are based on 2019 and 2021 values because of pandemic data disruptions.  \nSource: JCHS tabulations of US Census Bureau, American Community Survey 1-Year Estimates.\nFigure 9\nNew Rental Demand Has Shifted from Millennials to Gen Z\nRenter Households (Millions)\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n11\n\n\n--- Page 14 ---\nWhile millennials will remain a large source of rental \ndemand in coming years, they are no longer fueling the \ngrowth in renter households. Rather, they are aging into \nprime homeownership years, a transition that markets \nare already witnessing. The number of renter house­\nholds headed by a millennial fell by 797,000 between \n2019 and 2022 as their homeownership rate increased \nby 9 percentage points during the same period.\nInstead, members of the slightly smaller but still large \nGen Z, individuals born between 1995 and 2009, are \ndriving rental demand. Already, these individuals \nheaded 7.9 million renter households in 2022. Going \nforward, overall growth in renter households will \ndepend upon whether the rise in the number of Gen \nZ renters will be sufficient to overcome the eventual \ndecline in older renters. This was true for millennials \nduring the 2000s and 2010s. However, Gen Z may follow \na different trajectory, given that this generation already \nhas higher homeownership rates than millennials did \nat the same age.\nBaby boomers also continue to help sustain longer-\nterm rental demand. Even though the number of renter \nhouseholds headed by a baby boomer is decreasing, \nthe generation is so much bigger than any before it \nthat the number of older renters is still growing. In the \nlast five years alone, renter households headed by \nsomeone age 65 and over increased by more than \n1 million. With the oldest baby boomers turning 80 in \n2026—an age when more people turn to renting—a \nwider range of affordable rental options for older \nadults will be required to accommodate their changing \nneeds. Renting will be an especially attractive option \nfor older adults who want to age in their community, \nreduce their maintenance responsibilities, and access \nthe shared spaces for social interaction and accessi­\nbility features more common in multifamily buildings.\nHigher-Income Households Are \nExerting More Influence\nWhile households with lower incomes led growth \nduring the pandemic, higher-income households have \nincreasingly driven rental demand over the longer \nterm. The number of renter households with incomes \nof $75,000 or more has risen 43 percent since 2010, to \n13.5 million as of 2022 (Figure 10). Likewise, the share of \nrenters earning at least $75,000 annually has risen by \nmore than 6 percentage points to 30 percent during \nthis same period. Much of the growth has come from \n0\nUnder $15,000\n$15,000-$29,999\n$30,000-$44,999\n$45,000-$74,999\nHousehold Income\n2010\n2016\n2022\n2\n4\n6\n8\n10\n12\n14\n$75,000 and Over\nNote: Household incomes are adjusted for inflation using the CPI-U for All Items.  \nSource: JCHS tabulations of US Census Bureau, American Community Survey 1-Year Estimates.\nFigure 10\nHouseholds with Higher Incomes Have Fueled Long-Term Demand\nRenter Households (Millions)\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n12\n\n\n--- Page 15 ---\nrenters who are married and have college educations, \na demographic that fits previous generations’ profile \nof first-time homebuyers.\nHigher-income renters have characteristics that set \nthem apart from the typical renter household. For \nstarters, they are younger. Fully 42 percent of them are \naged 35–54, as compared to 34 percent of all renters. \nThey are also more likely to be married, with 40 percent \nwedded versus 24 percent of all renter households. \nGiven these demographic trends, it is perhaps unsur­\nprising that higher-income renters are slightly more \nlikely to have children and larger households than the \ngeneral population of renters. And because income \ncorrelates with education, these renters have higher \nlevels of education, with more than half possessing at \nleast a bachelor’s degree, including 20 percent with a \ngraduate or professional degree.\nFinally, renters with higher incomes are dispropor­\ntionately white (53 percent) or Asian (9 percent) as \ncompared to all renters (50 percent and 5 percent, \nrespectively). Meanwhile, Black householders are \nunderrepresented in this market segment, consti­\ntuting just 13 percent of these renters (compared to 19 \npercent of all renters). Households headed by Hispanic \n(20 percent), multiracial (4 percent), and Native Amer­\nican (0.4 percent) renters are evenly represented.\nRenter households with incomes of at least $75,000 \nare most common in metros with high rentership rates, \nmedian household incomes, and housing costs. In \nthese areas, renting is more the norm, and homeown­\nership options may be prohibitively expensive, even for \nhouseholds with higher incomes. For example, in both \nSan Jose and San Francisco, households with higher \nincomes make up more than half of all renters. In these \ntwo metros, the rentership rate among higher-income \nhouseholds is more than 35 percent, as compared to \n22 percent nationally.\nConversely, households with higher incomes make up \nsmaller shares of renters in markets where housing \ncosts are more affordable and incomes tend to be \nlower. Most of these metros are located in the South or \nMidwest, including Cleveland, Columbia, El Paso, and \nJackson, where rentership rates among households \nwith annual incomes at or above $75,000 are under \n18 percent.\nThe elevated rentership rate among higher-income \nhouseholds in expensive markets suggests that \nobstacles to homeownership are formidable, even \nfor households with above-average earnings. Industry \nsurveys have found that many renters hope to own a \nhome someday but consider their goal out of reach. A \nquarter of millennial households surveyed by Apart­\nment List, for example, reported that they will always \nrent, citing affordability as the biggest barrier to home­\nownership. Rising rents have challenged renters’ ability \nto save for a downpayment. At the same time, the low \nvolume of for-sale inventory and escalating home \nprices make it difficult for even higher-income renters \nto become homeowners.\nStill, attractive rental options—such as single-family \nhomes and apartments with amenities—in desirable \nlocations have encouraged some households with \nhigher incomes to continue to rent. In 2022, about 8.5 \nmillion renter households made at least $100,000 per \nyear, incomes that put the nation’s median-priced \nhome within reach. Of these households, 39 percent \nlived in single-family rental homes. An additional 19 \npercent lived in apartments in large multifamily build­\nings with at least 50 units, properties that tend to be in \nurban areas and rich with amenities. A third of house­\nholds with incomes of $100,000 or more lived in new \nrental units built after 2000.\nThe existing range of rental options may enable \nthese more affluent households to live in the type of \nhousing they want, in a location that suits them, and \nin a high-quality home while still enjoying the flexi­\nbility and convenience of renting. These advantages \nmay make renting a more attractive option than \nhomebuying, even for households that could afford \nto become homeowners.\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n13\n\n\n--- Page 16 ---\nMany Renters Are Economically \nVulnerable\nWhereas renting may be a choice for some house­\nholds with higher incomes, it may be the only option \nfor those who earn less. The median renter house­\nhold income in 2022 was about $47,000, and a signif­\nicant share of renters have much lower incomes. \nThirty-two percent of renters (14.6 million) had house­\nhold incomes below $30,000 in 2022. According to the \nmost recent Survey of Consumer Finances in 2022, \nthese renters had a median cash savings of just \n$300 and total net wealth—including retirement \naccounts and other investment funds—of just $3,200. \nThese financially precarious households face a \ngreater risk of housing instability and cost burdens \nbut remain an important source of rental demand.\nThe characteristics of lower-income renter households \ncan add to their economic vulnerability. As compared \nto both the full renter population and the higher-\nincome households that have driven demand over \nthe last decade, households with lower incomes \nare more likely to be headed by an older adult and \nconsist of a single person (Figure 11). Over a quarter \n(28 percent) of renter households with lower incomes \nare headed by someone at least 65 years old, a full \n11 percentage points more than that of all renter \nhouseholds. An additional 16 percent are headed \nby someone between the ages of 55 and 64. The \nolder age distribution contributes to the high share \nof lower-income households that consist of a single \nperson (59 percent) and the low share that have \nchildren (21 percent).\nFurther, lower-income households may be espe­\ncially financially fragile because of their lower levels \nof educational attainment and higher prevalence \nof disability, both of which can limit job prospects. \nMore than half of lower-income renter households (53 \npercent) are headed by someone without a college \ndegree, compared to 38 percent of all renters, and just \n16 percent have at least a bachelor’s degree. Disabili­\nties can make it difficult for households to secure and \nretain employment, depressing household earnings.\nA full 34 percent of all lower-income renter house­\nholds are headed by a person with a disability, the \nmajority of whom are under age 65.\nLower-Income\nRenters\nHigher-Income\nRenters\nAll Renters\nSingle Person\nMarried\nOther Family\nRoommates\nHousehold Type\n0\n10\n20\n30\n40\n50\n60\n70\n80\n90\n100\nLower-Income\nRenters\nHigher-Income\nRenters\nAll Renters\nAge\nUnder 35\n35-44\n45-54\n55-64\n65 and Over\nNotes: Lower-income households earn less than $30,000. Higher-income households earn at least $75,000. Age is for the household \nhead. Other family households include single parents.\nSource: JCHS tabulations of US Census Bureau, 2022 American Community Survey 1-Year Estimates.\nFigure 11\nLower-Income Renters Are More Likely to Be Older and Live Alone\nShare of Households (Percent)\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n14\n\n\n--- Page 17 ---\nAnd because racial discrimination in education and \nlabor markets restricts opportunities and wages, \nhouseholds headed by a Black person are more likely \nto have lower incomes than households of other races \nand ethnicities. Consequently, they constitute an \noutsized share of lower-income renter households. \nA full 42 percent of households headed by a Black \nperson earn less than $30,000 annually, compared \nto 30 percent of those headed by a white person with \nsimilarly low incomes. As a result, households headed \nby a Black person make up a quarter of lower-in­\ncome households despite being just under a fifth of \nall renter households. Likewise, households headed \nby a Native American person face economic chal­\nlenges and discrimination that make them more \nlikely to face financial precarity. Indeed, 42 percent \nof households headed by a Native American person \nare lower income.\nHouseholds with lower incomes constitute a larger \nshare of renters in less expensive markets where \nhomeownership is more attainable and rents are \nmore affordable. Among the 100 most populous \nmetros, lower-income households make up more \nthan 40 percent of renters in more affordable Southern \ncities as well as in deindustrialized Rust Belt cities like \nBuffalo, Toledo, and Cleveland. Additionally, renters \nwith lower incomes disproportionately live in counties \nin smaller metropolitan areas and rural communities, \nand are slightly more likely to live in counties with \npersistent poverty.\nRenting Benefits Mobile Populations\nOne benefit of renting compared to owning a home \nis the relative ease of moving. The lower transaction \ncosts involved in relocating into or out of a rental unit \nmake renting preferable for younger households as \nwell as those who are relatively mobile or looking for \nshorter-term living arrangements. Reflecting these \nbenefits, the renter mobility rate—the yearly share \nof renters who change residences—is much higher \nthan that of homeowners. About 16 percent of renters \nreport having moved in the past year, compared to just \n4 percent of homeowners.\nNearly a third \nof renters had \nhousehold \nincomes under \n$30,000 in 2022.\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n15\n\n\n--- Page 18 ---\nEven so, mobility rates among renters have continued \ntrending downward over the last decade. According \nto the Current Population Survey, 25 percent of renters \nmoved during the previous year in 2013, but the rate \ngradually dropped to 20 percent by 2019. It then fell \neven further to 16 percent in 2021 as the pandemic \nprompted record-high lease renewals. The mobility \nrate has held steady at 16 percent through 2023, \nreflecting tightening housing markets and continued \nhigh apartment retention rates.\nIn the event renters did choose to relocate, they often \nopted to remain local. In 2023, 61 percent of renter \nmoves were within the same county, and an additional \n17 percent stayed in state. The remaining moves were \neither from another state (15 percent) or from abroad \n(7 percent). While overall mobility rates have declined, \ninterstate movers have nonetheless continued to be \nan important source of rental demand. In 2022 alone, \nTexas, Florida, North Carolina, and Arizona each gained \nmore than 18,000 households from domestic migration, \nwhile New York, California, and New Jersey each lost \nmore than 20,000 households.\nTypically, renters move in pursuit of better housing, \nto form a new household, or to be closer to a new job \nor their family. Among those who moved in 2023, the \ntwo most common reasons were for a new job or to \nrelocate to a new or better home (14 percent each). \nThe share who moved for a new or better home in \n2023 was notably lower than in 2019, perhaps because \npeople made these moves earlier in the pandemic \nin response to the increased need for more space. \nAnother 11 percent of moves were for more afford­\nable housing, and 10 percent were due to new \nhousehold formation.\nThe Outlook\nAfter the pandemic-era highs and lows, rental demand \nappears to be stabilizing. The resumption of renter \nhousehold growth in 2023 after a dip earlier in the \npandemic is a positive sign for rental property owners. \nWhether this level of growth will continue remains to \nbe seen. Nevertheless, given the long-term increase \nin renter households, there is likely to be a relatively \nhigh number of renters for years to come.\nLikewise, the underlying age distribution of the US \npopulation also points to sustained rental demand \ngoing forward. A meaningful portion of the large millen­\nnial population is renting later in life than members \nof previous generations. Further, even as millennials \nturn to homeownership in greater numbers, Gen Z \nhas already taken over as the primary driver of rental \ndemand growth. At the same time, the aging of the \nbaby boomers into their 70s and 80s means that those \nwho wish to remain in their communities without the \nresponsibilities of homeownership may transition to \nrenting. Providing affordable, accessible rental options \nfor these older adults will help them to age with dignity \nand security.\nRenting is a preferable housing option for many indi­\nviduals. Units with amenities in desirable locations \nand single-family rentals are increasingly attractive \nto households with higher incomes. For some, these \noptions may provide a stepping stone to homeown­\nership. However, for others, renting is the only option. \nHouseholds that lack the financial resources to \nbecome homeowners continue to rely on the rental \nmarket as their sole source of housing. These house­\nholds are an equally important component of demand. \nEnsuring that they have adequate, affordable housing \nis an ongoing policy challenge.\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n16\n\n\n--- Page 19 ---\nRENTAL HOUSING \nSTOCK \nStrong multifamily housing production continues to shift rental stock composition toward larger buildings. At \nthe same time, the volume of low-rent units is falling, leaving financially vulnerable renters with fewer affordable \noptions. Restrictions on development further limit the availability of rentals in many suburban communities and \nexclude renters from some neighborhoods. Nationwide, the aging rental stock needs significant investment to \nimprove housing quality, accessibility, and resilience to climate-related hazards.\nLarge Buildings Are a Growing Share \nof the Rental Stock\nBetween 2010 and 2022, the total rental supply \nincreased by 4.3 million units to 48.1 million units. This \ngrowth was driven primarily by the construction of \nlarge multifamily buildings (Figure 12). During this \nperiod, the number of apartments in multifamily \nbuildings with 20 or more units grew by 3.3 million, \nto 12.3 million units. The supply in midsize buildings \nwith 5–19 units also increased, though by a modest \n292,000 apartments, to 10.6 million units. Rentals in \nsmall multifamily buildings with 2–4 units, a property \ntype that tends to be more affordable, increased by \njust 103,000, to 8.3 million units.\nCompared to 2010, the supply of single-family homes \nfor rent has grown by 649,000 homes, to 14.9 million in \n2022, although this is down from the peak of 16.1 million \nrecorded in 2016. Many of these homes converted from \nowner-occupancy to rental during the first half of this \nperiod, especially in the aftermath of the foreclosure \ncrisis. However, in the second half of this period, the \ntrend reversed. Beginning in 2016, the supply of single-\nfamily rentals declined every year as homes converted \nto owner-occupancy or were otherwise lost to building \ndemolitions and condemnations. Nevertheless, single-\nfamily homes represented nearly a third of the total \nstock in 2022.\n7\n8\n9\n10\n1 1\n12\n13\n14\n15\n16\n17\n2010\n2012\n2014\n2016\n2018\n2020\n2022\nSingle Family\n2-4 Units\n5-19 Units\n20 or More Units\nNotes: Rental units may be occupied, vacant for rent, or rented \nbut unoccupied. Single-family homes include attached and \ndetached units. Data for 2020 are based on 2019 and 2021 values \nbecause of pandemic data disruptions.  \nSource: JCHS tabulations of US Census Bureau, American \nCommunity Survey 1-Year Estimates.\nFigure 12\nLarger Buildings Account for Most of the Rental \nStock Growth\nNumber of Rental Units (Millions)\n03 \nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n17\n\n\n--- Page 20 ---\nThe disproportionate increase in units in larger multi­\nfamily buildings relative to other rental types has \nchanged the composition of the rental stock. Since \n2010, the share of rentals in large multifamily build­\nings has increased by 5 percentage points and are 25 \npercent of the rental stock as of 2022. Meanwhile, the \nsingle-family rental share dropped by 2 percentage \npoints. Likewise, the shares of rental units in midsize \nand small multifamily buildings each dropped by 1 \npercentage point. Midsize buildings with 5–19 units \naccounted for 22 percent of the rental stock and \nsmaller buildings with 2–4 units constituted 17 percent. \nThe share of manufactured housing, which totaled just \n2.0 million units in 2022, also declined by 1 percentage \npoint over the previous 12 years, to just 4 percent of \nrental units.\nThe shift in rental housing away from smaller prop­\nerties and toward apartments in larger buildings is \ndue mainly to the composition of new construction. \nBetween 2010 and 2022, annual completions of multi­\nfamily rentals grew from 125,000 to 342,000 units, with \n3.5 million units added in this period, according to \nthe Census Bureau Survey of Construction. A full 2.9 \nmillion were apartments in buildings with at least \n20 units, pushing up their share of multifamily rental \ncompletions from 79 percent to 90 percent between \n2010 and 2022.\nWhile annual completions of single-family rentals have \naccelerated rapidly in response to growing demand, \nsingle-family homes built as rentals remained a small \nshare of new construction. Completions of single-\nfamily rentals rose from 26,000 to 67,000 units annually \nbetween 2010 and 2022. In total, 518,000 new single-\nfamily homes built as rentals were completed in this \nperiod, representing 13 percent of new rental units.\nSupply of Low-Rent Units Is Dwindling \nThe supply of low-rent units continues to shrink. These \nunits rent for less than $600 a month—the maximum \namount affordable to a household earning $24,000 \nannually when applying the 30 percent of income \nstandard. In the last decade, the number of low-rent \nunits dropped by 2.1 million, including a loss of 230,000 \nfrom 2021 to 2022 alone. This left just 7.2 million units \nwith rents below $600 as of 2022 (Figure 13). Since 2012, \nthe market also lost an astounding 4.0 million units \nwith rents between $600 and $999. In total, the market \n0\n2\n4\n6\n8\n10\n12\n14\n16\n18\nUnder $600\n$2,000 and Over\nContract Rent\n2012\n2022\n$600-$999\n$1,000-$1,399\n$1,400-$1,999\nNotes: Rents are adjusted for inflation using the CPI-U Less Shelter. Units that are occupied but do not receive payment are excluded. \nContract rents exclude utility costs. \nSource: JCHS tabulations of US Census Bureau, American Community Survey 1-Year Estimates.\nFigure 13\nThe Stock of Low-Rent Units Is Shrinking\nNumber of Rental Units (Millions)\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n18\n\n\n--- Page 21 ---\nlost 6.1 million units renting for less than $1,000, the \nmaximum amount affordable to a household earning \n$40,000 per year. Various market forces have contrib­\nuted to these losses, including rent increases among \nexisting units, building condemnations and demoli­\ntions, and tenure conversions.\nDuring the same period, the supply of units renting \nfor between $1,000 and $1,399 increased by 400,000. \nThe market also gained 4.3 million units with rents \nbetween $1,400 and $1,999, and 4.1 million units renting \nfor $2,000 or more.\nThe declining supply of low-rent units, combined with a \nsteady stream of new construction targeting the high \nend of the market, has shifted the distribution of rents \nupward. In 2022, just 16 percent of units had contract \nrents below $600, down from 22 percent of the rental \nstock in 2012. Meanwhile, the share of units renting for \n$1,400 or more nearly doubled, from 21 percent to 38 \npercent of units.\nThe loss of low-rent units has been geographically \nwidespread, with decreases recorded in 47 states \nand the District of Columbia. Fully 42 states lost more \nthan 10 percent of their low-rent stock between 2012 \nand 2022, including 24 that lost more than 20 percent. \nAmong the hardest hit states were those previously \nconsidered more affordable that have seen swiftly \ngrowing rental demand, including Texas, North Caro­\nlina, and Georgia. Several Midwestern states also expe­\nrienced significant losses despite recording relatively \nslow rental demand, including Ohio, Michigan, and \nIndiana. In more expensive states already short on \nlow-rent units, the net decline extended much farther \nup the rent spectrum, with 16 states losing units at all \nrent levels up to $1,400.\nLow-rent units are an essential source of affordable \nhousing for households with lower and moderate \nincomes. In 2022, 60 percent of renter households \nliving in low-rent units earned less than $30,000 \nper year, including 36 percent with annual incomes \nbelow $15,000. For many renters at these income \nlevels, $600 a month is a stretch. Using the standard \nThe number of \nlow-rent units has \nfallen by 2.1 million \nin the last decade.\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n19\n\n\n--- Page 22 ---\n30 percent of income calculation, these households \ncan afford a monthly rent of no more than $750 and \n$375, respectively.\nAdditionally, low-rent units help house middle-income \nhouseholds that may also struggle to secure afford­\nable housing. In 2022, 28 percent of units renting for less \nthan $600 were occupied by middle-income house­\nholds earning between $30,000 and $75,000 annually. \nIncreasing the availability of units with lower rents and \npreserving the existing supply of these units is critical \nto ensuring that financially vulnerable households are \nable to secure housing they can afford.\nSupply Varies Across Geographies\nThe composition of the rental stock varies widely \nby region. In 2021, a third of rentals in the Northeast \nwere in large multifamily buildings, well above the \nWest (26 percent), Midwest (22 percent), or South (21 \npercent). The Northeast also had the largest propor­\ntion of rental units in small multifamily buildings, at 27 \npercent, compared to just 19 percent in the Midwest, \n15 percent in the West, and 14 percent in the South. \nConversely, the Northeast had the smallest proportion \nof single-family rentals, at 19 percent, while single-\nfamily homes were about a third of the rental stock \nin all other regions.\nRent levels likewise vary across regions, reflecting \ndifferences in the composition and age of the stock, \nhousehold incomes, and housing demand. High-cost \nrentals are most common in the West and Northeast. \nIn 2021, 45 percent of units in the West had rents of at \nleast $1,500, as did 34 percent of rentals in the North­\neast, well above the share in the South (19 percent) or \nthe Midwest (10 percent).\nThere are also notable differences in the rental stock \namong urban, suburban, and nonmetropolitan areas \n(Figure 14). In 2021, 40 percent of occupied rentals were \nin urban areas, 48 percent were in suburban areas, \n$600-$999\n$1,000-$1,249\n$1,250-$1,499\n$1,500 and Over\nUrban\nSuburban\nNonmetropolitan\nContract Rent\nUrban\nSuburban\nNonmetropolitan\nStructure Type\nUnder $600\nManufactured\n2-4 Units\n5-19 Units\n20 or More Units\nSingle Family\n0\n10\n20\n30\n40\n50\n60\n70\n80\n90\n100\nNotes: Only occupied rental units are depicted. Manufactured housing includes other structures such as boats and RVs. Contract \nrents exclude utility costs. Urban and suburban tracts fall within metropolitan statistical areas. Nonmetropolitan tracts fall outside of \nmetropolitan areas.\nSource: JCHS tabulations of US Census Bureau, 2021 American Community Survey 5-Year Estimates.\nFigure 14\nThe Rental Stock Varies Widely Across Markets, with Low-Rent Units More Common in  \nNonmetropolitan Areas\nShare of Rental Stock (Percent)\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n20\n\n\n--- Page 23 ---\nand 11 percent were in communities outside metro­\npolitan areas. In urban areas, over half (51 percent) of \nthe housing stock was rented, significantly more than \nin suburban (30 percent) and nonmetropolitan areas \n(28 percent). Nearly three-quarters of rentals in urban \nneighborhoods were multifamily units, compared to \n59 percent in suburban neighborhoods and 41 percent \nin neighborhoods outside metropolitan areas. Apart­\nments in large multifamily buildings with 20 or more \nunits were also far more common in urban communi­\nties, accounting for 31 percent of the rental stock there, \nwell above the shares in suburban (19 percent) and \nnonmetro (8 percent) areas.\nIn contrast, nonmetropolitan and suburban commu­\nnities have a much higher proportion of single-family \nand manufactured homes for rent. In 2021, about half \nof rental units outside metropolitan areas were single-\nfamily homes, compared to 36 percent in suburban \nareas and 26 percent in urban areas. Manufactured \nhousing accounted for 13 percent of all rentals in \nnonmetropolitan communities but was much less \ncommon in suburban areas (5 percent) and virtually \nabsent from urban areas (1 percent). In fact, while \nnonmetropolitan areas accounted for just 11 percent \nof all rental units, they contained a third of the nation’s \nmanufactured housing supply.\nRent levels also vary greatly across urban, suburban, \nand nonmetropolitan geographies. Urban and \nsuburban areas have significantly higher shares of \nunits renting for at least $1,500 (25 percent and 26 \npercent, respectively), compared to just 4 percent of \nrentals in communities outside metropolitan areas. \nNonmetropolitan areas tended to be priced lower, \nwith 53 percent of units renting for less than $600, \ncompared to just 15 percent of rentals in suburban \nareas and 17 percent in urban areas. In total, commu­\nnities outside metropolitan areas contain just over a \nquarter of the nation’s stock of units that rent for less \nthan $600. \nLocation of Rental Stock Contributes \nto Inequalities\nThe nation’s rental stock is unevenly distributed across \nneighborhoods, limiting where renters can live. In 34 \npercent of neighborhoods, less than 20 percent of the \nhousing stock is available to rent, resulting in commu­\nnities that are essentially rental deserts. Conversely, \nowner-occupied homes account for less than 20 \npercent of the stock in just 6 percent of neighborhoods.\nRental deserts tend to be located in suburban areas \nwhere restrictive land use policies make it difficult to \nbuild multifamily housing, which is predominantly \nrenter-occupied. In 2021, suburban neighborhoods \nconstituted 55 percent of census tracts nationally, \nbut 68 percent of neighborhoods where less than 20 \npercent of the stock is available to rent.\nSingle-family homes, which tend to be owner-occu­\npied, are much more common in these communi­\nties. In neighborhoods where less than 20 percent of \nhousing is rental, single-family homes accounted for \n85 percent of all housing in 2021, compared to just 17 \npercent of the housing stock in neighborhoods that are \nmore than 80 percent rentals. Large multifamily build­\nings with 20 or more units accounted for just 2 percent \nof the housing stock in rental deserts, compared to 42 \npercent of the units in neighborhoods with abundant \nrental housing.\nThe lack of rental options in many neighborhoods rein­\nforces inequities and contributes to socioeconomic \nsegregation. Communities with little rental housing \nhave higher median incomes, reflecting renters’ \ntypically lower annual incomes. In 2021, the median \nhousehold income in rental desert neighborhoods was \n$92,000, almost twice that of the $49,000 median in \nareas with robust rental options.\nFurther, the limited availability of rental housing in some \nneighborhoods constrains housing options for many \npeople of color. A long history of racially discriminatory \ngovernment policies and real estate practices has \nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n21\n\n\n--- Page 24 ---\nrestricted neighborhood choice and prevented many \nhouseholds of color from becoming homeowners. \nThese actions, along with discrimination in education \nand labor markets, have contributed to higher rent­\nership rates among Black and Hispanic households.\nThe legacy of these inequities is evident in the low \nshare of households of color in rental deserts. In 2021, \npeople of color headed just 24 percent of households \nin rental deserts, as compared to 66 percent of house­\nholds in neighborhoods where more than 80 percent \nof homes are rented. The share of households headed \nby a Hispanic person was three times higher in neigh­\nborhoods with abundant rental options than in rental \ndeserts (30 percent versus 10 percent), and the share \nheaded by a Black person was nearly four times higher \n(22 percent versus just 6 percent).\nThese patterns of residential segregation are difficult \nto undo in part because they are reinforced by various \nland use regulations. Single-family zoning and other \ndensity limitations restrict the development of multi­\nfamily buildings, effectively making it more challenging \nto add rental housing. Several states and communities \nhave recently enacted zoning changes to allow for \nmore types of housing in areas previously zoned exclu­\nsively for single-family homes. These zoning changes \ncould increase rental options in neighborhoods where \nfew exist, help expand the geographic options avail­\nable to renters, and better integrate communities.\nHousing Inadequacy Persists\nThe rental stock is older than at any other recorded \ntime. In 2021, the median age of renter-occupied\nhomes reached 44 years, up from 39 years a decade \nearlier and 34 years in 2001. Investment in the aging \nhousing stock is vital, given the persistence of \nsubstandard housing. Despite improvements in \nbuilding codes and construction standards, as well \nas upgrades and repairs to existing units, 3.9 million \nrenter households lived in homes that did not meet \nbasic standards for suitability and safety in 2021. This \nrepresents an overall increase of 350,000 households \nover the past two decades.\nThe rental stock is \nolder than it’s ever \nbeen at a median \nage of 44 years.\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n22\n\n\n--- Page 25 ---\nAccording to data from the most recent American \nHousing Survey, in 2021, 8.4 percent of renter house­\nholds lived in substandard housing with multiple prob­\nlems such as structural deficiencies, a lack of upkeep, \nor the inconsistent provision of basic features such \nas hot and cold running water, heat, and electricity. \nPhysical inadequacy from disrepair and structural \ndeterioration is much more common in older homes. \nOverall, 13 percent of units built before 1940 were clas­\nsified as physically inadequate in 2021, more than twice \nthe 6 percent share of newer units built between 2000 \nand 2021.\nGiven that substandard units tend to have low rents, \nhouseholds with lower incomes are more likely to \noccupy these homes (Figure 15). In 2021, 12 percent \nof renter households earning less than $15,000 lived \nin inadequate housing, double the 6 percent of \nrenters with incomes of $75,000 or more. While most \nsubsidized housing properties meet basic safety \nand suitability standards, severe underfunding of \n0\n2\n4\n6\n8\n10\n12\nBlack\nHispanic\nWhite\nAsian\nUnder\n$15,000\n$15,000-\n$29,999\n$30,000-\n$44,999\n$45,000-\n$74,999 \n$75,000\nand Over\nAll\nHouseholds\nRace/Ethnicity \nHousehold Income\nNotes: Housing inadequacy refers to a variety of structural deficiencies, such as large holes and leaks or the absence of basic features \nincluding plumbing, electricity, water, or heat. HUD classifies units as moderately or severely inadequate depending on the type and \nnumber of these physical problems. Black, Asian, and white householders are non-Hispanic. Hispanic householders may be of any race. \nSource: JCHS tabulations of US Department of Housing and Urban Development, 2021 American Housing Survey.\nFigure 15\nRenters with Lower Incomes and Those of Color Disproportionately Live in Inadequate Housing\nShare of Renters in Inadequate Housing (Percent)\nproject-based assistance programs has left 1 in 10 \nrenters living in public housing or HUD-assisted private \nmultifamily housing with inadequate conditions. \nDespite inspection standards, 11 percent of renters \nwith Housing Choice Vouchers lived in inadequate \nconditions in 2021.\nBlack and Hispanic households are more likely to live \nin inadequate housing, a product of long-standing \ndiscriminatory policies and practices that have often \nsteered households of color to neighborhoods with \nolder and less-adequate housing. In 2021, 10 percent \nof Black and Hispanic renter households lived in inad­\nequate housing, well above the shares for white (7 \npercent) and Asian households (6 percent). These \ndisparities persist even after accounting for differences \nin income. A HUD report also found that American \nIndian and Alaska Native households dispropor­\ntionately experience poor housing quality, including \nunits with structural problems, system deficiencies, \nand overcrowding.\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n23\n\n\n--- Page 26 ---\nEven among units that meet the criteria for phys­\nical adequacy, many have significant problems that \nimpact occupant health and safety. A 2023 study by \nthe Federal Reserve Bank of Philadelphia found that \nin 2022, 37 percent of renter-occupied units had at \nleast one critical home repair need, such as fixing a \ncracked foundation, replacing broken equipment, or \nremediating mold, and estimated the total cost of \naddressing these deficiencies at $51.5 billion.\nEven the structurally adequate stock does not typi­\ncally meet the needs of people with disabilities. In \n2019, 4 percent of renter households reported diffi­\nculties entering or navigating their homes, including 18 \npercent of renters age 80 and over, as reported in the \nAmerican Housing Survey. And nearly half of renters \nwith disabilities said their homes were minimally or \nnot at all accessible, according to a 2023 Freddie Mac \nsurvey. Given the aging of both the rental stock and \nthe nation’s population, there is an urgent and growing \nneed to repair or modify existing units to ensure habit­\nability, safety, and accessibility.\nExposure to Disasters Threatens the \nRental Stock\nEnvironmental hazards such as wildfires, flooding, \nearthquakes, and hurricanes increasingly jeopar­\ndize the health and safety of renters and threaten to \ndamage or destroy housing. About 41 percent of the \nnation’s occupied rental stock (18.2 million units) is \nlocated in areas exposed to substantial weather- and \nclimate-related threats as measured by expected \nannual economic losses for multiple hazards, \naccording to the Federal Emergency Management \nAgency’s National Risk Index.\nThese areas are geographically diverse, reflecting the \nvariety of acute and chronic environmental hazards \nthat impact every part of the country (Figure 16). Cali­\nfornia has the most rental units located in census tracts \nwith at least moderate expected annual economic \nlosses caused by hazards. There, 4.6 million units—77 \npercent of the state’s rental stock—are at risk of \ndamage or destruction, followed by Florida, with 2.4 \nmillion units (89 percent) at risk.\nNumber of Rental Units \nin High-Risk Counties\nUnder 2,000\n2,000–9,999\n10,000–19,999\n20,000 and Over (Up to 1.6 Million)\nNotes: High-risk areas have a relatively moderate, \nrelatively high, or very high expected annual loss \n(EAL) score. EAL represents the average economic \nloss in dollars resulting from natural hazards each \nyear. The number of units in high-risk counties is \naggregated from the tract level.\nSource: JCHS tabulations of Federal Emergency \nManagement Agency, July 2023 National Risk \nIndex EAL data, and US Census Bureau, 2021 \nAmerican Community Survey 5-Year Estimates.\nFigure 16\nMore Than 18 Million Rental Units Are Under Threat from Environmental Hazards\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n24\n\n\n--- Page 27 ---\nNationally, more than a third of units in small, midsize, \nand large multifamily buildings (35–40 percent) \nare located in census tracts with substantial annual \nlosses, as are 45 percent of single-family rentals \nand just over half of manufactured rentals. Because \nmanufactured housing units are the most likely to \nbe classified as physically inadequate, they may be \nespecially susceptible to damage or destruction from \ntheir hazard exposure.\nThe already limited supply of low-rent and feder­\nally subsidized units is also at risk. Indeed, 3.2 million \nunits with rents below $600 (38 percent) are in at-risk \nareas. An additional 1.2 million Low-Income Housing \nTax Credit units (40 percent) are at risk from envi­\nronmental hazards, along with 34 percent of proj­\nect-based HUD units. This includes 960,000 units that \nare public housing, Project-Based Section 8, affordable \nhousing for older adults, and supportive housing for \nhouseholders with disabilities. Also at risk are 200,000 \nunits (52 percent) subsidized by the US Department \nof Agriculture’s rural multifamily housing program. \nThe growing exposure to hazards will only compound \nthese units’ numerous preservation needs.\nNotably, newer rental units are much more likely to be \nvulnerable to weather- and climate-related hazards. \nNearly half of rentals built in 2000 or later are located \nin areas with substantial losses, double the 24 percent \nof rentals built before 1940. Still, those built before \n1940 have the highest rate of physical inadequacy of \nany rental units, so they may be more vulnerable to \ndamage caused by environmental hazards.\nAs a growing number of rental units are damaged by \nenvironmental hazards, the cost to repair and rebuild \nhomes will increase, as will the insurance costs in high-\nrisk areas. At the same time, the escalating frequency, \nseverity, and diversity of disasters, coupled with the \nmagnitude of their likely damages, will necessitate \ngreater investments in pre-disaster mitigation and \nclimate adaptation strategies for both properties and \nregions. Otherwise, the increasing incidence of costly \ndisasters will almost certainly render an increasing \nnumber of rental units uninhabitable, forcing resi­\ndents to relocate and threatening to further reduce \nthe supply of rental housing.\nThe Outlook\nWith more supply coming online across the country, the \nrental stock is likely to expand, though with a changing \ncomposition. A growing share of the rental stock is \nmore expensive units in larger buildings. New construc­\ntion is furthering this trend by increasingly targeting \nthe high end of the market. In contrast, the supply of \nunits in small multifamily buildings—which tend to \nhave lower median rents—remains largely unchanged.\nThe shifting composition, coupled with the high cost \nof new construction and the deep need at the lower \nend of the market, suggests that new market-rate \nsupply alone will do little to bring immediate relief to \nthose with lower incomes. For these households, the \nnumber of affordable options is declining as low-rent \nunits are demolished, converted to owner-occupancy, \nor repriced at higher rents.\nMoreover, the lack of diverse rental options in many \nsuburban communities constrains where households \ncan choose to live. Regulatory barriers restrict the \namount of multifamily housing that can be built in \nneighborhoods with few rental opportunities.\nAdditionally, the existing stock requires significant \ninvestment. The level of structural inadequacy has \nnot improved in decades, and critical repairs and \nreplacements are imperative to ensure that the units \nare of decent quality. Further, steps must be taken to \nmitigate the impact of climate-related hazards on \nlow-rent and subsidized units while reducing the loss of \nthe stock and preserving its affordability. Finally, there \nis an urgent need to make accessibility modifications \nin response to the nation’s rapidly aging population. \nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n25\n\n\n--- Page 28 ---\nRENTAL\nMARKETS \nA steady stream of new supply and stabilizing demand have cooled rental markets from their pandemic-induced \nfrenzy. As vacancy rates have risen from historic lows, rent growth has plummeted from its record-breaking \npace. While multifamily housing completions remain near historic highs, construction starts are slowing as \ninterest rates rise. The increasing costs of debt and equity have dampened multifamily performance and raised \nexpenses for apartment operators. Nevertheless, the relatively strong performance of multifamily properties \nover the longer term has attracted new investors to the rental market.\nRent Growth Cools as Vacancies Rise \nRobust new supply and stabilizing demand have \nbrought rent growth to a near standstill. Rents for \nprofessionally managed apartments grew just 0.4 \npercent annually in mid-2023. This is a dramatic turn­\naround from the prior year when apartment rents \nincreased by a record-breaking 15.3 percent year \nover year. The current pace is more than 3 percentage \npoints below the 3.6 percent pace averaged in the five \nyears leading up to the pandemic. \nRent growth slowed across property classes. For higher-\nquality Class A units, rent growth decelerated from a \nrecord-breaking 18.5 percent annual pace in early 2022 \nto just 0.8 percent in the third quarter of 2023. Similarly, \nrents for Class B and Class C apartments grew annu­\nally by just 0.1 percent and 0.7 percent, respectively, in \nthe third quarter of 2023—down from 16.1 percent and \n8.5 percent at the beginning of 2022.\nRents for single-family units also slowed, according to \nthe CoreLogic Single-Family Rent Index. In this market \nsegment, rents grew just 2.9 percent year over year \nin August 2023, significantly below the record-high \ngrowth of more than 14 percent in 2022 and similar \nto the pre-pandemic annual growth rate. Further, the \nConsumer Price Index for rent of primary residence, \nwhich covers the entire rental stock and is slow to \nregister changes, decelerated in mid-2023 from a \nfour-decade high of 8.8 percent in March 2023 to 7.2 \npercent in October 2023. \nThe slowdown in apartment rent growth was \ngeographically widespread. In the third quarter of 2023, \njust 1 percent of markets experienced rent growth of \nat least 10 percent annually, down from 50 percent of \nmarkets a year earlier. Instead, the majority of markets \n(61 percent) experienced only moderate rent growth \nunder 5 percent, as compared to just 4 percent of \nmarkets in the prior year. And whereas not a single \nmarket reported negative rent growth in mid-2022, \nrents declined in 32 percent of markets in mid-2023. \nThe areas with the fastest-growing rents in the third \nquarter of 2023 include many less expensive markets \nin the South, Midwest, and Northeast, such as Midland \n-Odessa, Madison, Champaign-Urbana, Trenton, and \nSpringfield, Massachusetts, where apartment rents \ngrew by at least 6 percent annually. In contrast, the \nbulk of the markets with declining rents was in the West \nand South, with year-over-year decreases of at least 4 \npercent in Boise, Phoenix, Austin, and Las Vegas. Simi­\nlarly, single-family rent growth was lowest or negative \nin metros in the West and South, including Las Vegas, \nMiami, and Austin. While slowing rent growth may help \n04\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n26\n\n\n--- Page 29 ---\nto address the affordability crisis, any relief will only be \nincremental, given that rents mostly remain elevated \ncompared to pre-pandemic levels. \nSome of the slowing rent growth is attributable to \nrising vacancy rates. Nationally, the rental vacancy \nrate reached 6.6 percent in the third quarter of 2023, \naccording to the Census Bureau’s Housing Vacancy \nSurvey. After falling to a pandemic low of 5.6 percent \nrecorded in late 2021, the recent vacancy rate was on \npar with the 6.9 percent rate averaged in the five years \npreceding the pandemic. \nRealPage data show an even more dramatic shift \nfor professionally managed apartments (Figure 17). \nThe vacancy rate for these rental units climbed to 5.5 \npercent in the third quarter of 2023, a sharp turnaround \nfrom early 2022, when surging demand brought the \nvacancy rate to a record low of just 2.5 percent in the \nfirst quarter. Since then, vacancy rates for professionally \nmanaged apartments have increased fastest in the \nSouth (up 3.5 percentage points, to 6.3 percent) and the \nWest (up 2.9 percentage points, to 5.2 percent). Nation­\nally, vacancies are somewhat higher in the most expen­\nsive Class A market segments since a large volume of \nnewly constructed units was added to the stock. \n0\n1\n2\n3\n4\n5\n6\n7\n2015\n2016\n2017\n2018\n2019\n2020\n2021\n2022\n2023\nUS\nNortheast\nMidwest\nSouth\nWest\nNote: Vacancy rates are four-quarter trailing averages for \nprofessionally managed apartments in buildings with five  \nor more units. \nSource: JCHS tabulations of RealPage data.\nFigure 17\nApartment Vacancy Rates Are Rising Every-\nwhere, Most Dramatically in the South\nApartment Vacancy Rate (Percent)\nHigh Interest Rates Constrain \nMultifamily Financing\nThe recent uptick in interest rates from their historic \nlows is cooling rental market activity. The interest rates \nfor fixed-rate multifamily loans are often anchored \nto the yield for 10-year Treasury notes. In the second \nquarter of 2023, the yield rate on these Treasuries was \n3.6 percent, nearly 3 percentage points above the rate \nrecorded in the first year of the pandemic and the \nhighest since the Great Recession. As a result, apart­\nment mortgage rates jumped to 5.5 percent for 7- and \n10-year fixed-rate loans in June 2023, according to \nMSCI—an increase of more than two percentage points \nfrom October 2021.\nRising interest rates increase the cost of the debt that \ninvestors and developers use to acquire and build \nmultifamily properties. At the same time, high Treasury \nyields increase the cost of equity, as investors require \nhigher returns to compete with lower-risk Treasury \nnotes. Consequently, it becomes harder to make proj­\nects financially feasible. To make the same project \nwork with an equal rate of return in a high interest rate \nenvironment, property developers and owners would \nneed more revenue to offset the increased capital \ncosts, meaning rents would need to be higher. \nLenders typically want properties to have a debt \nservice coverage ratio—the ratio of total monthly net \nincome to total monthly debt service payments—of at \nleast 1.2. However, the high cost of debt in 2023 has, all \nelse being equal, pushed down debt service coverage \nratios, making it more difficult for developers to qualify \nfor the same amount in loans. Knowing they would \nlikely be declined, potential borrowers have pulled \nback from even applying for financing. More than half \nof the banks surveyed by the Federal Reserve noted \nthat demand for multifamily loans has decreased. \nAdditionally, uncertainty about apartment perfor­\nmance and the broader economy has tightened \nmultifamily underwriting among nearly two-thirds \nof the surveyed banks. \nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n27\n\n\n--- Page 30 ---\nThe slowdown in borrowing and lending has been \nsubstantial. According to the Mortgage Bankers \nAssociation (MBA), multifamily mortgage orig­\ninations dropped 48 percent year over year in the \nsecond quarter of 2023. With declining originations, \nthe amount of multifamily debt outstanding increased \nby less than $30 billion in the second quarter to $2.03 \ntrillion, the weakest second-quarter showing in four \nyears (Figure 18). \nNevertheless, the sources of multifamily lending \nhave remained relatively stable. The government-\nsponsored entities Fannie Mae and Freddie Mac \ncontinued to hold nearly half of all multifamily mort­\ngage debt and posted the largest quarterly gain of any \ninvestor group in mid-2023. Banks and thrifts increased \ntheir holdings at about half the rate of Fannie Mae and \nFreddie Mac but still held 30 percent of multifamily \nmortgage debt. Meanwhile, mortgage debt held in \ncommercial mortgage-backed securities (CMBS) \nmade up just 3 percent of the market. \n0\n10\n20\n30\n40\n50\n60\n2015\n2016\n2017\n2018\n2019\n2020\n2021\n2022\n2023\nQuarterly Change\nAverage Change (4-Quarter Trailing)\nSource: JCHS tabulations of Mortgage Bankers Association data.\nFigure 18\nMultifamily Mortgage Flows Are Slowing\nMultifamily Mortgage Debt Outstanding (Billions of Dollars)\nMultifamily Starts Slow as \nCompletions Remain High\nMultifamily construction is slowing in the face of soft­\nening rent growth and rising vacancy and interest \nrates. After averaging 536,000 units in the first six \nmonths of 2023, multifamily starts slowed to a season­\nally adjusted annual rate of 402,000 units in October \n2023. Though this marked a 30 percent decline from \nthe pace one year earlier, starts are decreasing from \nextremely high levels and remain relatively robust. \nWhile multifamily starts are cooling, the single-family \nbuilt-for-rent sector has remained strong. A small \nshare of new single-family construction is built specif­\nically for the rental market. However, the number has \ngrown steadily over the last decade, with an espe­\ncially large uptick during the pandemic. In 2022, 69,000 \nsingle-family rental homes were started, a 77 percent \nincrease over 2019. In the third quarter of 2023, single-\nfamily rental starts hit a new record high with an annual \nrate of 70,000 homes. \nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n28\n\n\n--- Page 31 ---\nMultifamily units already under way also continue to \ncome online at historically high numbers (Figure 19). \nOn a seasonally adjusted annualized basis, 436,000 \nmultifamily units were completed in the third quarter \nof 2023, up 30 percent from pre-pandemic levels. This \nhas helped to maintain the steady flow of comple­\ntions despite the slowdown in starts. On a seasonally \nadjusted basis, the number of multifamily units under \nconstruction reached a record high of 1.0 million units \nin July 2023 that continued through October 2023. \nThough the slowdown in multifamily starts could lead \nto supply challenges in the coming years, the huge \npipeline of units currently under construction has the \npotential to ease rents in the near term. Research \nby RealPage suggests that new supply puts down­\nward pressure on rent growth in markets where \nnew units are added. In several geographies where \nnew supply increased at a rate above the national \naverage in 2023, rent growth notably cooled. Apart­\nment absorption—the difference between the number \nof households moving in and the number moving \nout—increased in mid-2023, which suggests that new \nsupply is accommodating new households while still \nallowing rents to moderate. \n0\n100\n200\n300\n400\n500\n600\n700\n800\n900\n1,000\n1982\n1984\n1986\n1988\n1990\n1992\n1994\n1996\n1998\n2000\n2002\n2004\n2006\n2008\n2010\n2012\n2014\n2016\n2018\n2020\n2022\nStarted\nUnder Construction\nCompleted\nNote: Data for 2023 represent the seasonally adjusted year-to-date average through October.\nSource: JCHS tabulations of US Census Bureau, New Residential Construction data. \nFigure 19\nCompletions Remain High and a Record Number of Units Are Under Construction\nMultifamily Units (Thousands)\nConstruction Delays and Costs\nAre Increasing\nWhile there is a healthy level of new supply under \nconstruction, the question of when it will come online \nremains unanswered as extended construction time­\nlines become increasingly common. The average \nnumber of months from start to completion for multi­\nfamily buildings reached 17.0 in 2022, up from 15.4 in \n2021 and 10.8 in 2012. Between 2021 and 2022, the time \nto complete single-family homes increased from 7.2 to \n8.3 months. A survey of construction and development \nfirms conducted by the National Multifamily Housing \nCouncil in September 2023 found that 88 percent of \nrespondents reported construction delays.\nSuch interruptions can add to the cost of new devel­\nopment, as do the rising costs of labor and materials. \nIn the second quarter of 2023, the employment cost \nindex for private industry construction workers was \nup 5 percent from the prior year and 14 percent since \nthe start of the pandemic. The price of all inputs to \nnew residential construction, excluding capital invest­\nment, labor, and imports, also increased, up 35 percent \nsince March 2020—more than triple the growth rate in \nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n29\n\n\n--- Page 32 ---\nthe equivalent period before the pandemic. The cost \nof ready-mix concrete, lumber, and brick and clay \nstructural tile each rose by at least 25 percent after \nthe pandemic, with even steeper price increases for \ngypsum (41 percent) and plastic construction products \n(35 percent). \nIn response to both rising costs and the growing \ndemand from higher-income renters, new rental \nunits increasingly target the high end of the market. \nConstruction remains highly concentrated in large \nmetros, where land is most expensive. The NAHB Home \nBuilding Geography Index indicates that 69 percent of \nmultifamily permitting in the second quarter of 2023 \nwas in large metro areas. Reflecting these trends, \nasking rents for new units continue to climb. In the \nsecond quarter of 2023, the median asking rent for \nnew units was $1,760, up 39 percent from the second \nquarter of 2014, according to the Survey of Market \nAbsorption. Between 2015 and 2022, the share of newly \ncompleted units with asking rents of at least $2,050 \nnearly doubled, to 37 percent. In the same period, the \nshare of units with asking rents below $1,050 declined \nby two-thirds, to just 7 percent. This shift in new \nconstruction toward higher-cost apartments means \nmany units are unaffordable to households with low \nand moderate incomes. Whether this new supply will \nimprove affordability for these households in the longer \nterm remains to be seen.\nProperty Performance Weakens\nApartment operators’ cash flow has slowed, not \nonly because of decelerating rent growth but also \nbecause of increased operating costs and insurance \npremiums. According to Yardi Matrix, national total \noperating expenses for multifamily properties rose \nby 9.3 percent in the 12 months ending in June 2023. \nAdditionally, Trepp reported that property insurance \ncosts increased 13.6 percent annually for multifamily \nproperties in large metro areas in 2022. Consequently, \nnet operating incomes for apartments grew by just 3.5 \npercent annually in the third quarter of 2023, according \nto data from the National Council of Real Estate Invest­\nment Fiduciaries. This was a substantial deceleration \nfrom the pandemic high of 24.8 percent in late 2021 \nand put the pace of net operating income growth well \nbelow the 5.3 percent annual rate averaged in the five \nyears preceding the pandemic.\nAgainst this backdrop, apartment capitalization \nrates—the net operating income divided by the prop­\nerty price—have gradually risen. According to Moody’s \nAnalytics, cap rates fell through 2022 before rising by \n0.9 percentage points over the first three quarters of \n2023 to 5.8 percent. With the high interest rates on \n10-year Treasuries, the cap rate spread was just 1.6 \npercentage points, considerably lower than the 3.5 \npercentage point spread averaged between 2015 \nand 2019. Multifamily properties have thus become \na somewhat less attractive investment than before \nthe pandemic. \nRising cap rates are pushing apartment property \nprices down. According to Real Capital Analytics data, \napartment prices fell year over year at the beginning \nof 2023 for the first time since 2010 and were down 13 \npercent annually by the third quarter (Figure 20). This \nwas a substantial turnaround from the peak 23 percent \nprice growth posted at the beginning of 2022. \nAlong with apartment prices, transaction volumes \ncooled in 2023 as potential buyers and sellers paused \namid uncertainty about property performance and \nrising interest rates. According to MSCI, apartment \nsales transaction volumes declined by 72 percent \nin mid-2023 from the prior year. The 2023 second-\nquarter volume was less than 25 percent of the $165 \nbillion peak volume reached at the end of 2021, and \napproximately half of the $42 billion averaged quar­\nterly between 2015 and 2019. \nRisk of Delinquencies Grows\nAs net operating income growth slows, the risk of \ndelinquencies is increasing. So far, the composition \nof multifamily financing and the pre-pandemic period \nof rapidly accruing equity have staved off widespread \ndefaults. Currently, the most at-risk properties are \nthose with shorter-term loans taken out in the last two \nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n30\n\n\n--- Page 33 ---\n0\n100\n200\n300\n-15\n-10\n-5\n0\n5\n10\n15\n20\n25\n30\n2015\n2016\n2017\n2018\n2019\n2020\n2021\n2022\n2023\nChange in Apartment Prices\nIndexed Apartment Prices (Right Scale)\nNotes: Apartment prices are indexed to January 2015. Indexed values represent cumulative percent change.\nSource: JCHS tabulations of Real Capital Analytics, Commercial Property Price Indexes.\nFigure 20\nApartment Property Prices Have Fallen from Record Highs\nYear-over-Year Change (Percent)\t\nIndex Value\nyears that leave borrowers little chance to build equity \nbefore the loan matures. These loans are more likely \nto be held by banks, by investor-driven lenders, or in \nCMBS. The 30-day delinquency rate for CMBS loans has \nmoved upward for three consecutive quarters, hitting \n3.8 percent in the second quarter of 2023, according to \nMBA. However, CMBS are a small share of all multifamily \nloans. Further, the most recent delinquency rate is only \nslightly higher than the pre-pandemic average. Much \nof the increase has been driven by other commercial \nproperty types, such as retail, hotels, and offices. \nLonger-term loans that have fewer near-term matur­\nities make up the largest share of multifamily loans. The \n60-day delinquency rates for loans held by Fannie Mae \nand Freddie Mac rose slightly in the second quarter \nof 2023 to 0.37 percent and 0.21 percent, respectively. \nStill, delinquencies remain low. Commercial and multi­\nfamily loans by banks and thrifts followed the same \ntrend, with a 90-day noncurrent rate of 0.67 percent \nin the second quarter of 2023, up from 0.56 percent in \nthe first quarter of 2022. While increasing, these delin­\nquency rates nonetheless remain much lower than \nthe 4 percent rate recorded in the years following the \n2008 housing market crash. \nIn the event that slowing returns do lead to a greater \nuptick in delinquencies, new opportunities may \nemerge for potential property buyers to acquire a \nbuilding at a more favorable price, in turn freeing up \ncapital that they can then invest in the apartments. \nMeanwhile, property owners facing financial distress \nmight otherwise cut back on maintenance and repair, \nto the detriment of renters.\nOwnership of Rental Properties Shifts\nDespite the slowdown in rent growth and low cap rate \nspread, rental housing remains a popular investment \noption, offering a relatively good return compared to \nother commercial real estate asset classes. Although \ninvestor activity has lessened in the short term, the \nstrong and sustained performance of multifamily \nproperties over the past two decades has attracted \nnew investors. Most rental properties are still owned \nby individuals. But the healthy track record of return \non rental investment has also encouraged the profes­\nsionalization of smaller landlords, who are increasingly \nforming limited liability partnerships (LLPs) and limited \nliability companies (LLCs). \nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n31\n\n\n--- Page 34 ---\nThe share of rental properties owned by nonindividual \ninvestors, including LLPs, LLCs, real estate corpora­\ntions, and similar entities, keeps growing. Between 2001 \nand 2021, these investors increased their ownership \nshare by 9 percentage points, to 27 percent of rental \nproperties, according to the Rental Housing Finance \nSurvey (Figure 21). \nThe growth in ownership by nonindividual investors \nhas been especially swift among small multifamily \nproperties, for which these investors have historically \nbeen absent. Between 2001 and 2021, the share of 2- \nto 4-unit multifamily properties owned by nonindi­\nvidual investors increased by 17 percentage points, to \n32 percent. During the same period, the share of 5- to \n24-unit properties owned by nonindividual investors \nnearly doubled, to 67 percent. Among large rental \nproperties, nonindividual ownership shares are signifi­\ncantly higher. Nonindividual ownership of rental prop­\nerties with at least 50 units increased by 6 percentage \npoints since 2001, to 93 percent, and by 17 percentage \npoints, to 83 percent ownership of properties with 25 \nto 49 units. \nWhile nonindividual investors are somewhat less \nactive in the single-family rental market, they have \ngained market share here, too. Over the last two \ndecades, their ownership of single-family rentals \nincreased by 8 percentage points, to 25 percent. The \nscale at which these investors operate may affect \ntheir strategies. Larger institutional investors tend to \npurchase newer and bigger single-family rentals in \nareas with fast-growing populations and rapid rent \ngrowth. By comparison, smaller institutional investors \nare more likely to purchase smaller, older, and less \nexpensive properties. \nEven as the share of single-family rental homes owned \nby nonindividual investors has grown, overall investor \nactivity in this market has recently declined. This slow­\ndown is a response to both the current interest rate \nenvironment and uncertainty about rental property \nperformance, prompting some investors to opt for \nother asset classes. Redfin data show that single-\nfamily home purchases by institutions or businesses \nfell 30 percent annually in the third quarter of 2023. This \nis the largest third quarter decline since 2016, aside \nfrom the first quarter of 2023, when activity dropped \neven more sharply. Whether the presence of inves­\ntors in the single-family rental market will continue to \ngrow depends largely on the availability of homes to \npurchase, the interest rate environment, the strength \nof other investment returns, and the steadiness of the \ndemand for rental housing.\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n32\n0\n10\n20\n30\n40\n50\n60\n70\n80\n90\n100\n1 Unit\n2-4 Units\n5-24 Units\n25-49 Units\n50 Units or More\nTotal\nNumber of Units in Property\n2001\n2021\nNote: Nonindividual investors include partnerships, trustees for estate, real estate corporations, real estate investment trusts, nonprofit \norganizations, and other entities. \nSource: JCHS tabulations of US Census Bureau, Rental Housing Finance Surveys.\nFigure 21\nNonindividual Investors Own a Growing Share of Rental Properties\nShare of Properties Owned by Nonindividual Investors (Percent)\n\n\n--- Page 35 ---\nRising operating \nand insurance costs \nwill challenge rental \nhousing providers.\nThe Outlook\nWith demand stabilizing and a large volume of new \napartments coming online, rent growth will likely \nremain slower than the frenzied pace of the early \npandemic years, helping to cool overall inflation and \nrelieve some of the pressure on household budgets. \nThe robust multifamily construction pipeline may \nfurther moderate rent growth as new units hit the \nmarket. Even so, asking rents will likely remain above \npre-pandemic levels. And the new supply will continue \nto target the high end of the market as construction \ncosts rise. As a result, the forthcoming units will do \nlittle to solve the immediate affordability needs of \nlower-income households.\nAdditionally, high interest rates present a considerable \nchallenge for the apartment industry. As the costs of \ndebt and equity rise, ensuring that deals are profitable \nhas become increasingly difficult. New construction \nand property transactions have shown signs of slowing \nas developers and buyers wait for greater economic \ncertainty and a more favorable financing environment. \nThese dynamics are likely to persist, given the expec­\ntation that interest rates will remain high for at least \nthe near term. If construction continues to slow and \nthe supply once again constricts relative to demand, \nthe affordability gains achieved at the high end of the \nrental market could be lost. \nIncreased operating and insurance costs will also \ncontinue to challenge housing providers, especially \nthose that are small scale or operate subsidized apart­\nments and smaller rental properties. In the face of \nfalling returns, housing providers may be less able to \nafford urgently needed repairs to the aging stock and \npreserve low-rent and assisted units. \nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n33\n\n\n--- Page 36 ---\nRENTAL \nAFFORDABILITY\nThe number of renters living in unaffordable housing has reached an all-time high and includes households \nacross the income spectrum and around the country. The growing shortage of units affordable to renters with \nthe lowest incomes is only worsening the affordability crisis. Though rent increases have leveled relative to \nthe pandemic spike, rents remain elevated and are straining household balance sheets. Inflation has further \nchallenged renters. Many lower-income households are struggling to cover basic needs and are confronting \ndifficult trade-offs that threaten their financial stability and overall well-being. \nCost Burdens Have Hit \nUnprecedented Heights\nCost burdens have reached record highs, fueled by \nrapidly rising rents during the pandemic. In 2022, the \nnumber of renter households spending more than \n30 percent of income on rent and utilities reached \n22.4 million, up from 20.4 million in 2019. Alarmingly, \nthe number of severely cost-burdened renter house­\nholds—those spending more than half of their income \non housing and utilities—also hit an all-time high of \n12.1 million in 2022, a full 1.5 million households above \npre-pandemic levels. \nThese recent increases stand in stark contrast to the \nmodest declines in cost burdens recorded before \nthe pandemic. Between 2014 and 2019, the number \nof cost-burdened renter households fell by about \n883,000, stemming from a substantial decrease \nin severe burdens. However, in the aftermath of the \npandemic surge, the record-high number of cost-bur­\ndened households in 2022 exceeded the 2014 pre-pan­\ndemic peak by nearly 1.1 million and marked a 7.6 million \nincrease over the low posted in 2001.\nNot only has the number of cost-burdened renters \ngrown, so has their share of the total renter popu­\nlation. In 2022, half of renter households were cost \nburdened, up 3.2 percentage points since 2019 and \n9.0 percentage points since 2001. Likewise, the share \nof severely burdened renter households rose quickly \nduring this period, from 24 percent in 2019 to 27 percent \nin 2022, 6.3 percentage points above the 2001 low. \nCost Burdens Are Climbing the \nIncome Scale\nRenter households at all income levels have expe­\nrienced rising cost-burden rates over the last two \ndecades (Figure 22). The pandemic accelerated this \ntrend. In recent years, cost-burden rates hit record \nhighs across all income groups. Middle-income renters \nhave especially felt the pain of increasing housing \ncosts. Just over two-thirds (67 percent) of house­\nholds earning $30,000 to $44,999 per year were cost \nburdened in 2022, an increase of 2.6 percentage points \nfrom 2019 and a shocking 15.1 percentage points above \n2001 levels. \n05 \nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n34\n\n\n--- Page 37 ---\n0\n10\n20\n30\n40\n50\n60\n70\n80\n90\n2001\n2019\n2022\n2001\n2019\n2022\n2001\n2019\n2022\n2001\n2019\n2022\n2001\n2019\n2022\nHousehold Income\nAll Renter Households\n$75,000 and Over\n$45,000-$74,999\n$30,000-$44,999\nUnder $30,000\nSeverely Cost Burdened\nModerately Cost Burdened\nNotes: Household incomes are adjusted for inflation using the CPI-U for All Items. Moderately (severely) cost-burdened households \nspend 30–50% (more than 50%) of income on rent and utilities. Households with zero or negative income are assumed to have severe \nburdens, while households that are not required to pay rent are assumed to be unburdened. \nSource: JCHS tabulations of US Census Bureau, American Community Survey 1-Year Estimates.\nFigure 22\nCost Burdens Continued to Increase Across Incomes During the Pandemic\nShare of Renter Households (Percent)\nRenter households with annual incomes of $45,000 \nto $74,999 have seen the fastest growth in their \nburden rates, both over the longer term and during \nthe pandemic. Indeed, 41 percent of renter households \nin this income category were burdened in 2022, a \n5.4 percentage point increase since the start of the \npandemic, nearly doubling their 2001 rate. \nEven many renter households earning at least $75,000 \nannually have felt increased financial strain. Cost-\nburden rates for this income bracket have risen 2.2 \npercentage points since the start of the pandemic and \n6.4 percentage points over the longer two-decade \nsweep. Still, cost-burden rates for this group remain \nrelatively low at just 11 percent. \nMost concerning is the rapid increase in cost burdens \namong lower-income renter households, a group that \nalready had a high burden rate. The share of cost-bur­\ndened renter households earning less than $30,000 \nannually rose 1.5 percentage points from 2019 to 2022. \nWhile this increase is notable for any group, these \nrenters have consistently grappled with widespread \nand persistent housing hardships. From 2001 to 2019, \nthe cost-burden rate among renter households with \nlower incomes hovered between 77 and 82 percent. \nIn 2022, 83 percent of these households were cost \nburdened, with the majority (65 percent) experiencing \nsevere burdens, marking yet another all-time high. The \nnew rental stock is unlikely to bring immediate relief \nto these households because the bulk of these units \ncharges high rents. \nDisparities in Cost Burdens Persist\nWhile overall cost-burden rates are high, some demo­\ngraphic groups experience higher rates than others. \nLong-standing discrimination in housing, employment, \nand education has contributed to disproportionately \nhigh cost-burden rates for renter households headed \nby a Black, Hispanic, or multiracial person. In 2022, \nmore than half of Black (57 percent), Hispanic (54 \npercent), and multiracial (50 percent) households \nwere cost burdened, while rates were lower for white \n(45 percent), Asian (44 percent), and Native American \n(44 percent) households. \nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n35\n\n\n--- Page 38 ---\nEven accounting for income, households headed \nby a white person were more likely to find afford­\nable housing than those headed by most people of \ncolor. Among households with annual incomes under \n$30,000, cost-burden rates are highest for those \nheaded by a Hispanic (87 percent), Asian (86 percent), \nBlack (85 percent), or multiracial (84 percent) person, \nas compared to their white counterparts (80 percent). \nOnly lower-income households headed by a Native \nAmerican person fared better than white renter house­\nholds, with a cost-burden rate of 72 percent, though \nthese households face other housing challenges, \nincluding inadequate conditions and overcrowding.\nCost burdens also vary by age and are most common \namong the youngest and oldest renters, many of \nwhom have lower incomes than individuals in their \nprime earning years. In 2022, a stunning 61 percent \nof renter households headed by someone under age \n25 were cost burdened, including 37 percent with \nsevere burdens. Unsurprisingly, the cost-burden rate \ndropped substantially for renter households in their \nprime earning years, to about 45 percent for those \nheaded by someone aged 25–54. Still, even among \nthis subset, nearly a quarter are severely burdened. \nThe rate then begins to rise again, increasing slightly \nto 49 percent for households headed by someone \naged 55–64, including 28 percent with severe burdens, \nand continues upward. Fully 57 percent of renter \nhouseholds headed by someone age 65 and over \nwere cost burdened, with 34 percent experiencing \nsevere burdens. \nAcross all age groups, cost-burden rates are higher \namong renters with disabilities, as workplace chal­\nlenges can limit employment options and earnings. \nIn fact, 60 percent of renter households headed by \nsomeone with a disability were cost burdened in 2022, \na whopping 13 percentage points higher than their \ncounterparts who did not have a disability. The finan­\ncial burden is especially significant for young adult \nrenters with disabilities. Among those under age 25, \ntwo-thirds were cost burdened.\nEven many fully employed households struggle \nwith housing costs. Just over a third—8.0 million—of \nthe renter households headed by a full-time, year-\nround worker were cost burdened in 2022 (Figure 23). \n0\n10\n20\n30\n40\n50\n60\nPersonal\nCare\nFood\nPreparation\nHealthcare\nSupport\nSales\nConstruction\nEducation\nSocial\nService\nHealthcare\nPractitioner\nBusiness\nAll\nOccupations\nOccupation Types\nNotes: Fully employed householders reported working at least 35 hours per week for at least 50 weeks of the previous year. All \noccupations includes households in occupations not shown. Cost-burdened households spend more than 30% of income on rent and \nutilities. Households with zero or negative income are assumed to be burdened, while households that are not required to pay rent are \nassumed to be unburdened.\nSource: JCHS tabulations of US Census Bureau, 2022 American Community Survey 1-Year Estimates.\nFigure 23\nFully Employed Renters in a Range of Occupations Are Cost Burdened\nShare of Fully Employed Renters with Cost Burdens (Percent)\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n36\n\n\n--- Page 39 ---\nRenters working in personal care (including child­\ncare workers, fitness trainers, and hairstylists) or in \nfood preparation occupations were especially likely \nto spend an outsize portion of their income on rent. \nMore than half of renter householders working full time \nin these occupations were cost burdened, including \nabout a quarter who were severely burdened. \nOf course, occupations and earnings are related to \neducation, a dynamic reflected in cost-burden rates \nas well. In 2022, the burden share among renter house­\nholds headed by someone with at least a college \ndegree was 39 percent—more than 19 percentage \npoints lower than the 59 percent of cost-burdened \nhouseholds headed by someone who lacked either a \nhigh school diploma or a GED.\nDifferences in cost-burden rates are also influenced by \nboth the number of potential earners in a household \nand the amount of space the household requires. With \njust one earner and the need for more bedrooms to \naccommodate children, single-parent renter house­\nholds had the highest cost-burden rate in 2022 at 62 \npercent. Because so many renter households consist \nof just one individual, single-person households \naccounted for nearly half of all cost-burdened renters. \nDespite the need for less space, 58 percent of single-\nperson households were cost burdened. Meanwhile, \na third of renters who were married without kids were \nburdened by housing costs, making this household \ntype most likely to live in affordable housing.\nAffordability Is Worsening Across \nthe Country\nGiven the enormous number of renters struggling to \nafford housing, it is perhaps unsurprising that cost-\nburden rates are high across the country (Figure 24). \nIn some places, this is due to high rents. In others, \nit is a function of low incomes. For example, in the \nMidwest and the South, where median rents are \nlowest, cost-burden rates are still 46 percent and 50 \npercent, respectively, because median incomes are \nalso lower. Though renters in the Northeast and West \nhave higher median incomes, the cost-burden rates \nin these regions are similarly elevated at 50 and 52 \npercent because of high housing costs.\nShare of Renters with \nCost Burdens (Percent)\n37.0–39.9\n40.0-44.9\n45.0-49.9\n50.0–57.9\nNotes: Cost-burdened households spend \nmore than 30% of income on rent and \nutilities. Households with zero or negative \nincome are assumed to be burdened, while \nhouseholds that are not required to pay rent \nare assumed to be unburdened. \nSource: JCHS tabulations of US Census \nBureau, 2022 American Community Survey \n1-Year Estimates.\nFigure 24\nMore Than a Third of Renters Are Cost Burdened in Every State in the Country\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n37\n\n\n--- Page 40 ---\nThese same patterns emerge when cost burdens \nare examined by state. For instance, the cost-burden \nrate was 51 percent in both Louisiana and New Jersey \nin 2022, despite the states’ vastly different median \nincomes and rents. Florida, Hawaii, and Nevada \ntopped the list of the most unaffordable states, with \ncost-burden rates exceeding 55 percent. But, notably, \neven in the most affordable states, more than a third \nof renter households were cost burdened, and afford­\nability has worsened in all but seven states since the \nstart of the pandemic. \nThough renters are cost burdened in all types of \ncommunities across the country, shares are highest \nin the largest metros, where rents tend to be higher. \nMore than half (51 percent) of renter households living \nin the 56 metros with populations over 1 million were \nburdened by housing costs in 2022, with the highest \nrates in Miami, Honolulu, and Orlando. Since 2019, cost-\nburden rates in large metros have risen 3.5 percentage \npoints, increasing in all but one of the 56 large metros. \nConversely, places with smaller populations are rela­\ntively more affordable. Just under half of renters (49 \npercent) in midsize metros with populations between a \nquarter million and 1 million were cost burdened in 2022. \nIn these geographies, cost-burden rates increased by \n2.9 percentage points since the start of the pandemic. \nThe cost-burden share was slightly lower (45 percent) \nin small metros with populations under 250,000, where \nrates have risen by 2.6 percentage points during the \nsame period. Rural areas were the most affordable, \nwith 40 percent of renter households experiencing \ncost burdens, a 1.7 percentage point increase over \npre-pandemic levels. \nAlarmingly, most lower-income renter households \nstruggle to find housing they can afford in any commu­\nnity. Renters with the lowest incomes—those in the \nbottom fifth of the income distribution for a given \nmetropolitan area or for a state’s rural areas—expe­\nrience high cost-burden rates even in less expen­\nsive areas. In rural communities where cost-burden \nrates were lowest, 72 percent of these households \nwere burdened, with nearly half experiencing severe \nburdens. The share of lowest-income renters strug­\ngling with cost burdens increased with population size, \nreaching 86 percent in large metros. \nAffordable Supply Is Scarce\nA significant driver of the record-high cost-burden \nlevels is the large and increasing dearth of rental units \naffordable to households with the lowest incomes. \nAccording to HUD’s Worst Case Housing Needs: 2023 \nReport to Congress, there are 61 affordable units for \nevery 100 renter households that earn no more than \n30 percent of area median income. Of these units, \n40 percent were occupied by a household with an \nannual income above 30 percent of the area median, \nreducing the number of units available and afford­\nable to the most financially vulnerable to just 36 per \n100 households. \nNationally, the severe shortage of units both afford­\nable and available to households with extremely low \nincomes has only worsened over the last two decades. \nFrom 2001 to 2021, the number of extremely low-in­\ncome households increased by 3.6 million. Yet the \nrelevant supply rose by just 677,000 units during the \nsame period. As a result, the total shortfall in units \naffordable and available to these households rose \nfrom 4.9 million in 2001 to a record-high 7.8 million units \nby 2021. The pandemic further accelerated unit losses \nas the number of extremely low-income households \nclimbed, raising the total deficit by 823,000 units in \njust two years.\nThe affordable supply shortage is largest in central \ncities and high-density suburbs. In 2021, just 35 units \nin central cities and 30 units in high-density suburbs \nwere affordable and available for every 100 renters \nwith extremely low incomes. Low-density suburbs \nwere only slightly more affordable, with 43 units per 100 \nextremely low-income renter households. In contrast, \nrural communities had 54 units available for every \n100 renter households with extremely low incomes. \nHowever, the larger supply of affordable and avail­\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n38\n\n\n--- Page 41 ---\nable units in rural areas is offset somewhat by higher \nrates of physical inadequacy among rural rental units. \nExcluding inadequate housing, only 44 rentals were \naffordable and available for every 100 rural renters \nwith extremely low incomes.\nRising Housing Costs Are Consuming \nHousehold Incomes\nOver the last two decades, housing cost increases \nhave outpaced income gains for renters, straining \nhousehold balance sheets. Though median rents \nhave risen 21 percent in inflation-adjusted terms since \n2001, median annual income has risen just 2 percent \nduring the same period. Consequently, renters’ median \nresidual income—the amount of money available each \nmonth after paying for rent and utilities—was $2,600 \nin 2022, down 4 percent from 2001.\nRenters with lower incomes have been particularly \nhard-hit by rising housing costs. Residual incomes for \nthose making less than $30,000 dropped to an all-time \nlow of $310 per month in 2022, 47 percent below the \n2001 peak (Figure 25). Among these lower-income \nrenters, those with cost burdens fared even worse, with \na median residual income of just $170. \nThe high cost of rent has also diminished spending \npower for renters making $30,000 to $74,999 annually. \nSuch households had a median residual income of \n$2,700 each month, down 10 percent over two decades. \nIn contrast, residual incomes increased slightly for \nrenters earning at least $75,000 per year, consistent \nwith the nation’s widening income inequality. For these \nhouseholds, the monthly residual income in 2022 was \n$7,500, about a half percent above 2001 levels.\nWhile many higher-income households have been \nable to afford a comfortable standard of living, a large \nshare of renters have not. According to the Economic \nPolicy Institute, a single-person household in the \nnation’s most affordable counties would still need \nabout $2,000 each month in residual income to cover \n-50\n-40\n-30\n-20\n-10\n0\n10\n2001\n2004\n2007\n2010\n2013\n2016\n2019\n2022\nHousehold Income\n$30,000-$74,999\n$75,000 and Over\nUnder $30,000\nNotes: Household incomes and residual incomes are adjusted \nfor inflation using the CPI-U for All Items. Households that are \nnot required to pay rent are excluded. Data for 2020 are based \non 2019 and 2021 values because of pandemic data disruptions. \nSource: JCHS tabulations of US Census Bureau, American \nCommunity Survey 1-Year Estimates.\nFigure 25\nAfter Paying for Housing, Lower-Income Renters \nHave Less Money Left Over Than Ever Before\nChange in Residual Income Since 2001 (Percent)\nall other needs, an amount that far exceeds what most \nrenters have available after paying for rent and utilities. \nIndeed, 42 percent of renters have less than $2,000 in \nresidual income and, in many cases, much less. \nRapid inflation of both rents and consumer goods and \nservices over the last two years has further stretched \nhousehold budgets. According to the Household Pulse \nSurveys from June to October 2023, 63 percent of renter \nhouseholds reported their rents rose in the past year, \nwith 15 percent reporting increases of at least $250. \nThe vast majority of surveyed households also noticed \nprice increases for other goods in their communities \nin the preceding two months. \nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n39\n\n\n--- Page 42 ---\nThese price increases have been especially hard \non lower-income renters. About two-thirds of renter \nhouseholds earning less than $25,000 reported feeling \nstressed by rent hikes and inflation (Figure 26). Like­\nwise, just over 60 percent of Hispanic and Black house­\nholds were very stressed by inflation, compared to 54 \npercent of white and 41 percent of Asian households. \nAnd having children further compounded the financial \nstrain, with 67 percent of renters with children feeling \nstressed by price increases as compared to 51 percent \nof households without children.\nAgainst this backdrop, many of the most financially \nvulnerable renters have reduced their spending in \nareas critical to well-being. Rent is the largest expense \nfor most households and often takes priority because \nthe consequences of not paying rent could include \neviction and homelessness. Center tabulations of the \nConsumer Expenditure Survey indicate that severely \ncost-burdened renter households in the lowest expen­\nditure quartile (a proxy for low incomes) spent 39 \npercent less on food and 42 percent less on healthcare \nthan their unburdened counterparts in 2022.\n0\n10\n20\n30\n40\n50\n60\n70\nAsian\nWhite\nBlack\nHispanic\n$75,000 and Over\n$50,000-$74,999\n$35,000-$49,999\n$25,000-$34,999\nUnder $25,000\nRace/\nEthnicity\nHousehold\nIncome\nNotes: Black, Asian, and white respondents are non-Hispanic. Hispanic individuals may be of any race. People identifying as another \nrace (including Native American) or multiple races are not shown owing to data limitations. The survey asked, “How stressful, if at all, has \nthe increase in prices in the last two months been for you?” \nSource: JCHS tabulations of US Census Bureau, Household Pulse Surveys, June–October 2023.\nFigure 26\nLower-Income, Hispanic, and Black Renter Households Have Been Hardest Hit by Inflation\nShare of Renter Households Very Stressed by Price Increases (Percent)\nMore recently, the Census Bureau’s Household Pulse \nSurvey illustrates that such trade-offs continued into \n2023, particularly for lower-income households and \nthose that have fallen behind on rent. While almost \ntwo-thirds of renter households making less than \n$25,000 reported difficulty paying for their usual \nexpenses, the share rose to 82 percent for households \nin this income bracket who were behind on rent.\nRenters may make other trade-offs, too. For example, \nin an effort to reduce housing costs, a household might \nrelocate to an older or substandard unit. Such units \ntend to have lower rents, but they are also more likely \nto present significant risks to tenant health and safety. \nRenters may also reduce housing costs by opting for \novercrowded living arrangements, longer commutes, \nor neighborhoods that are less safe, have fewer \namenities, or are in lower-performing school districts. \nThese and other such choices may further threaten an \nalready vulnerable household’s well-being, financial \nstability, and economic mobility.\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n40\n\n\n--- Page 43 ---\nThe Outlook\nThe pandemic propelled the housing affordability \ncrisis to new heights, making it an urgent priority for \ncommunities across the nation. While the influx of new \nsupply at the high end of the market will provide some \nrelief for the rising ranks of cost-burdened renters in \nthe middle and higher income brackets, little respite is \nlikely for those with lower incomes. Construction costs \nand market dynamics make it difficult to build new \nunits at lower and moderate rent levels, increasing \nthe need to preserve and repair the existing stock of \naffordable rental housing. \nHouseholds with lower incomes especially will continue \nto struggle to find affordable homes anywhere in the \ncountry, let alone in neighborhoods with high-quality \namenities and services. Absent increased afford­\nable housing production and subsidies or additional \nincome supports, more renters—especially those with \nlower incomes—will strain to make ends meet, as so \nmany already are. \nRecord-high cost \nburdens are forcing \ntrade-offs for lower-\nincome renters.\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n41\n\n\n--- Page 44 ---\nRENTAL HOUSING \nCHALLENGES\nFederal subsidies fail to meet the large and growing need for affordable housing, and rental assistance programs \nface ongoing challenges. To mitigate the shortfall, some state and local governments have sought to remove \nzoning and regulatory barriers to affordable and multifamily construction. Nevertheless, an increasing number \nof renters are at risk of eviction, and homelessness has hit an all-time high. Climate change–related hazards \nand energy price hikes are creating further precarity for renter households and property owners.\n \nRental Subsidies Fall Short\nRental assistance is a crucial housing support for \nroughly 5 million households that earn no more than \n50 percent of their area median income. The majority \nof those obtaining assistance through Department of \nHousing and Urban Development (HUD) programs are \nolder adults, people with disabilities, and families with \nchildren. Unfortunately, rental assistance programs \nhave not expanded to meet the growing demand. \nInstead, federal funding for housing assistance has \nincreased only modestly and incrementally since the \nmid-1990s, aside from significant one-off appropria­\ntions during the Great Recession and the pandemic. \nBetween 2001 and 2021, the number of renter house­\nholds receiving support increased by just 910,000, \neven as the number of renter households with very \nlow incomes grew by 4.4 million to 19.3 million. Conse­\nquently, the number of income-eligible households \nthat do not receive assistance jumped from 10.7 million \nin 2001 to 14.2 million in 2021, leaving three out of every \nfour eligible households unassisted. \nSimultaneously, cost-burden rates have increased \nfor income-eligible unassisted renter households. As \nrents have risen faster than incomes, the share of these \nhouseholds with severe cost burdens, substandard \nhousing, or both jumped from 47 percent in 2001 to \n60 percent in 2021. This reflects a rise in worst case \nhousing needs from 5.0 million to a record-high 8.5 \nmillion households over two decades. \nSubsidized Stock Requires \nSubstantial Investments\nThough all of the nation’s rental assistance programs \nfall far short of the need, public housing in particular is \nseverely underfunded. Decades of insufficient capital \nand operating funds have left a massive maintenance \nbacklog estimated at $90 billion. The stock’s generally \npoor condition has motivated many public housing \nauthorities to demolish or transition units to other \nfunding streams. As a result, the number of occupied \npublic housing units has declined. In 2022, 835,000 \nhouseholds lived in public housing, down from a peak \nof 1.4 million in 1994 (Figure 27).\nThe Rental Assistance Demonstration (RAD) program, \nwhich converts public housing units to longer-term, \nstable Section 8 contracts, allows housing providers \nto secure other sources of financing to under­\ntake needed maintenance and redevelopment. \n06\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n42\n\n\n--- Page 45 ---\n0.0\n0.5\n1.0\n1.5\n2.0\n2.5\n3.0\n1990\n1994\n1998\n2002\n2006\n2010\n2014\n2018\n2022\nPublic Housing\nHousing Choice Vouchers\nProject-Based Section 8\nLIHTC\nNotes: LIHTC occupancy is based on the 98.6% rate reported by \nNovogradac in 2021. LIHTC units include low-income units only. \nSources: JCHS tabulations of HUD, Picture of Subsidized \nHouseholds and Low-Income Housing Tax Credit Database; \nRobert Collinson, Ingrid Gould Ellen, and Jens Ludwig, Low-Income \nHousing Policy, NBER Working Paper, 2015.\nFigure 27\nLIHTC and Vouchers Have Become the Largest \nRental Assistance Programs\nOccupied Units (Millions)\nUnder RAD, 226,000 units have converted to Section 8 \nunits to date, boosting the number of project-based \nSection 8 households to 1.2 million in 2022. \nA recent extension of RAD offers public housing author­\nities the first real opportunity to develop new public \nhousing units since the Faircloth Amendment capped \nthe public housing stock at 1999 levels. With the demo­\nlition of hundreds of thousands of units since then, \nmany places operate below their allowable maximum \nbut do not have the capital to support new units. Fair­\ncloth-to-RAD helps address this financing hurdle, \nproviding housing authorities with the opportunity to \nadd nearly 220,000 units back to the stock through \nHUD’s mixed-finance program, with the knowledge \nthat the units will convert to longer Section 8 contracts.\nFaircloth-to-RAD holds promise for expanding the \nsubsidized stock. Still, most new construction, rehabili­\ntation, and acquisition projects are currently financed \nthrough the Low-Income Housing Tax Credit (LIHTC) \nprogram. Since the program’s creation in 1986, LIHTC \nhas supported the development and preservation of \nmore than 3.6 million low-income units. While LIHTC \nis an important source of quality affordable housing \nin many communities, developers are permitted to \nflip these units to market rate after the conclusion \nof the affordability period, typically at least 30 years. \nMore than 325,000 units are set to expire between \n2024 and 2029 alone. Additionally, at least 7,000 units \nare prematurely lost each year through the qualified \ncontracts process, which permits property owners to \nopt out of the program after 15 years. \nFurther, LIHTC does not necessarily protect a renter \nfrom cost burdens. Because rents are capped based \non the income designation of the unit, tenants who \nmake less than that maximum may find themselves \nin an unaffordable unit. For some renters with lower \nincomes, Housing Choice Vouchers can help make \nup a portion of the difference. \nHousing Choice Vouchers have been the dominant \nHUD subsidy for the last 25 years, assisting 2.3 million \nrenter households in 2022. However, voucher holders \nmay struggle to secure a unit priced within their area’s \nfair market rent. Vouchers also do not guarantee an \naffordable apartment. Indeed, 26 percent of voucher \nrecipients were cost burdened despite receiving assis­\ntance. This is likely because renters can select housing \nthat costs more than the program limit as long as they \npay for the difference out of pocket. \nMoreover, Housing Choice Vouchers rely on the private \nmarket and landlord participation. Yet many property \nowners find the program’s inspections and require­\nments too burdensome to merit their involvement. \nGiven these challenges, about 40 percent of voucher \nholders are unable to secure an appropriate unit in \nthe allotted time. To address these obstacles, HUD \nannounced in 2023 that the agency will pilot a direct-\nto-tenant assistance program.\nThough HUD programs serve rural areas, multifamily \nsubsidies from the US Department of Agriculture \n(USDA) play an important role in these communities. \nUSDA’s Section 515 Rural Rental Housing program offers \nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n43\n\n\n--- Page 46 ---\nlow-interest mortgages for multifamily housing and \nrequires that rents in these units remain affordable \nover the 30-year loan period. Currently, Section 515 \nserves 378,000 renter households in rural areas with \nlimited rental supply. However, this stock is dwindling. \nThe program has not financed new housing in recent \nyears, and most of the existing loans are nearing matu­\nrity. Loan prepayments also threaten the stock. Nearly \n22,000 units exited the program between 2016 and 2021, \naccording to the Housing Assistance Council.\nState and Local Governments Step \nUp Efforts\nLimited federal rental assistance has prompted many \nstate and local governments to find solutions to the \naffordability crisis. Increasingly, states and localities \nrely on multifamily housing bonds to finance afford­\nable housing, often pairing tax-exempt bond revenue \nwith LIHTC financing. Multifamily private activity bond \nissuances rose from $2.4 billion in 2010 to a record $17.2 \nbillion in 2020 (Figure 28). On a smaller scale, more \nthan 800 state and local housing trust funds generated \nalmost $3 billion annually to fund affordable housing.\nIn addition to raising their own revenues, state and local \ngovernments manage federal resources for affordable \nhousing. Since 2016, the National Housing Trust Fund \nhas provided states with flexible funding ranging from \n$173 million to nearly $740 million annually. American \nRescue Plan state and local fiscal recovery funds have \nalso been a recent boon to affordable housing efforts. \nState and local governments budgeted $17.7 billion of \nthese funds through June 2023 to support about 2,800 \naffordable housing projects and programs nationwide. \nSome cities are finding ways to take units out of the \nprivate market for longer-term affordability, including \nshared and public ownership models. According to \na 2022 survey by the Grounded Solutions Network, \ncommunity land trusts hold nearly 20,000 rental \nunits nationwide. Growing momentum for publicly or \ncommunity-owned permanently affordable housing \nhas also spurred calls for social housing plans in Cali­\nfornia and Rhode Island, as well as in New York City, \nLos Angeles, San Francisco, Kansas City, Seattle, and \nWashington, DC. \nAt the same time, a growing tenant movement has \nprompted rent regulation legislation. In 2019, Oregon \npassed the first statewide rent stabilization bill, limiting \nannual rent increases to 7 percent plus inflation. Cali­\nfornia enacted similar legislation shortly thereafter. At \nthe local level, Saint Paul recently implemented rent \nstabilization measures. \nHowever, other state and local legislative efforts to limit \nrent increases have failed, in part because striking a \nbalance between the priorities of renters and property \nowners proved difficult. While renters seek protection \nfrom rapid rent hikes, landlords are concerned about \nlimits on rent increases that can make it more difficult \nto cover growing expenses. There is also the risk that \ndevelopers may steer clear of jurisdictions with rent \ncontrol, creating longer-term supply challenges.\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n44\n0\n2\n4\n6\n8\n10\n12\n14\n16\n18\n2005\n2007\n2009\n2011\n2013\n2015\n2017\n2019\nNote: Multifamily private activity bonds are issued by state and  \nlocal authorities.\nSource: Council of Development Finance Agencies.\nFigure 28\nMultifamily Bond Issuances Jumped in the  \nLast Decade\nMultifamily Bond Issuances (Billions of Dollars)\n\n\n--- Page 47 ---\nBarriers to New Construction \nAre Falling\nReducing the barriers to multifamily housing construc­\ntion can improve affordability and increase rental \noptions. Nationwide, an estimated 75 percent of land \nin major cities is zoned exclusively for single-family \nhomes. By limiting diverse housing types, commu­\nnities effectively exclude renters. Amending zoning \nlaws does not guarantee that new units will be built \nor will be affordable to renters with lower incomes, but \nit removes a significant barrier to such possibilities.\nSuch zoning reforms are gaining popularity, with recent \nefforts at all levels of government. The 2023 federal \nomnibus spending bill included $85 million for new “Yes \nIn My Back Yard” grants to encourage state and local \ngovernments to identify and address exclusionary \nzoning and land use policies. The program follows \nWashington’s model of incentivizing communities to \ncarefully examine restrictive zoning. There, the initiative \nsupported several cities in changing their land use \npolicies to allow duplexes, triplexes, and accessory \ndwelling units in formerly single-family districts.\nAlso, a growing list of states are preempting local \nsingle-family zoning laws to compel more neighbor­\nhoods to allow a range of housing options. In 2023 \nalone, Montana, Vermont, and Washington passed \nlegislation requiring local communities to loosen \nzoning laws to allow modest-sized multifamily build­\nings. These changes came on the heels of sweeping \nzoning reforms in California, Maine, and Oregon that \nsimilarly opened single-family-only zones to different \ntypes of housing. And in Massachusetts, recent legis­\nlation mandated that the 177 jurisdictions served by \npublic transit must designate at least one zone to allow \nmultifamily buildings and higher densities without \nspecial approvals.\nAt the local level, cities are also eyeing zoning reforms \nto enable more supply and improve affordability over \nthe longer term. In 2020, Cambridge, Massachu­\nsetts, adopted an innovative 100 percent affordable \nhousing overlay, allowing affordable development \nAbout 75 percent of \nland in major cities is \nzoned exclusively for \nsingle-family homes.\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n45\n\n\n--- Page 48 ---\nprojects by right and at greater heights and densities. \nCambridge is also among the cities—including Ann \nArbor and Cincinnati—that recently removed some or \nall parking requirements in an effort to reduce the cost \nof construction and, in turn, rents in new developments. \nEvictions Have Returned to \nPre-Pandemic Levels\nThe protections and supports that kept households in \ntheir homes through the first years of the pandemic \neither have ended or are nearing depletion. Emergency \nRental Assistance (ERA) and federal, state, and local \neviction moratoriums—as well as property owners \nwho gave renters additional leniency—helped keep \nvulnerable renters housed, reducing eviction cases \nby an estimated 58 percent through the end of 2021, \naccording to the Eviction Lab. \nERA has been a particularly critical program, making \nmore than 10.8 million payments to renters at risk of \neviction and, in doing so, making their landlords whole. \nWhile some ERA funds have spending timelines that \nextend through 2025, most of the money has already \nbeen disbursed. As of mid-October 2023, about $6.5 \nbillion remained of the $46.55 billion in authorized \nassistance, and programs in most states were closed. \nYet renters continue to face financial stressors. In the \nmiddle of 2023, 12 percent of all renter households were \nbehind on rent despite low unemployment and the \nbroader economic recovery, with even higher rates \nfor lower-income households (18 percent) and those \nheaded by a Black person (21 percent) or an Asian \nperson (17 percent). With significant shares of renters \nstill at risk as ERA and other critical protections wind \ndown, eviction filings approached pre-pandemic levels \nat the end of 2022 and remained elevated through the \nfirst half of 2023 (Figure 29). \nStill, some renters are benefitting from ongoing efforts \nto keep tenants housed. At the federal level, HUD’s \nEviction Protection Grant Program has offered funding \nto a limited number of governments and nonprofits \nthat provide or connect renters with legal services. \nStates and localities are also working to pass right-to-\ncounsel legislation for renters facing eviction. Jurisdic­\ntions in 17 states had some form of right to counsel as \nof mid-2023, with 3 states and 12 local governments \nenacting such programs since 2021. State, county, and \nlocal governments are also continuing their emer­\ngency rental assistance programs, with about half \nof ERA administrators surveyed by the National Low \nIncome Housing Coalition reporting that they plan to \nkeep running these programs beyond the end of the \nUS Department of the Treasury’s ERA funds. \n0\n20\n40\n60\n80\n100\n120\n2021\n2022\n2023\n2020\nNotes: Data include eviction filings in the 10 states and 18 cities \nthat had complete data through the end of June 2023. Rates are \nrelative to a pre-pandemic average baseline.\nSource: JCHS tabulations of Eviction Lab, Eviction Tracking System.\nFigure 29\nEviction Filings Returned to Pre-Pandemic Levels \nAfter Relief Measures Expired\nEviction Filings Relative to Pre-Pandemic Average (Percent)\nHomelessness Reaches an \nAll-Time High\nAs evictions and housing costs have risen, so has \nhomelessness. In 2023, a record-setting 653,100 \npeople in the US were unhoused on a given night in \nJanuary. During the early years of the pandemic, evic­\ntion prevention efforts, emergency rental assistance \nprograms, and temporary income supports minimized \nthe rise in homelessness. However, many of these \nprotections ended in 2022 as rents rose rapidly and \nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n46\n\n\n--- Page 49 ---\namid an influx of migrants prohibited from working. \nConsequently, the number of unhoused people rose \nby nearly 71,000 in just one year.\nThe most recent increase reflects a significant growth \nin both sheltered and unsheltered homelessness. \nBetween January 2022 and 2023, the number of people \nstaying in shelters rose by 47,860 to 396,490. Mean­\nwhile, an increase of 22,780 people staying in places \nnot intended for human habitation drove the popu­\nlation experiencing unsheltered homelessness to an \nall-time high of 256,610. \nRising unsheltered homelessness continues a longer-\nterm trend. Since 2015, this population has grown \nnationally by more than 83,000 people (48 percent). \nWhile states across the country have seen their unshel­\ntered populations increase, the growth has been \nhighest in the West, where housing costs have risen \nrapidly and shelter resources were already strained. \nIn California alone, 123,420 people are experiencing \nunsheltered homelessness, amounting to 48 percent \nof the national unsheltered population. Even states \ntraditionally considered more affordable, like Arizona, \nOhio, Tennessee, and Texas, have experienced rising \nunsheltered homelessness since 2015 (Figure 30).\nSeveral populations are vulnerable to homeless­\nness. Widespread discrimination against Black and \nHispanic people creates inequities in household \nfinances, housing opportunities, and evictions. As a \nresult, Black people are 37 percent of all unhoused \npeople but just 13 percent of the US population, while \nHispanic people are more than a quarter (28 percent) \nof people experiencing homelessness but less than \n20 percent of the population. In addition to discrimi­\nnation, Native Americans and Indigenous people face \nunique housing challenges that also leave a dispro­\nportionate share homeless. \nDecrease (Up to 1,535)\n1–500 Increase\n501–1,000 Increase\n1,001–50,000 Increase\nChange in Unsheltered Homelessness,\n2015–2023 (People)\nSource: JCHS tabulations of US \nDepartment of Housing and \nUrban Development, Annual \nHomeless Assessment Report \nPoint-in-Time Estimates.\nFigure 30 \nUnsheltered Homelessness Has Risen in Most States\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n47\n\n\n--- Page 50 ---\nIn response to the increase in homelessness, the \ncurrent administration has offered federal agencies \nadditional in resources. Through its Continuum of Care \nprogram, HUD made available a record-setting $3.1 \nbillion in competitive grants in 2023 for homelessness \nresponse efforts. The 2021 American Rescue Plan Act \nalso included $5 billion for homelessness services, \nshelters, and housing through the HOME-ARP program \nand 70,000 Emergency Housing Vouchers for people \nexperiencing or at risk of homelessness. Still, a much \ngreater investment by the federal government in \naffordable housing and rental assistance is imper­\native to prevent further increases in homelessness, \nrehouse people at scale, and reduce the costs of \nhomelessness responses.\nState and local governments have filled some gaps \nby using flexible pandemic funding to serve unhoused \npeople. More than $3.8 billion of state and local fiscal \nrecovery monies have been earmarked for home­\nlessness services and housing. However, some states, \nincluding Missouri and Tennessee, are responding \nto heightened homelessness by passing laws that \nrestrict encampments or criminalize sleeping on \npublic property. Such policies are harmful to people \nexperiencing homelessness, divert resources from \nsupporting unhoused people, and do not address \nthe underlying housing affordability issues that push \npeople into homelessness.\nRental Stock Urgently Requires \nEnergy Upgrades\nExtreme weather variability and rising temperatures \ncaused by climate change are expected to increase \nhome energy demand and, in turn, renters’ housing \ncosts. About half of renters making less than $30,000 \n(8.4 million households) experienced energy insecu­\nrity in 2020 (Figure 31). The Low Income Home Energy \nAssistance Program offset costs for more than 6 million \nrenter and homeowner households in 2022 but none­\ntheless was unable to fully address the need.\nEnergy-Insecure Households\nShare Facing Energy Insecurity (Right Scale)\n0\n10\n20\n30\n40\n50\n60\n0\n1\n2\n3\n4\n5\n6\nUnder\n$15,000\n$15,000-\n$29,999\n$30,000-\n$44,999\n$45,000-\n$74,999\n$75,000\nand Over\nNote: Households that are energy insecure have forgone basic \nnecessities, maintained an unhealthy temperature inside their \nhome, or received a disconnection notice.\nSource: US Energy Information Administration, 2020 Residential \nEnergy Consumption Survey.\nFigure 31\nMillions of Renters Are Energy Insecure\nRenter Households \n(Millions)\nShare Facing Energy \nInsecurity (Percent)\nDespite improvements in construction techniques and \nretrofits, the rental housing stock still has efficiency \nand electrification needs. While renters use less energy \nthan homeowners on a per household basis, rentals \naccount for greater energy use per square foot than \nowner-occupied homes, according to the Residential \nEnergy Consumption Survey. Older rental homes, in \nparticular, use more energy than newer homes and \nhave considerable efficiency, renewable energy instal­\nlation, and electrification needs. \nNew federal resources will help address the need for \nenergy efficiency by providing funding to encourage \ntenants and property owners to make select improve­\nments. The Weatherization Assistance Program, for \nexample, received a one-time $3.5 billion infusion \nthrough the Infrastructure Investment and Jobs Act \nto help homeowners—and likely a modest number \nof renter households—fund approved upgrades. The \nInflation Reduction Act also granted renters and rental \nproperty owners $8.8 billion in household rebates and \nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n48\n\n\n--- Page 51 ---\ntax credits, expanded home energy tax credits, and \nprovided an additional $1 billion for energy and water \nefficiency improvements in HUD-assisted housing. \nSimilarly, states are making financial resources avail­\nable for multifamily retrofits. The new Massachusetts \nCommunity Climate Bank, the nation’s first “green \nbank” focused exclusively on affordable housing, will \nlend an initial $50 million in state funds to leverage \nadditional federal and private resources and promote \nefficiency improvements. And in response to a deadly \nheat wave in 2021, Oregon created a $15 million grant \nand rebate program for landlords who install heat \npumps as energy-efficient alternatives to air condi­\ntioners and furnaces. \nClimate Change Threatens Renters \nand Their Homes\nImproving the rental stock’s climate resiliency is \nanother urgent priority. The frequency and severity of \nhazards related to climate change leave an increasing \nnumber of renter households at risk of hurricanes, \nwildfires, floods, and other extreme climate-related \nevents. Disasters also carry longer-term risks to renters. \nBoth evictions and rents increase in the year after a \nclimate-related disaster, and recovery assistance for \nrenters is dramatically lower than homeowner aid and \ntakes longer to receive. \nRising insurance premiums and the increasingly \nfrequent withdrawal by insurers from high-risk markets \nare making property insurance more expensive. Yet \neven as insurance costs are growing, coverage has \ndecreased. Nearly two-thirds of firms surveyed in 2023 \nby the National Multifamily Housing Council reported \nthat they had to increase their deductibles, and about \na third noted that their insurance carrier had limited \nor reduced coverage amounts. These rising costs \nthreaten the financial solvency of existing properties \nand can constrain the financing of new construc­\ntion, especially for affordable housing providers. \nRenters are also affected by the shifting insurance \nmarkets. Just over half have a general renters insur­\nance policy. But most of these policies do not include \nseparate flood coverage. \nWith gaps in insurance, federal resources are crucial in \nhelping renter households and communities with relief \nand recovery after disasters. The Federal Emergency \nManagement Agency’s Individuals and Households \nProgram has provided $4.5 billion directly to 1.4 million \nrenter households since 2020. Additionally, $10 billion \nof Community Development Block Grant Disaster \nRecovery funds assisted communities affected by \ndisasters between 2020 and 2022. State and local \ngrantees can use these monies to rebuild multifamily \nhousing and cover rent payments. Still, they typically \nput most of their funds toward supporting individual \nhomeowners, leaving unaddressed the assistance \nthat rental property owners may need to bring units \nback online. \nGreater investment in pre-disaster upgrades for the \nexisting rental stock is also critical to protecting the \nalready dwindling supply of affordable homes. At \nthe federal level, the new Green and Resilient Retrofit \nProgram will enable HUD-supported providers to rein­\nvest in their housing, making the units more resilient \nto extreme weather events while improving energy \nefficiency. Locally, efforts such as the Washington, DC, \nResilience and Solar Assessment tool will help owners \nof affordable multifamily properties identify adapta­\ntion improvements and potential funding sources to \npay for them. \nUltimately, increasing assistance for pre-disaster \nretrofits, supporting affordable housing providers with \ninsurance costs, and investing in regional coordinated \nplanning are critical to ensuring rental homes and \noperators are equipped to meet the challenges of \nclimate change while preserving affordability.\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n49\n\n\n--- Page 52 ---\nThe Outlook\nThough the affordability challenge is not new, it has \nnoticeably worsened in recent years. Before the \npandemic, housing cost burdens swiftly climbed \nthe income scale, especially in high-cost markets, \nwhile households with lower incomes grappled with \npersistently high burdens. The pandemic signifi­\ncantly exacerbated these problems as rents surged \nat unprecedented rates, leaving record numbers of \nrenters struggling to afford housing and other basic \nneeds. Against this backdrop and with the sunsetting \nof pandemic-era supports for renters, evictions have \nrisen and more people are experiencing homelessness \nthan ever before. \nAs a growing number of middle-income households \nstruggle with increasingly unaffordable housing, the \ncrisis is receiving more attention. State and local \ngovernments are seeking to reduce barriers to building \nhousing that is more affordable and located in desir­\nable neighborhoods. Such actions include reforming \nzoning laws to allow for a greater variety of housing \ntypes. While this work is crucial, state and local govern­\nments cannot tackle the affordability crisis alone. \nIndustry must continue to innovate less costly ways to \nbuild homes. If successful and achieved at the needed \nscale, these efforts could address the affordability \nchallenges facing middle-income renters. \nEven so, a gaping divide persists between what \nlower-income households can afford and the cost \nof building and operating rental housing. The need to \nexpand housing subsidies remains a pressing priority. \nOver the last few decades, rental assistance has failed \nto keep up with the growing number of income-eligible \nrenters. The number of unassisted renters is now at \nan all-time high, forcing households to make painful \nchoices that may include forgoing basic needs in favor \nof housing. To meaningfully shrink the affordability \ngap, all levels of government, as well as the private \nsector, must increase their commitment to assisting \nhouseholds and use every available tool. \nThere is also an increasingly urgent need to address \nchallenges at the intersection of housing and climate \nchange. Necessary actions include mitigating the \nhousing sector’s contribution to greenhouse gas emis­\nsions and adapting policies and practices to better \nhelp households recover from increasingly frequent \nclimate-related hazards. Likewise, the existing and \nfuture stock must be able to meet the needs of the \nnation’s rapidly aging population. \nProperty owners’ willingness and ability to make these \nsorts of crucial investments may be hampered by high \ncosts, and many upgrades may only be possible with \nsubsidies. Recently, federal programs have expanded \nfunding for energy-efficiency investments, with an \neye toward ensuring that rental properties and lower-\nincome communities benefit from these resources. \nImportantly, while the scope of needed investments \nis substantial, so is the cost of inaction. The instability \ncaused by a lack of affordable housing bleeds over to \nother public spending, threatening the well-being of \nmillions of people. Pandemic-era emergency housing \nprograms demonstrated the value of supporting \nstable housing while showing that we can muster the \npolitical will for these efforts. With housing challenges \ngrowing ever more severe, now is the time to make a \nfuller commitment to ensuring that all people living \nin the US have a decent, safe, and affordable place \nto call home. \n\t\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n50\n\n\n--- Page 53 ---\nADDITIONAL\nRESOURCES\nThe following interactive figures and data tables are a sample of \nthe additional resources available at www.jchs.harvard.edu.\nInteractive Maps and Data\nShare of Cost-Burdened Renters by Metro Area: 2022\nChanges in Cost-Burdened Rates by Income by State: 2001–2022\nNumber of People Experiencing Homelessness by State: 2007–2023\nDecline in Low-Rent Units by State: 2012–2022\nData Tables\nBasic Rental Housing Facts by State and Metro Area: 2022\nCharacteristics of Renter Households by State and Metro Area: 2022\nRentership Rates by State and Metro Area: 2022\nNumber and Share of Cost-Burdened Renters by State: 2001–2022\nNumber of Rental Units by Monthly Contract Rent by State: 2012–2022\n07\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n51\n\n\n--- Page 54 ---\nTable A-1\nCharacteristics of Renter Households: 2010–2022\nRenter Households (Thousands)\nPercent Change\n2010\n2019\n2022\n2010–2022\n2019–2022\nAll Renter Households\nTotal\n39,620\n44,012\n45,123\n14\n3\nAge of Householder\nUnder 35\n14,591\n15,159\n16,009\n10\n6\n35–44\n8,098\n8,776\n8,869\n10\n1\n45–54\n6,965\n6,840\n6,630\n-5\n-3\n55–64\n4,630\n6,014\n5,966\n29\n-1\n65 and Over\n5,336\n7,222\n7,650\n43\n6\nHousehold Income\nUnder $15,000\n7,132\n6,853\n7,529\n6\n10\n$15,000–$29,999\n8,072\n7,384\n7,068\n-12\n-4\n$30,000–$44,999\n6,387\n6,313\n6,926\n8\n10\n$45,000-$74,999\n8,603\n9,953\n10,076\n17\n1\n$75,000 and Over\n9,425\n13,508\n13,524\n43\n0\nHousing Cost Burdens\nNot Burdened\n19,736 \n23,623\n22,763\n15\n-4\nModerately Burdened\n9,075\n9,870\n10,292 \n13\n4\nSeverely Burdened\n10,809\n10,518\n12,068\n12\n15\nEducational Attainment of Householder\nNo High School Diploma\n6,978\n5,960\n5,518\n-21\n-7\nHigh School Diploma or GED\n10,834\n11,652\n11,829\n9\n2\nSome College\n12,952\n13,940\n13,929\n8\n0\nBachelor’s Degree\n5,960\n8,119\n8,988\n51\n11\nGraduate/Professional Degree\n2,894\n4,341\n4,859\n68\n12\nHousehold Type\nMarried, Without Children\n4,773\n5,838\n5,909\n24\n1\nMarried, with Children\n5,582\n5,633\n5,116\n-8\n-9\nSingle Parent\n6,999\n6,593\n6,349\n-9\n-4\nOther Family\n3,445\n4,110\n4,333\n26\n5\nSingle Person\n14,682\n16,811\n17,975\n22\n7\nOther Nonfamily\n4,138\n5,026\n5,442\n32\n8\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n52\nNotes: Household incomes are adjusted for inflation using the CPI-U for All Items. Moderately (severely) cost-burdened households \nspend 30–50% (more than 50%) of income on rent and utilities. Households with zero or negative income are assumed to be burdened, \nwhile households that are not required to pay rent are assumed to be unburdened.\nSource: JCHS tabulations of US Census Bureau, American Community Survey 1-Year Estimates.\n\n\n--- Page 55 ---\nAmerica’s Rental Housing 2024 was prepared by the Joint Center for Housing Studies of Harvard University. The Center \nstrives to improve equitable access to decent, affordable homes in thriving communities. We conduct rigorous research \nto advance policy and practice, and we bring together diverse stakeholders to spark new ideas for addressing housing \nchallenges. Through teaching and fellowships, we mentor and inspire the next generation of housing leaders.\nSTAFF\nWhitney Airgood-Obrycki \nCorinna Anderson \nJean Barrett \nPatricia Bravo Morales \nJames Chaknis \nKerry Donahue \nRiordan Frost \nChris Herbert \nAlexander Hermann \nAlexander von Hoffman \nMary Lancaster \nDavid Luberoff \nMagda Maaoui \nCarlos Martín \nDaniel McCue \nJennifer Molinsky \nSamara Scheckler\nSophia Wedeen \nPeyton Whitney \nAbbe Will \nJuanne Zhao\nSTUDENTS\nNora Cahill\nSophie Huang\nEtta Madete\nAditya Mukundan\nOlivia Novick\nAbby Yoon\nFELLOWS & ADVISORS\nBarbara Alexander \nFrank Anton \nDaniel Fulton \nJoe Hanauer \nNicolas Retsinas \nMark Richardson\nEDITOR\nLoren Berlin \nDESIGN\nPixels 360\nFOR ADDITIONAL COPIES, PLEASE CONTACT\nJoint Center for Housing Studies of Harvard University\n1 Bow Street, Suite 400 | Cambridge, MA 02138\nwww.jchs.harvard.edu | Twitter (X): @Harvard_JCHS\n\n\n--- Page 56 ---",
    "chunks": [
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        "text": "--- Page 1 ---\n20\n24\nAMERICA’S\nRENTAL HOUSING \nJOINT CENTER FOR HOUSING\nSTUDIES OF HARVARD UNIVERSITY \n\n\n\n--- Page 2 ---\nAMERICA’S RENTAL HOUSING 2024 \nJoint Center for Housing Studies of Harvard University\nHarvard Graduate School of Design | Harvard Kennedy School\nTABLE OF CONTENTS\n1.\t Executive Summary........................................................................................................................................... 1\n2.\t Renter Households.............................................................................................................................................9\n3.\t Rental Housing Stock.......................................................................................................................................17\n4.\t Rental Markets...................................................................................................................................................26\n5.\t Rental Affordability.........................................................................................................................................34\n6.\t \u0007Rental Housing Challenges.......................................................................................................................42\n7.\t \u0007Additional Resources..................................................................................................................................... 51\nONLINE TABLES AND EXHIBITS \nwww.jchs.harvard.edu/americas-rental-housing\nPrincipal funding for this report was provided by Wells Fargo.\n©2024 by the President and Fellows of Harvard College.\nThe opinions expressed in America’s Rental Housing 2024 do not necessarily represent the \nviews of Harvard University or Wells Fargo.\n\n\n\n--- Page 3 ---\nEXECUTIVE \nSUMMARY\nRental markets are finally cooling as a decades-high volume of new supply has come online, outpacing demand. \nNevertheless, more renter households are cost burdened than ever before, and a record number of people \nare experiencing homelessness. Pandemic resources temporarily shored up the housing safety net, but the \nneed for rental assistance remains greater than ever. Additionally, the aging rental stock requires significant \ninvestment to address structural inadequacies, inaccessibility, and climate risks. Making these investments is \nchallenging, given the current market environment of increasing operating expenses and high interest rates. \nDespite today’s difficult conditions, strong demand from the Gen Z, millennial, and baby boom generations \nshould ensure that the rental market slowdown is short lived.\nRental Markets Are Softening\nRental markets are rapidly cooling after a period \nof significant overheating. Rent growth has almost \ncompletely stopped, following historically high rent \nincreases in both 2021 and 2022. In the third quarter \nof 2023, rent growth plummeted for professionally \nmanaged apartments to just 0.4 percent, down from \n15.3 percent in early 2022, according to RealPage \n(Figure 1). While rents slowly rose across property \nclasses, the pace of growth was under 1 percent in \nthe third quarter of 2023 for lower- and higher-quality \napartments alike.\nThis abrupt deceleration was geographically wide­\nspread, with rents even falling in some markets. In the \nthird quarter of 2023, rents for professionally managed \napartments dropped year over year in 32 percent of \nthe 150 markets tracked by RealPage, including many \nin the West. Just 1 percent of markets posted rent \ngrowth of at least 10 percent in the third quarter of \n2023, a sharp turnaround from the previous year when \nrents in half of the markets increased at that rate. While \nthe slowdown is a welcome change for renters, asking \nrents still remain well above pre-pandemic levels.\n-5\n0\n5\n10\n15\n20\nAll Apartments\nClass A\nClass B\nClass C\n2015\n2017\n2019\n2021\n2023\nNotes: Asking rents are for professionally managed apartments \nin buildings with five or more units. Class A (Class C) apartments \nare relatively higher (lower) quality.\nSource: RealPage.\nFigure 1\nApartment Rent Growth Has Stalled\nAnnual Change in Asking Rents (Percent)\n01 \nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n1\n\n\n\n--- Page 4 ---\nSome of the deceleration may be explained by the \nlarge number of new units that have come online and \npushed up vacancy rates. After hitting a pandemic \nlow of 5.6 percent in late 2021, the rental vacancy rate \nwas 6.6 percent in the third quarter of 2023, according \nto the Housing Vacancy Survey. The rise in vacancies \nhas been even more pronounced in the professionally \nmanaged apartment sector. In the third quarter of \n2023, 5.5 percent of these units were vacant, above \npre-pandemic averages and more than double the \nall-time low of 2.5 percent set in early 2022. Vacancy \nrates in this sector rose fastest in the South, reaching \n6.3 percent in the first quarter of 2022.\nSlowing demand has also helped rental markets stabi­\nlize after a tumultuous 18 months. Renter household \ngrowth surged in the second year of the pandemic, \nthen tumbled before returning closer to pre-pandemic \nlevels (Figure 2). In the professionally managed apart­\nment market, growth in demand peaked in the first \nquarter of 2022 with the net addition of more than \n700,000 households year over year before plunging to \na net loss in the fourth quarter. Following modest quar­\nterly increases in demand through the first half of 2023, \nan additional 91,000 new renter households formed in \nthe third quarter, nearing pre-pandemic increases.\nUnaffordability Has Hit an All-Time High\nThough rent growth has recently slowed substan­\ntially, the extended period of rising rents during the \npandemic propelled cost burdens to new heights. \nAt last measure in 2022, a record-high 22.4 million \nrenter households spent more than 30 percent of \ntheir income on rent and utilities. This is an increase \nof 2 million households over three years and entirely \noffsets the modest improvements in cost-burden rates \nrecorded between 2014 and 2019 (Figure 3). Among \ncost-burdened households, 12.1 million had housing \ncosts that consumed more than half of their income, \nan all-time high for severe burdens.\nAs a result, the share of cost-burdened renters rose to \n50 percent, up 3.2 percentage points from 2019. The \nfinancial strain has been felt across the income spec­\ntrum. Since 2019, cost-burden shares have risen the \nmost for middle-income renter households earning \n$30,000 to $44,999 annually (up 2.6 percentage points) \nor $45,000 to $74,999 annually (up 5.4 percentage \npoints). Higher-income households also saw their \nburden rate increase by 2.2 percentage points. House­\nholds earning less than $30,000 annually, a popula­\ntion already grappling with persistently high burdens, \nrecorded a 1.5 percentage point increase.\nThe dwindling supply of low-rent units is only wors­\nening cost burdens. In 2022, just 7.2 million units had \ncontract rents under $600—the maximum amount \naffordable to the 26 percent of renters with annual \nincomes under $24,000. This marks a loss of 2.1 million \nunits since 2012 when adjusting for inflation. The spike \nin asking rents during the pandemic accelerated the \ntrend, with more than half a million low-rent units lost \njust between 2019 and 2022.\nThese losses have contributed to a decades-long \nchallenge for renters: rent increases are outpacing \nincome gains. Median rents have risen nearly continu­\nously since 2001 in inflation-adjusted terms and are 21 \npercent higher as of 2022. Meanwhile, renters’ incomes \nhave risen just 2 percent during the same period.\nAnnual Net Change\n-200\n-100\n0\n100\n200\n300\n400\n500\n600\n700\n800\n2013\n2015\n2017\n2019\n2021\n2023\nNote: Annual net change is the four-quarter rolling total for \nprofessionally managed apartment buildings with five or  \nmore units. \nSource: RealPage.\nFigure 2\nApartment Demand Has Started to Rebound\nChange in Apartment Households (Thousands)\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n2\n\n\n\n--- Page 5 ---\n0\n10\n20\n30\n40\n50\n60\n0\n5\n10\n15\n20\n25\n30\n2001\n2002\n2003 2004 2005 2006 2007 2008 2009 2010\n2011\n2012\n2013\n2014 2015\n2016\n2017\n2018\n2019\n2020 2021\n2022\nSeverely Cost Burdened\nModerately Cost Burdened\nShare with Cost Burdens (Right Scale)\nNotes: Moderately (severely) cost-burdened households spend 30–50% (more than 50%) of income on rent and utilities. Households \nwith zero or negative income are assumed to have burdens, and households that are not required to pay rent are assumed to be \nunburdened. Estimates for 2020 are omitted because of data collection issues experienced during the pandemic. \nSource: JCHS tabulations of US Census Bureau, American Community Survey 1-Year Estimates.\nFigure 3\nThe Number of Cost-Burdened Renters Hit an All-Time High\nNumber of Renter Households (Millions)\t\nShare with Cost Burdens (Percent)\nConsequently, residual incomes—the amount of \nmoney available after paying for rent and utilities to \ncover other needs—have dropped significantly. Those \nwith lower incomes are especially squeezed. Renter \nhouseholds earning less than $30,000 annually had \nan all-time low median residual income of just $310 \nper month in 2022, down 47 percent from 2001 after \nadjusting for inflation. Further, the vast majority of \nthese renters are cost burdened. For this substan­\ntial subset, the median monthly residual income was \njust $170. According to the Economic Policy Institute, \na single-person household in the most affordable \ncounties needs about $2,000 each month to cover \nnonhousing needs.\nSuch tight budgets force financially vulnerable renters \nto make dreadful choices. Center tabulations of the \n2022 Consumer Expenditure Survey indicate that \nseverely cost-burdened renter households in the \nlowest expenditure quartile spent 39 percent less on \nfood and 42 percent less on healthcare than their \nunburdened counterparts. Others may end up living \nin overcrowded or structurally inadequate conditions, \nthreatening their health and well-being.\nA Record Number of People Are \nExperiencing Homelessness\nThough pandemic-era protections and financial \nsupports temporarily reduced eviction filings, these \nresources are largely expired or winding down, and \nhousing instability is once again on the rise. The Eviction \nLab estimated that eviction filings dropped 58 percent \nfrom the start of the pandemic through the end of \n2021, aided in part by federal, state, and local eviction \nmoratoriums and the $46.55 billion Emergency Rental \nAssistance (ERA) program. However, by mid-2023, \nmany states had nearly depleted their ERA funds, and \neviction filings had returned to pre-pandemic levels.\nStill, the pandemic raised awareness of the importance \nof stable housing, and many state and local govern­\nments are building on that momentum. About half of \nthe ERA administrators surveyed by the National Low \nIncome Housing Coalition indicated that they plan to \ncontinue operating their programs after exhausting \ntheir federal allocations. And since 2021, three states \nand 12 local governments have enacted right-to-\ncounsel programs to connect eligible renters at risk \nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n3\n\n\n\n--- Page 6 ---\nof eviction with legal representation. While these efforts \nare helpful, they do not function at the same scale as \nfederal policies and funding sources.\nLike evictions, homelessness has grown as housing \ncosts have increased, hitting an all-time high of 653,100 \npeople in January 2023 (Figure 4). In the first years of \nthe pandemic, renter protections, income supports, \nand housing assistance helped stave off a consid­\nerable rise in homelessness. However, many of these \nprotections ended in 2022, at a time when rents were \nrising rapidly and increasing numbers of migrants \nwere prohibited from working. As a result, the number \nof people experiencing homelessness jumped by \nnearly 71,000 in just one year. Included in this increase \nwere an additional 22,780 people staying in places \nnot intended for human habitation, including on the \nstreets, in cars, or in abandoned buildings. In 2023, the \ntotal number of people experiencing homelessness \nin unsheltered locations reached 256,610, the highest \non record.\nRising unsheltered homelessness is a longer-term \nand geographically widespread trend. The number of \nunhoused people staying outside shelters increased \nby more than 83,000 people (48 percent) between \n2015 and 2023. This population grew quickly in expen­\nsive states like California, Washington, and Oregon, \nwhere shelter resources were already strained, but \nmore affordable states also recorded increases. \nArizona, Ohio, Tennessee, and Texas were among the \nstates with the largest growth in the number of people \nunsheltered as housing costs have risen.\nThe current administration has made additional \nfederal resources available to reduce homeless­\nness and expand support systems. This includes an \nunprecedented $3.1 billion through the US Department \nof Housing and Urban Development’s (HUD’s) existing \nContinuum of Care program. Significant monies have \nlikewise been allocated via the 2021 American Rescue \nPlan (ARP) Act, including the $5 billion HOME-ARP \nprogram for services, shelters, and housing, plus \n70,000 Emergency Housing Vouchers. State and local \ngovernments have also invested more than $3.8 billion \nof their fiscal recovery funds in homelessness services \nand housing. Even so, considerably more affordable \nhousing and rent subsidies will be needed to prevent \nfurther increases in homelessness, to help rehouse \npeople at scale, and to reduce the costs of the home­\nlessness response system.\nTotal\nSheltered\nUnsheltered\n100\n200\n300\n400\n500\n600\n700\n2007\n2009\n2011\n2013\n2015\n2017\n2019\n2021\n2023\nNotes: Because of the pandemic, complete unsheltered counts \nwere unavailable in January 2021 and sheltered counts were \nartificially low, likely because of reduced shelter capacity. Data \nfor 2021 are based on 2020 and 2022 values.\nSource: US Department of Housing and Urban Development, \nAnnual Homeless Assessment Report Point-in-Time Estimates.\nFigure 4\nAfter a Swift Uptick in 2023, a Record Number of \nPeople Are Unhoused\nPeople Experiencing Homelessness (Thousands)\nHoles Are Widening in the Housing \nSafety Net\nRapidly rising rents, combined with wage losses in \nthe early stages of the pandemic, have underscored \nthe inadequacy of the existing housing safety net, \nespecially in times of crisis. Because rental assistance \nprograms are not an entitlement, they only serve one in \nfour income-eligible households. Their reach has been \nfurther constrained by insufficient budget outlays in \nthe face of growing need. Though the number of very \nlow-income renter households grew by 4.4 million \nbetween 2001 and 2021, the number of assisted house­\nholds in this income range increased by just 910,000.\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n4\n\n\n\n--- Page 7 ---\nConsequently, 60 percent of very low-income house­\nholds (8.5 million) who were eligible for but did not \nreceive rental assistance spent more than half of their \nincome on housing or lived in severely inadequate \nhousing conditions—sometimes both. This was a \nsubstantial increase from the 47 percent of unassisted \nhouseholds (5.0 million) with worst case housing needs \nin 2001 (Figure 5).\nThe subsidized stock and rental assistance programs \nthat do exist have vulnerabilities, too. The dwindling \npublic housing supply, home to 835,000 households \nin 2022, has a maintenance backlog estimated at \n$90 billion. To address the huge need for repairs in \nan environment of insufficient capital funding, the \nRental Assistance Demonstration program lets public \nhousing authorities convert their units to longer-term, \nstable Section 8 contracts. More than 225,000 public \nhousing units have been converted to date, enabling \nhousing providers to leverage other funding sources \nfor improvements and redevelopment. Still, many \nmore resources are required to sufficiently address \nthe scope of the needed repairs and improvements \nand preserve this critical stock.\n0\n2\n4\n6\n8\n10\n12\n14\n16\n2001\n2021\nAssisted\nModerate or No Problems\nSevere Problems\nUnassisted:\nNotes: Severe problems include spending more than 50% of income \non rent and utilities or living in severely inadequate housing. \nModerate problems include spending 30–50% of income on rent \nand utilities or living in moderately inadequate housing. \nSource: JCHS tabulations of US Department of Housing and Urban \nDevelopment, Worst Case Housing Needs Reports to Congress.\nFigure 5\nThe Rental Assistance Shortage Continues \nto Worsen\nVery Low-Income Households (Millions)\nThe subsidized supply also faces expiring affordability \nperiods and maturation. The Low-Income Housing Tax \nCredit (LIHTC) has supported more than 3.6 million \nunits since its creation in 1986. These units have a \nminimum 30-year affordability requirement (with \nlonger timelines in some states), after which they can \nflip to market-rate rents. Recent estimates suggest \nthat affordability periods for more than 325,000 units \nare set to expire between 2024 and 2029. Another 7,000 \nunits are lost prematurely each year when owners \nuse the tax code’s qualified contract option to opt out \nafter an initial 15-year period. Likewise, the entire stock \nof Section 515 units managed by the US Department \nof Agriculture (USDA), home to 378,000 renter house­\nholds in rural areas, is facing mortgage maturities that \nthreaten continued affordability.\nHousing Choice Vouchers are another crucial housing \nsubsidy facing challenges. Vouchers assisted 2.3 \nmillion households in 2022, covering the difference \nbetween 30 percent of a household’s income and their \narea’s fair market rent. The subsidy relies on participa­\ntion by private-market landlords, who are not required \nto accept the vouchers in most places. Further, the \nunit inspection and approval processes add time and \ncomplexity that may deter some landlords from partic­\nipating, especially in hot markets where the incentive \nto participate can be lower.\nVoucher holders also struggle with the program. \nThey may not be able to find a landlord who accepts \nvouchers or a suitable apartment that meets the \nprogram’s guidelines. About 40 percent of people \nwho receive a voucher are unable to use the subsidy \nin the short amount of time allotted by the program \nto sign a lease.\nWhile there have been proposals to expand the \nnational housing safety net and preserve affordable \nunits, shortfalls in federal rental assistance programs \nand worsening cost burdens have prompted state \nand local governments to act to the extent that \nthey can. States and localities are leveraging other \nfederal resources, such as state and local fiscal \nrecovery funds, to support affordable housing.\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n5\n\n\n\n--- Page 8 ---\nA number of states, counties, and cities issued a record \n$17.2 billion of multifamily bonds in 2020 to supplement \nLIHTC allocations. Nationwide, states and cities also \ngenerate about $3 billion annually through housing \ntrust funds to meet local housing needs. All of these \nefforts are crucial but fall short of the growing need.\nAging Rental Stock Will Require \nReinvestment\nThe rental stock is older than it has ever been. The \nmedian age was 44 years in 2021, up from 34 years \ntwo decades ago. Although building construction \nstandards and repairs to existing units have helped \nto minimize the problem of structural inadequacy, a \nlarge number of rental units still fall short of baseline \nhabitability and safety. Nearly 4 million renter house­\nholds live in physically inadequate units with problems \nsuch as structural deficiencies, a lack of upkeep, or \ninconsistent provision of basic features like electricity, \nhot and cold running water, or heat. Even among units \nthat meet the criteria for physical adequacy, many \nstill have significant unmet repair needs. The Federal \nReserve Bank of Philadelphia estimated in 2023 that it \nwould cost $51.5 billion to address the physical defi­\nciencies of the occupied rental stock.\nMuch of the rental stock does not meet householders’ \naccessibility needs. The rapidly growing population \nof older adults will increase demand for accessibility \nfeatures, given that the occurrence of disabilities rises \nwith age. According to a 2023 survey conducted by \nFreddie Mac, nearly half of renters with disabilities say \ntheir homes are minimally or not at all accessible. \nRespondents most often reported needing bathroom \nmobility aids, home security systems, no-step entries, \nand accessible electrical outlets.\nThe rental stock also needs significant energy effi­\nciency and electrification modifications to reduce \ngreenhouse gas emissions and the high energy costs \nsqueezing lower-income renters. Rental homes—\nespecially those in small multifamily buildings—use \nmore energy per square foot than owner-occupied \nhomes, according to the Residential Energy Consump­\ntion Survey. Older homes also use more energy than \nnewer homes and have significant efficiency and \nelectrification needs.\nA one-time infusion of $3.5 billion for the Weatheriza­\ntion Assistance Program through the 2021 Infrastruc­\nture Investment and Jobs Act is helping some renters \nand rental property owners with home retrofits. Simi­\nlarly, the 2022 Inflation Reduction Act provided $8.8 \nbillion in efficiency and electrification improvement \nrebates for market-rate housing, including rental units, \nand $1 billion for efficiency upgrades to HUD-subsidized \nproperties. However, more incentives are needed to \nmeet the challenges of retrofitting the existing rental \nstock and ensure that new rental units are constructed \nwith high energy performance in mind.\nAnother growing threat to the quality of the nation’s \nstock of rental housing comes from the increasing \nfrequency and severity of weather- and climate-\nrelated hazards like wildfires, flooding, earthquakes, \nand hurricanes. More than 18 million occupied rental \nunits (41 percent) are located in areas with substantial \nexpected losses from such events. Simultaneously, a \ngrowing number of insurers are declining coverage \nin high-risk housing markets, making it increasingly \ndifficult and expensive for property owners and renters \nto obtain and afford the insurance needed to cover \npotential losses. To protect households and commu­\nnities, states and localities will need to push for hazard \nmitigation and climate adaptation measures for indi­\nvidual properties and across regions.\nHigh Interest Rates Have Depressed \nMarket Activity\nWith interest rates rising into 2023, the cost of debt to \nacquire and build multifamily properties has risen. At \nthe same time, high treasury yields have increased \nthe cost of equity, as apartments must provide greater \nreturns to investors to compete with Treasury notes.\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n6\n\n\n\n--- Page 9 ---\nAgainst this backdrop, borrowing and transac­\ntion activity has declined. More than half the banks \nsurveyed by the Federal Reserve reported that demand \nfor multifamily loans has decreased. Further, nearly \ntwo-thirds of multifamily lenders tightened their \nunderwriting criteria in response to uncertain prop­\nerty performance and interest rate hikes. Multifamily \nmortgage borrowing was down 48 percent year over \nyear in the second quarter of 2023.\nAs the cost of capital has risen, property prices have \ndropped. The beginning of 2023 marked the first time \nthat apartment prices fell year over year in more than \na decade. By the third quarter, prices were down 13 \npercent, a remarkable turnaround from the peak 23 \npercent growth rate posted at the beginning of 2022. \nFalling property prices reflect rising capitalization \nrates—an indicator of returns used to compare invest­\nments. According to Moody’s Analytics, cap rates fell \nthrough 2022 before rising by 0.9 percentage points \nover the first three quarters of 2023 to 5.8 percent. In the \ncurrent environment, higher-risk multifamily invest­\nment can be less attractive than lower-risk Treasuries.\nFor those who already own rental properties, net \noperating incomes are rising at a slower pace as rent \ngrowth moderates and expenses increase. According \nto Yardi Matrix, the cost of operating multifamily prop­\nerties grew 9 percent year over year in June 2023. In \nresponse, net operating income growth slowed to 3 \npercent in the third quarter of 2023, from the recent \nhigh of 25 percent posted in 2021.\nWhile slowing returns could spark delinquencies, most \nproperty owners should be protected by the signifi­\ncant equity accrued before the pandemic. Moreover, \nmost loans were underwritten with enough cushion to \ncover debt service. Plus, longer-term loans constitute \nthe largest share of all multifamily debt and have \nfewer near-term maturities that will not require refi­\nnancing in the current high interest rate environment. \nTo date, delinquencies have only inched up from their \nultra-low levels.\nNew Multifamily Construction \nHas Slowed\nAfter a major boom, multifamily construction has \nstarted to cool. As late as the spring, starts remained \nelevated even as interest rates rose, with a season­\nally adjusted annual rate of 571,000 units posted in \nMay 2023 (Figure 6). But with markets slackening and \n0\n100\n200\n300\n400\n500\n600\n700\nMonthly Starts\nAverage Starts (3-Month Trailing)\n2000\n2002\n2004\n2006\n2008\n2010\n2012\n2014\n2016\n2018\n2020\n2022\nNote: Data are for buildings with at least two units and are through October 2023.\nSource: JCHS tabulations of US Census Bureau, New Residential Construction data.\nFigure 6\nNew Multifamily Construction Has Quickly Declined\nAnnualized Multifamily Units (Thousands, Seasonally Adjusted)\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n7\n\n\n\n--- Page 10 ---\nhigh financing costs making it increasingly difficult \nto underwrite new deals, starts have fallen sharply \nin recent months. In October 2023, starts receded to \n402,000 units, a 30 percent decrease year over year.\nNevertheless, units that were already under way \ncontinue to come online in large numbers. A total \nof 436,000 multifamily units were completed in the \nthird quarter of 2023 on a seasonally adjusted annu­\nalized basis, the highest reading since 1988 and up \nabout a third from pre-pandemic levels. Likewise, the \nnumber of multifamily units currently under construc­\ntion reached the highest level on record in July 2023, \nmaintaining that fast pace at a seasonally adjusted \nannual rate of 1.0 million units in October.\nWhile the pipeline of units under construction should \nhelp provide new supply in the near term, declining \nstarts could worsen the existing supply shortage. Addi­\ntionally, local regulations and zoning laws constrain \nmultifamily construction in many neighborhoods. \nNationally, an estimated 75 percent of the land in \nmajor cities is zoned exclusively for single-family \nhomes. Several states have preempted local zoning \nlaws to allow a range of housing options. In 2023, \nMontana, Vermont, and Washington passed legisla­\ntion that allows modest-sized multifamily buildings \non lots previously zoned only for single-family homes, \nfollowing the lead of California, Maine, and Oregon. \nZoning reforms do not guarantee the construc­\ntion of new multifamily housing, but they remove a \nsignificant barrier.\nThe Outlook\nOver the coming year, the softening of the rental \nmarket will likely continue as the pipeline of units under \nconstruction boosts supply beyond already high levels \nand continues to slow rent growth. This will be good \nnews for renters, providing relief for households with \nhigher and middle incomes. But respite will likely be \nshort-lived in the face of strong demand from the \nlarge Gen Z, millennial, and baby boom generations.\nAffordability remains a critical concern. Lower-\nincome renters face the worst affordability conditions \non record. Rental subsidies have not kept pace with the \ngrowing need, leaving those without assistance to fend \nfor themselves in one of the costliest housing markets \nin history. And homelessness is at an all-time high. \nIncreasing the supply of market-rate units will help \nto address the affordability crisis but cannot wholly \nresolve it. Rather, significantly expanding assistance—\nespecially the programs that help the lowest-income \nrenters—will also be a crucial part of the solution.\nIn the short term, rising operating costs and high \ninterest rates will present a formidable challenge for \nproperty owners. The slowing growth in operating \nincomes will make it more difficult for property owners \nto invest in repair and maintenance, accessibility \nfeatures, and climate change mitigants and adap­\ntations. Yet, the massive pre-pandemic accumulation \nof equity, coupled with the pandemic’s unprecedented \nrent increases, should prevent widespread distress \namong property owners.\nDuring the pandemic, the increased resources for \nrenters, housing providers, and state and local govern­\nments demonstrated that financial assistance and \nsupports keep tenants stably housed and landlords \nsolvent. But as these resources have expired or been \nspent down, the housing safety net is once again over­\nwhelmed and underfunded, as has been the case for \nmany decades. While states and localities have acted \nto fill some of the gaps, a larger commitment from the \nfederal government is required to expand housing \nsupports and preserve and improve the existing \naffordable stock. Only then will the nation finally make \na meaningful dent in the housing affordability crisis \nmaking life so difficult for millions of people.\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n8\n\n\n\n--- Page 11 ---\nRENTER \nHOUSEHOLDS\nDemand for rental housing is stabilizing after the erratic highs and lows of the pandemic. The number of smaller \nrenter households with lower incomes has grown in recent years and remains an important source of rental \ndemand. Nevertheless, longer-term demand has come from the growing number of renter households with \nhigher incomes, and has reshaped rental markets over the last decade. The large Gen Z, millennial, and baby \nboom generations have also supported rising numbers of renter households. While overall renter mobility rates \nare falling, migration is helping to sustain demand in some states.\nRental Demand Is Returning \nFollowing the pandemic rollercoaster, demand for \nrental housing is finally stabilizing. After an initial slow­\ndown during the first year of the pandemic, rental \ndemand surged in 2021. A flood of new households \nfueled a quick rise in rents and historically low vacancy \nrates. In recent quarters, renter household growth has \nreturned to the more typical pace witnessed in the \nyears preceding the pandemic, buoyed in part by the \nhigh cost of homeownership, an influx of new supply \nhelping to moderate rents, and a strong job market \n(Figure 7).\n25\n28\n3 1\n34\n37\n33\n34\n35\n36\n37\n38\n39\n40\n41\n42\n43\n44\n45\n2001 2002 2003 2004 2005 2006 2007 2008 2009 2010\n2011\n2012\n2013\n2014\n2015\n2016\n2017\n2018\n2019 2020\n2021\n2022 2023\nRenter Households\nRentership Rate (Right Scale)\nNotes: Values for 2023 are year-to-date averages for the first three quarters. Values for 2020 are omitted because data collection was \ndisrupted during the pandemic.\nSource: JCHS tabulations of US Census Bureau, Housing Vacancy Surveys.\nFigure 7\nThe Number of Renter Households Is Trending Upward Despite Declining Rentership Rates\nRenter Households (Millions)\t\nRentership Rate (Percent)\nThe professionally managed apartment market—a \nsector that typically houses renters with higher \nincomes and constitutes more than a quarter of US \nrental units—has been particularly prone to these \ndramatic fluctuations in household growth. After \nhitting a record-breaking 706,000 year-over-year net \n02\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n9\n\n\n\n--- Page 12 ---\nincrease at the beginning of 2022, growth in renter \nhouseholds plummeted quickly to an annual net loss \nof 192,000 by the first quarter of 2023, according to \ndata from RealPage. However, following three quar­\nters of decline, the quarter-over-quarter change in \nthe number of occupied apartments turned slightly \npositive at the start of 2023, followed by a modest \nsecond-quarter reading. Rental demand accelerated \nin the third quarter with 91,000 new renter households, \nputting household growth nearly on par with readings \nbefore the pandemic.\nThe overall rental market also saw swift increases in \nhousehold formations in 2021 followed by a return to \npre-pandemic levels of growth in 2023. According to \nCenter tabulations of the Housing Vacancy Survey, \nthe number of renter households reached 44.3 million \nin the third quarter of 2023—34.1 percent of US house­\nholds. Of the 927,000 renter households that entered \nthe market since the start of the pandemic, about \n317,000 did so within the last year. This growth signals \na return to the pace posted before the pandemic. In \n2019, 299,000 renter households entered the market.\nRenter Household Growth Is Shifting \nMuch of the short-term growth in renters has come \nfrom smaller households and those with lower and \nmore moderate incomes. In the years leading up to the \npandemic, rental demand increased among house­\nholds earning at least $75,000 annually. Between 2016 \nand 2019, the rental market added 1.3 million higher-in­\ncome households while losing 1.0 million households \nwith annual incomes under $75,000, according to data \nfrom the American Community Survey (Figure 8). This \ntrend reversed during the pandemic. Between 2019 \nand 2022, most renter growth came from the 1.1 million \nadditional households with incomes under $75,000. \nOver this same period, the number of renter house­\nholds with higher incomes rose by just 16,000.\nThis recent slowdown in renter household growth \namong those with incomes of $75,000 or more was \nat least partially attributable to increasing rates of \nhomebuying by renters with even higher incomes who \ntook advantage of the low interest rates available in \nthe early part of the pandemic. The modest loss of \n1\n2\n3 or More\nNumber of People in Household\n-1.0\n-0.5\n0.0\n0.5\n1.0\n1.5\nUnder $30,000\n$30,000-$74,999\n$75,000 and Over\nHousehold Income\n2016-2019\n2019-2022\nNote: Household incomes are adjusted for inflation using the CPI-U for All Items.\nSource: JCHS tabulations of US Census Bureau, American Community Survey 1-Year Estimates.\nFigure 8\nLess Affluent, Smaller Households Boosted Pandemic-Era Renter Growth\nChange in Renter Households (Millions)\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n10\n\n\n",
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        "text": "--- Page 13 ---\nrenter households earning at least $150,000 was more \nthan offset by the uptick in homeowners in this income \nbracket. Additionally, some of the decrease was likely \namong renter households with higher incomes that \ncapitalized on rent deals in the early months of the \npandemic to split into smaller households with lower \nincomes. The largest increases in renter households \nbetween 2019 and 2022 came from single- and \ntwo-person households with incomes below $75,000.\nIn fact, single-person renter households grew most \nacross all income brackets during the pandemic, \nincreasing by 1.2 million between 2019 and 2022, \neclipsing the 722,000 households of that type added \nbetween 2016 and 2019. Rental demand also bene­\nfited from roommate (416,000) and extended family \n(223,000) arrangements, with most of this growth \ncoming from two-person households. Further contrib­\nuting to the growth in smaller renter households was \na decrease in the number of married couples with \nchildren and single parents, possibly explained by \ntransitions to homeownership or by the splitting of \nthese households into new ones.\nA New Generation Is Driving Demand \nRenting plays an important role in housing people \nthroughout the life course. For younger people, renting \nprovides an opportunity to live independently while \nentering adulthood. Delayed marriage and parent­\nhood have also increased the attractiveness and the \nnecessity of renting further into adulthood. For people \nat older ages, rental homes can support indepen­\ndent living through better accessibility and reduced \nmaintenance. At all ages, renting is a flexible option \nthat makes it easier for people to adjust their housing \naccording to their personal circumstances.\nOver the past decade, the bulk of the growth in renter \nhouseholds has come from younger generations. \nThe millennial generation, those born between 1980 \nand 1994, drove much of the renter growth until 2016. \nThis generation is not only the largest, but also more \nlikely to rent than prior ones at the same ages. Having \ncome of age during the Great Recession with fewer \njob prospects, lower wages, high student loan debt, \nand tightened mortgage lending, many have delayed \nhomeownership. As a result, the number of millenni­\nal-headed renter households grew by an enormous \n6.2 million between 2009 and 2019 to a peak of 16.2 \nmillion (Figure 9).\n0\n2\n4\n6\n8\n10\n12\n14\n16\n18\n2007\n2008\n2009\n2010\n2011\n2012\n2013\n2014\n2015\n2016\n2017\n2018\n2019\n2020\n2021\n2022\nGen Z\n(Born 1995–2009)\nMillennial\n(Born 1980-1994)\nGen X\n(Born 1965-1979)\nBaby Boom \n(Born 1946-1964)\nPre-Boom \n(Born 1945 or Earlier)\nNote: Data for 2020 are based on 2019 and 2021 values because of pandemic data disruptions.  \nSource: JCHS tabulations of US Census Bureau, American Community Survey 1-Year Estimates.\nFigure 9\nNew Rental Demand Has Shifted from Millennials to Gen Z\nRenter Households (Millions)\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n11\n\n\n\n--- Page 14 ---\nWhile millennials will remain a large source of rental \ndemand in coming years, they are no longer fueling the \ngrowth in renter households. Rather, they are aging into \nprime homeownership years, a transition that markets \nare already witnessing. The number of renter house­\nholds headed by a millennial fell by 797,000 between \n2019 and 2022 as their homeownership rate increased \nby 9 percentage points during the same period.\nInstead, members of the slightly smaller but still large \nGen Z, individuals born between 1995 and 2009, are \ndriving rental demand. Already, these individuals \nheaded 7.9 million renter households in 2022. Going \nforward, overall growth in renter households will \ndepend upon whether the rise in the number of Gen \nZ renters will be sufficient to overcome the eventual \ndecline in older renters. This was true for millennials \nduring the 2000s and 2010s. However, Gen Z may follow \na different trajectory, given that this generation already \nhas higher homeownership rates than millennials did \nat the same age.\nBaby boomers also continue to help sustain longer-\nterm rental demand. Even though the number of renter \nhouseholds headed by a baby boomer is decreasing, \nthe generation is so much bigger than any before it \nthat the number of older renters is still growing. In the \nlast five years alone, renter households headed by \nsomeone age 65 and over increased by more than \n1 million. With the oldest baby boomers turning 80 in \n2026—an age when more people turn to renting—a \nwider range of affordable rental options for older \nadults will be required to accommodate their changing \nneeds. Renting will be an especially attractive option \nfor older adults who want to age in their community, \nreduce their maintenance responsibilities, and access \nthe shared spaces for social interaction and accessi­\nbility features more common in multifamily buildings.\nHigher-Income Households Are \nExerting More Influence\nWhile households with lower incomes led growth \nduring the pandemic, higher-income households have \nincreasingly driven rental demand over the longer \nterm. The number of renter households with incomes \nof $75,000 or more has risen 43 percent since 2010, to \n13.5 million as of 2022 (Figure 10). Likewise, the share of \nrenters earning at least $75,000 annually has risen by \nmore than 6 percentage points to 30 percent during \nthis same period. Much of the growth has come from \n0\nUnder $15,000\n$15,000-$29,999\n$30,000-$44,999\n$45,000-$74,999\nHousehold Income\n2010\n2016\n2022\n2\n4\n6\n8\n10\n12\n14\n$75,000 and Over\nNote: Household incomes are adjusted for inflation using the CPI-U for All Items.  \nSource: JCHS tabulations of US Census Bureau, American Community Survey 1-Year Estimates.\nFigure 10\nHouseholds with Higher Incomes Have Fueled Long-Term Demand\nRenter Households (Millions)\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n12\n\n\n\n--- Page 15 ---\nrenters who are married and have college educations, \na demographic that fits previous generations’ profile \nof first-time homebuyers.\nHigher-income renters have characteristics that set \nthem apart from the typical renter household. For \nstarters, they are younger. Fully 42 percent of them are \naged 35–54, as compared to 34 percent of all renters. \nThey are also more likely to be married, with 40 percent \nwedded versus 24 percent of all renter households. \nGiven these demographic trends, it is perhaps unsur­\nprising that higher-income renters are slightly more \nlikely to have children and larger households than the \ngeneral population of renters. And because income \ncorrelates with education, these renters have higher \nlevels of education, with more than half possessing at \nleast a bachelor’s degree, including 20 percent with a \ngraduate or professional degree.\nFinally, renters with higher incomes are dispropor­\ntionately white (53 percent) or Asian (9 percent) as \ncompared to all renters (50 percent and 5 percent, \nrespectively). Meanwhile, Black householders are \nunderrepresented in this market segment, consti­\ntuting just 13 percent of these renters (compared to 19 \npercent of all renters). Households headed by Hispanic \n(20 percent), multiracial (4 percent), and Native Amer­\nican (0.4 percent) renters are evenly represented.\nRenter households with incomes of at least $75,000 \nare most common in metros with high rentership rates, \nmedian household incomes, and housing costs. In \nthese areas, renting is more the norm, and homeown­\nership options may be prohibitively expensive, even for \nhouseholds with higher incomes. For example, in both \nSan Jose and San Francisco, households with higher \nincomes make up more than half of all renters. In these \ntwo metros, the rentership rate among higher-income \nhouseholds is more than 35 percent, as compared to \n22 percent nationally.\nConversely, households with higher incomes make up \nsmaller shares of renters in markets where housing \ncosts are more affordable and incomes tend to be \nlower. Most of these metros are located in the South or \nMidwest, including Cleveland, Columbia, El Paso, and \nJackson, where rentership rates among households \nwith annual incomes at or above $75,000 are under \n18 percent.\nThe elevated rentership rate among higher-income \nhouseholds in expensive markets suggests that \nobstacles to homeownership are formidable, even \nfor households with above-average earnings. Industry \nsurveys have found that many renters hope to own a \nhome someday but consider their goal out of reach. A \nquarter of millennial households surveyed by Apart­\nment List, for example, reported that they will always \nrent, citing affordability as the biggest barrier to home­\nownership. Rising rents have challenged renters’ ability \nto save for a downpayment. At the same time, the low \nvolume of for-sale inventory and escalating home \nprices make it difficult for even higher-income renters \nto become homeowners.\nStill, attractive rental options—such as single-family \nhomes and apartments with amenities—in desirable \nlocations have encouraged some households with \nhigher incomes to continue to rent. In 2022, about 8.5 \nmillion renter households made at least $100,000 per \nyear, incomes that put the nation’s median-priced \nhome within reach. Of these households, 39 percent \nlived in single-family rental homes. An additional 19 \npercent lived in apartments in large multifamily build­\nings with at least 50 units, properties that tend to be in \nurban areas and rich with amenities. A third of house­\nholds with incomes of $100,000 or more lived in new \nrental units built after 2000.\nThe existing range of rental options may enable \nthese more affluent households to live in the type of \nhousing they want, in a location that suits them, and \nin a high-quality home while still enjoying the flexi­\nbility and convenience of renting. These advantages \nmay make renting a more attractive option than \nhomebuying, even for households that could afford \nto become homeowners.\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n13\n\n\n\n--- Page 16 ---\nMany Renters Are Economically \nVulnerable\nWhereas renting may be a choice for some house­\nholds with higher incomes, it may be the only option \nfor those who earn less. The median renter house­\nhold income in 2022 was about $47,000, and a signif­\nicant share of renters have much lower incomes. \nThirty-two percent of renters (14.6 million) had house­\nhold incomes below $30,000 in 2022. According to the \nmost recent Survey of Consumer Finances in 2022, \nthese renters had a median cash savings of just \n$300 and total net wealth—including retirement \naccounts and other investment funds—of just $3,200. \nThese financially precarious households face a \ngreater risk of housing instability and cost burdens \nbut remain an important source of rental demand.\nThe characteristics of lower-income renter households \ncan add to their economic vulnerability. As compared \nto both the full renter population and the higher-\nincome households that have driven demand over \nthe last decade, households with lower incomes \nare more likely to be headed by an older adult and \nconsist of a single person (Figure 11). Over a quarter \n(28 percent) of renter households with lower incomes \nare headed by someone at least 65 years old, a full \n11 percentage points more than that of all renter \nhouseholds. An additional 16 percent are headed \nby someone between the ages of 55 and 64. The \nolder age distribution contributes to the high share \nof lower-income households that consist of a single \nperson (59 percent) and the low share that have \nchildren (21 percent).\nFurther, lower-income households may be espe­\ncially financially fragile because of their lower levels \nof educational attainment and higher prevalence \nof disability, both of which can limit job prospects. \nMore than half of lower-income renter households (53 \npercent) are headed by someone without a college \ndegree, compared to 38 percent of all renters, and just \n16 percent have at least a bachelor’s degree. Disabili­\nties can make it difficult for households to secure and \nretain employment, depressing household earnings.\nA full 34 percent of all lower-income renter house­\nholds are headed by a person with a disability, the \nmajority of whom are under age 65.\nLower-Income\nRenters\nHigher-Income\nRenters\nAll Renters\nSingle Person\nMarried\nOther Family\nRoommates\nHousehold Type\n0\n10\n20\n30\n40\n50\n60\n70\n80\n90\n100\nLower-Income\nRenters\nHigher-Income\nRenters\nAll Renters\nAge\nUnder 35\n35-44\n45-54\n55-64\n65 and Over\nNotes: Lower-income households earn less than $30,000. Higher-income households earn at least $75,000. Age is for the household \nhead. Other family households include single parents.\nSource: JCHS tabulations of US Census Bureau, 2022 American Community Survey 1-Year Estimates.\nFigure 11\nLower-Income Renters Are More Likely to Be Older and Live Alone\nShare of Households (Percent)\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n14\n\n\n\n--- Page 17 ---\nAnd because racial discrimination in education and \nlabor markets restricts opportunities and wages, \nhouseholds headed by a Black person are more likely \nto have lower incomes than households of other races \nand ethnicities. Consequently, they constitute an \noutsized share of lower-income renter households. \nA full 42 percent of households headed by a Black \nperson earn less than $30,000 annually, compared \nto 30 percent of those headed by a white person with \nsimilarly low incomes. As a result, households headed \nby a Black person make up a quarter of lower-in­\ncome households despite being just under a fifth of \nall renter households. Likewise, households headed \nby a Native American person face economic chal­\nlenges and discrimination that make them more \nlikely to face financial precarity. Indeed, 42 percent \nof households headed by a Native American person \nare lower income.\nHouseholds with lower incomes constitute a larger \nshare of renters in less expensive markets where \nhomeownership is more attainable and rents are \nmore affordable. Among the 100 most populous \nmetros, lower-income households make up more \nthan 40 percent of renters in more affordable Southern \ncities as well as in deindustrialized Rust Belt cities like \nBuffalo, Toledo, and Cleveland. Additionally, renters \nwith lower incomes disproportionately live in counties \nin smaller metropolitan areas and rural communities, \nand are slightly more likely to live in counties with \npersistent poverty.\nRenting Benefits Mobile Populations\nOne benefit of renting compared to owning a home \nis the relative ease of moving. The lower transaction \ncosts involved in relocating into or out of a rental unit \nmake renting preferable for younger households as \nwell as those who are relatively mobile or looking for \nshorter-term living arrangements. Reflecting these \nbenefits, the renter mobility rate—the yearly share \nof renters who change residences—is much higher \nthan that of homeowners. About 16 percent of renters \nreport having moved in the past year, compared to just \n4 percent of homeowners.\nNearly a third \nof renters had \nhousehold \nincomes under \n$30,000 in 2022.\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n15\n\n\n\n--- Page 18 ---\nEven so, mobility rates among renters have continued \ntrending downward over the last decade. According \nto the Current Population Survey, 25 percent of renters \nmoved during the previous year in 2013, but the rate \ngradually dropped to 20 percent by 2019. It then fell \neven further to 16 percent in 2021 as the pandemic \nprompted record-high lease renewals. The mobility \nrate has held steady at 16 percent through 2023, \nreflecting tightening housing markets and continued \nhigh apartment retention rates.\nIn the event renters did choose to relocate, they often \nopted to remain local. In 2023, 61 percent of renter \nmoves were within the same county, and an additional \n17 percent stayed in state. The remaining moves were \neither from another state (15 percent) or from abroad \n(7 percent). While overall mobility rates have declined, \ninterstate movers have nonetheless continued to be \nan important source of rental demand. In 2022 alone, \nTexas, Florida, North Carolina, and Arizona each gained \nmore than 18,000 households from domestic migration, \nwhile New York, California, and New Jersey each lost \nmore than 20,000 households.\nTypically, renters move in pursuit of better housing, \nto form a new household, or to be closer to a new job \nor their family. Among those who moved in 2023, the \ntwo most common reasons were for a new job or to \nrelocate to a new or better home (14 percent each). \nThe share who moved for a new or better home in \n2023 was notably lower than in 2019, perhaps because \npeople made these moves earlier in the pandemic \nin response to the increased need for more space. \nAnother 11 percent of moves were for more afford­\nable housing, and 10 percent were due to new \nhousehold formation.\nThe Outlook\nAfter the pandemic-era highs and lows, rental demand \nappears to be stabilizing. The resumption of renter \nhousehold growth in 2023 after a dip earlier in the \npandemic is a positive sign for rental property owners. \nWhether this level of growth will continue remains to \nbe seen. Nevertheless, given the long-term increase \nin renter households, there is likely to be a relatively \nhigh number of renters for years to come.\nLikewise, the underlying age distribution of the US \npopulation also points to sustained rental demand \ngoing forward. A meaningful portion of the large millen­\nnial population is renting later in life than members \nof previous generations. Further, even as millennials \nturn to homeownership in greater numbers, Gen Z \nhas already taken over as the primary driver of rental \ndemand growth. At the same time, the aging of the \nbaby boomers into their 70s and 80s means that those \nwho wish to remain in their communities without the \nresponsibilities of homeownership may transition to \nrenting. Providing affordable, accessible rental options \nfor these older adults will help them to age with dignity \nand security.\nRenting is a preferable housing option for many indi­\nviduals. Units with amenities in desirable locations \nand single-family rentals are increasingly attractive \nto households with higher incomes. For some, these \noptions may provide a stepping stone to homeown­\nership. However, for others, renting is the only option. \nHouseholds that lack the financial resources to \nbecome homeowners continue to rely on the rental \nmarket as their sole source of housing. These house­\nholds are an equally important component of demand. \nEnsuring that they have adequate, affordable housing \nis an ongoing policy challenge.\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n16\n\n\n\n--- Page 19 ---\nRENTAL HOUSING \nSTOCK \nStrong multifamily housing production continues to shift rental stock composition toward larger buildings. At \nthe same time, the volume of low-rent units is falling, leaving financially vulnerable renters with fewer affordable \noptions. Restrictions on development further limit the availability of rentals in many suburban communities and \nexclude renters from some neighborhoods. Nationwide, the aging rental stock needs significant investment to \nimprove housing quality, accessibility, and resilience to climate-related hazards.\nLarge Buildings Are a Growing Share \nof the Rental Stock\nBetween 2010 and 2022, the total rental supply \nincreased by 4.3 million units to 48.1 million units. This \ngrowth was driven primarily by the construction of \nlarge multifamily buildings (Figure 12). During this \nperiod, the number of apartments in multifamily \nbuildings with 20 or more units grew by 3.3 million, \nto 12.3 million units. The supply in midsize buildings \nwith 5–19 units also increased, though by a modest \n292,000 apartments, to 10.6 million units. Rentals in \nsmall multifamily buildings with 2–4 units, a property \ntype that tends to be more affordable, increased by \njust 103,000, to 8.3 million units.\nCompared to 2010, the supply of single-family homes \nfor rent has grown by 649,000 homes, to 14.9 million in \n2022, although this is down from the peak of 16.1 million \nrecorded in 2016. Many of these homes converted from \nowner-occupancy to rental during the first half of this \nperiod, especially in the aftermath of the foreclosure \ncrisis. However, in the second half of this period, the \ntrend reversed. Beginning in 2016, the supply of single-\nfamily rentals declined every year as homes converted \nto owner-occupancy or were otherwise lost to building \ndemolitions and condemnations. Nevertheless, single-\nfamily homes represented nearly a third of the total \nstock in 2022.\n7\n8\n9\n10\n1 1\n12\n13\n14\n15\n16\n17\n2010\n2012\n2014\n2016\n2018\n2020\n2022\nSingle Family\n2-4 Units\n5-19 Units\n20 or More Units\nNotes: Rental units may be occupied, vacant for rent, or rented \nbut unoccupied. Single-family homes include attached and \ndetached units. Data for 2020 are based on 2019 and 2021 values \nbecause of pandemic data disruptions.  \nSource: JCHS tabulations of US Census Bureau, American \nCommunity Survey 1-Year Estimates.\nFigure 12\nLarger Buildings Account for Most of the Rental \nStock Growth\nNumber of Rental Units (Millions)\n03 \nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n17\n\n\n\n--- Page 20 ---\nThe disproportionate increase in units in larger multi­\nfamily buildings relative to other rental types has \nchanged the composition of the rental stock. Since \n2010, the share of rentals in large multifamily build­\nings has increased by 5 percentage points and are 25 \npercent of the rental stock as of 2022. Meanwhile, the \nsingle-family rental share dropped by 2 percentage \npoints. Likewise, the shares of rental units in midsize \nand small multifamily buildings each dropped by 1 \npercentage point. Midsize buildings with 5–19 units \naccounted for 22 percent of the rental stock and \nsmaller buildings with 2–4 units constituted 17 percent. \nThe share of manufactured housing, which totaled just \n2.0 million units in 2022, also declined by 1 percentage \npoint over the previous 12 years, to just 4 percent of \nrental units.\nThe shift in rental housing away from smaller prop­\nerties and toward apartments in larger buildings is \ndue mainly to the composition of new construction. \nBetween 2010 and 2022, annual completions of multi­\nfamily rentals grew from 125,000 to 342,000 units, with \n3.5 million units added in this period, according to \nthe Census Bureau Survey of Construction. A full 2.9 \nmillion were apartments in buildings with at least \n20 units, pushing up their share of multifamily rental \ncompletions from 79 percent to 90 percent between \n2010 and 2022.\nWhile annual completions of single-family rentals have \naccelerated rapidly in response to growing demand, \nsingle-family homes built as rentals remained a small \nshare of new construction. Completions of single-\nfamily rentals rose from 26,000 to 67,000 units annually \nbetween 2010 and 2022. In total, 518,000 new single-\nfamily homes built as rentals were completed in this \nperiod, representing 13 percent of new rental units.\nSupply of Low-Rent Units Is Dwindling \nThe supply of low-rent units continues to shrink. These \nunits rent for less than $600 a month—the maximum \namount affordable to a household earning $24,000 \nannually when applying the 30 percent of income \nstandard. In the last decade, the number of low-rent \nunits dropped by 2.1 million, including a loss of 230,000 \nfrom 2021 to 2022 alone. This left just 7.2 million units \nwith rents below $600 as of 2022 (Figure 13). Since 2012, \nthe market also lost an astounding 4.0 million units \nwith rents between $600 and $999. In total, the market \n0\n2\n4\n6\n8\n10\n12\n14\n16\n18\nUnder $600\n$2,000 and Over\nContract Rent\n2012\n2022\n$600-$999\n$1,000-$1,399\n$1,400-$1,999\nNotes: Rents are adjusted for inflation using the CPI-U Less Shelter. Units that are occupied but do not receive payment are excluded. \nContract rents exclude utility costs. \nSource: JCHS tabulations of US Census Bureau, American Community Survey 1-Year Estimates.\nFigure 13\nThe Stock of Low-Rent Units Is Shrinking\nNumber of Rental Units (Millions)\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n18\n\n\n\n--- Page 21 ---\nlost 6.1 million units renting for less than $1,000, the \nmaximum amount affordable to a household earning \n$40,000 per year. Various market forces have contrib­\nuted to these losses, including rent increases among \nexisting units, building condemnations and demoli­\ntions, and tenure conversions.\nDuring the same period, the supply of units renting \nfor between $1,000 and $1,399 increased by 400,000. \nThe market also gained 4.3 million units with rents \nbetween $1,400 and $1,999, and 4.1 million units renting \nfor $2,000 or more.\nThe declining supply of low-rent units, combined with a \nsteady stream of new construction targeting the high \nend of the market, has shifted the distribution of rents \nupward. In 2022, just 16 percent of units had contract \nrents below $600, down from 22 percent of the rental \nstock in 2012. Meanwhile, the share of units renting for \n$1,400 or more nearly doubled, from 21 percent to 38 \npercent of units.\nThe loss of low-rent units has been geographically \nwidespread, with decreases recorded in 47 states \nand the District of Columbia. Fully 42 states lost more \nthan 10 percent of their low-rent stock between 2012 \nand 2022, including 24 that lost more than 20 percent. \nAmong the hardest hit states were those previously \nconsidered more affordable that have seen swiftly \ngrowing rental demand, including Texas, North Caro­\nlina, and Georgia. Several Midwestern states also expe­\nrienced significant losses despite recording relatively \nslow rental demand, including Ohio, Michigan, and \nIndiana. In more expensive states already short on \nlow-rent units, the net decline extended much farther \nup the rent spectrum, with 16 states losing units at all \nrent levels up to $1,400.\nLow-rent units are an essential source of affordable \nhousing for households with lower and moderate \nincomes. In 2022, 60 percent of renter households \nliving in low-rent units earned less than $30,000 \nper year, including 36 percent with annual incomes \nbelow $15,000. For many renters at these income \nlevels, $600 a month is a stretch. Using the standard \nThe number of \nlow-rent units has \nfallen by 2.1 million \nin the last decade.\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n19\n\n\n\n--- Page 22 ---\n30 percent of income calculation, these households \ncan afford a monthly rent of no more than $750 and \n$375, respectively.\nAdditionally, low-rent units help house middle-income \nhouseholds that may also struggle to secure afford­\nable housing. In 2022, 28 percent of units renting for less \nthan $600 were occupied by middle-income house­\nholds earning between $30,000 and $75,000 annually. \nIncreasing the availability of units with lower rents and \npreserving the existing supply of these units is critical \nto ensuring that financially vulnerable households are \nable to secure housing they can afford.\nSupply Varies Across Geographies\nThe composition of the rental stock varies widely \nby region. In 2021, a third of rentals in the Northeast \nwere in large multifamily buildings, well above the \nWest (26 percent), Midwest (22 percent), or South (21 \npercent). The Northeast also had the largest propor­\ntion of rental units in small multifamily buildings, at 27 \npercent, compared to just 19 percent in the Midwest, \n15 percent in the West, and 14 percent in the South. \nConversely, the Northeast had the smallest proportion \nof single-family rentals, at 19 percent, while single-\nfamily homes were about a third of the rental stock \nin all other regions.\nRent levels likewise vary across regions, reflecting \ndifferences in the composition and age of the stock, \nhousehold incomes, and housing demand. High-cost \nrentals are most common in the West and Northeast. \nIn 2021, 45 percent of units in the West had rents of at \nleast $1,500, as did 34 percent of rentals in the North­\neast, well above the share in the South (19 percent) or \nthe Midwest (10 percent).\nThere are also notable differences in the rental stock \namong urban, suburban, and nonmetropolitan areas \n(Figure 14). In 2021, 40 percent of occupied rentals were \nin urban areas, 48 percent were in suburban areas, \n$600-$999\n$1,000-$1,249\n$1,250-$1,499\n$1,500 and Over\nUrban\nSuburban\nNonmetropolitan\nContract Rent\nUrban\nSuburban\nNonmetropolitan\nStructure Type\nUnder $600\nManufactured\n2-4 Units\n5-19 Units\n20 or More Units\nSingle Family\n0\n10\n20\n30\n40\n50\n60\n70\n80\n90\n100\nNotes: Only occupied rental units are depicted. Manufactured housing includes other structures such as boats and RVs. Contract \nrents exclude utility costs. Urban and suburban tracts fall within metropolitan statistical areas. Nonmetropolitan tracts fall outside of \nmetropolitan areas.\nSource: JCHS tabulations of US Census Bureau, 2021 American Community Survey 5-Year Estimates.\nFigure 14\nThe Rental Stock Varies Widely Across Markets, with Low-Rent Units More Common in  \nNonmetropolitan Areas\nShare of Rental Stock (Percent)\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n20\n\n\n\n--- Page 23 ---\nand 11 percent were in communities outside metro­\npolitan areas. In urban areas, over half (51 percent) of \nthe housing stock was rented, significantly more than \nin suburban (30 percent) and nonmetropolitan areas \n(28 percent). Nearly three-quarters of rentals in urban \nneighborhoods were multifamily units, compared to \n59 percent in suburban neighborhoods and 41 percent \nin neighborhoods outside metropolitan areas. Apart­\nments in large multifamily buildings with 20 or more \nunits were also far more common in urban communi­\nties, accounting for 31 percent of the rental stock there, \nwell above the shares in suburban (19 percent) and \nnonmetro (8 percent) areas.\nIn contrast, nonmetropolitan and suburban commu­\nnities have a much higher proportion of single-family \nand manufactured homes for rent. In 2021, about half \nof rental units outside metropolitan areas were single-\nfamily homes, compared to 36 percent in suburban \nareas and 26 percent in urban areas. Manufactured \nhousing accounted for 13 percent of all rentals in \nnonmetropolitan communities but was much less \ncommon in suburban areas (5 percent) and virtually \nabsent from urban areas (1 percent). In fact, while \nnonmetropolitan areas accounted for just 11 percent \nof all rental units, they contained a third of the nation’s \nmanufactured housing supply.\nRent levels also vary greatly across urban, suburban, \nand nonmetropolitan geographies. Urban and \nsuburban areas have significantly higher shares of \nunits renting for at least $1,500 (25 percent and 26 \npercent, respectively), compared to just 4 percent of \nrentals in communities outside metropolitan areas. \nNonmetropolitan areas tended to be priced lower, \nwith 53 percent of units renting for less than $600, \ncompared to just 15 percent of rentals in suburban \nareas and 17 percent in urban areas. In total, commu­\nnities outside metropolitan areas contain just over a \nquarter of the nation’s stock of units that rent for less \nthan $600. \nLocation of Rental Stock Contributes \nto Inequalities\nThe nation’s rental stock is unevenly distributed across \nneighborhoods, limiting where renters can live. In 34 \npercent of neighborhoods, less than 20 percent of the \nhousing stock is available to rent, resulting in commu­\nnities that are essentially rental deserts. Conversely, \nowner-occupied homes account for less than 20 \npercent of the stock in just 6 percent of neighborhoods.\nRental deserts tend to be located in suburban areas \nwhere restrictive land use policies make it difficult to \nbuild multifamily housing, which is predominantly \nrenter-occupied. In 2021, suburban neighborhoods \nconstituted 55 percent of census tracts nationally, \nbut 68 percent of neighborhoods where less than 20 \npercent of the stock is available to rent.\nSingle-family homes, which tend to be owner-occu­\npied, are much more common in these communi­\nties. In neighborhoods where less than 20 percent of \nhousing is rental, single-family homes accounted for \n85 percent of all housing in 2021, compared to just 17 \npercent of the housing stock in neighborhoods that are \nmore than 80 percent rentals. Large multifamily build­\nings with 20 or more units accounted for just 2 percent \nof the housing stock in rental deserts, compared to 42 \npercent of the units in neighborhoods with abundant \nrental housing.\nThe lack of rental options in many neighborhoods rein­\nforces inequities and contributes to socioeconomic \nsegregation. Communities with little rental housing \nhave higher median incomes, reflecting renters’ \ntypically lower annual incomes. In 2021, the median \nhousehold income in rental desert neighborhoods was \n$92,000, almost twice that of the $49,000 median in \nareas with robust rental options.\nFurther, the limited availability of rental housing in some \nneighborhoods constrains housing options for many \npeople of color. A long history of racially discriminatory \ngovernment policies and real estate practices has \nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n21\n\n\n",
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        "text": "--- Page 24 ---\nrestricted neighborhood choice and prevented many \nhouseholds of color from becoming homeowners. \nThese actions, along with discrimination in education \nand labor markets, have contributed to higher rent­\nership rates among Black and Hispanic households.\nThe legacy of these inequities is evident in the low \nshare of households of color in rental deserts. In 2021, \npeople of color headed just 24 percent of households \nin rental deserts, as compared to 66 percent of house­\nholds in neighborhoods where more than 80 percent \nof homes are rented. The share of households headed \nby a Hispanic person was three times higher in neigh­\nborhoods with abundant rental options than in rental \ndeserts (30 percent versus 10 percent), and the share \nheaded by a Black person was nearly four times higher \n(22 percent versus just 6 percent).\nThese patterns of residential segregation are difficult \nto undo in part because they are reinforced by various \nland use regulations. Single-family zoning and other \ndensity limitations restrict the development of multi­\nfamily buildings, effectively making it more challenging \nto add rental housing. Several states and communities \nhave recently enacted zoning changes to allow for \nmore types of housing in areas previously zoned exclu­\nsively for single-family homes. These zoning changes \ncould increase rental options in neighborhoods where \nfew exist, help expand the geographic options avail­\nable to renters, and better integrate communities.\nHousing Inadequacy Persists\nThe rental stock is older than at any other recorded \ntime. In 2021, the median age of renter-occupied\nhomes reached 44 years, up from 39 years a decade \nearlier and 34 years in 2001. Investment in the aging \nhousing stock is vital, given the persistence of \nsubstandard housing. Despite improvements in \nbuilding codes and construction standards, as well \nas upgrades and repairs to existing units, 3.9 million \nrenter households lived in homes that did not meet \nbasic standards for suitability and safety in 2021. This \nrepresents an overall increase of 350,000 households \nover the past two decades.\nThe rental stock is \nolder than it’s ever \nbeen at a median \nage of 44 years.\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n22\n\n\n\n--- Page 25 ---\nAccording to data from the most recent American \nHousing Survey, in 2021, 8.4 percent of renter house­\nholds lived in substandard housing with multiple prob­\nlems such as structural deficiencies, a lack of upkeep, \nor the inconsistent provision of basic features such \nas hot and cold running water, heat, and electricity. \nPhysical inadequacy from disrepair and structural \ndeterioration is much more common in older homes. \nOverall, 13 percent of units built before 1940 were clas­\nsified as physically inadequate in 2021, more than twice \nthe 6 percent share of newer units built between 2000 \nand 2021.\nGiven that substandard units tend to have low rents, \nhouseholds with lower incomes are more likely to \noccupy these homes (Figure 15). In 2021, 12 percent \nof renter households earning less than $15,000 lived \nin inadequate housing, double the 6 percent of \nrenters with incomes of $75,000 or more. While most \nsubsidized housing properties meet basic safety \nand suitability standards, severe underfunding of \n0\n2\n4\n6\n8\n10\n12\nBlack\nHispanic\nWhite\nAsian\nUnder\n$15,000\n$15,000-\n$29,999\n$30,000-\n$44,999\n$45,000-\n$74,999 \n$75,000\nand Over\nAll\nHouseholds\nRace/Ethnicity \nHousehold Income\nNotes: Housing inadequacy refers to a variety of structural deficiencies, such as large holes and leaks or the absence of basic features \nincluding plumbing, electricity, water, or heat. HUD classifies units as moderately or severely inadequate depending on the type and \nnumber of these physical problems. Black, Asian, and white householders are non-Hispanic. Hispanic householders may be of any race. \nSource: JCHS tabulations of US Department of Housing and Urban Development, 2021 American Housing Survey.\nFigure 15\nRenters with Lower Incomes and Those of Color Disproportionately Live in Inadequate Housing\nShare of Renters in Inadequate Housing (Percent)\nproject-based assistance programs has left 1 in 10 \nrenters living in public housing or HUD-assisted private \nmultifamily housing with inadequate conditions. \nDespite inspection standards, 11 percent of renters \nwith Housing Choice Vouchers lived in inadequate \nconditions in 2021.\nBlack and Hispanic households are more likely to live \nin inadequate housing, a product of long-standing \ndiscriminatory policies and practices that have often \nsteered households of color to neighborhoods with \nolder and less-adequate housing. In 2021, 10 percent \nof Black and Hispanic renter households lived in inad­\nequate housing, well above the shares for white (7 \npercent) and Asian households (6 percent). These \ndisparities persist even after accounting for differences \nin income. A HUD report also found that American \nIndian and Alaska Native households dispropor­\ntionately experience poor housing quality, including \nunits with structural problems, system deficiencies, \nand overcrowding.\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n23\n\n\n\n--- Page 26 ---\nEven among units that meet the criteria for phys­\nical adequacy, many have significant problems that \nimpact occupant health and safety. A 2023 study by \nthe Federal Reserve Bank of Philadelphia found that \nin 2022, 37 percent of renter-occupied units had at \nleast one critical home repair need, such as fixing a \ncracked foundation, replacing broken equipment, or \nremediating mold, and estimated the total cost of \naddressing these deficiencies at $51.5 billion.\nEven the structurally adequate stock does not typi­\ncally meet the needs of people with disabilities. In \n2019, 4 percent of renter households reported diffi­\nculties entering or navigating their homes, including 18 \npercent of renters age 80 and over, as reported in the \nAmerican Housing Survey. And nearly half of renters \nwith disabilities said their homes were minimally or \nnot at all accessible, according to a 2023 Freddie Mac \nsurvey. Given the aging of both the rental stock and \nthe nation’s population, there is an urgent and growing \nneed to repair or modify existing units to ensure habit­\nability, safety, and accessibility.\nExposure to Disasters Threatens the \nRental Stock\nEnvironmental hazards such as wildfires, flooding, \nearthquakes, and hurricanes increasingly jeopar­\ndize the health and safety of renters and threaten to \ndamage or destroy housing. About 41 percent of the \nnation’s occupied rental stock (18.2 million units) is \nlocated in areas exposed to substantial weather- and \nclimate-related threats as measured by expected \nannual economic losses for multiple hazards, \naccording to the Federal Emergency Management \nAgency’s National Risk Index.\nThese areas are geographically diverse, reflecting the \nvariety of acute and chronic environmental hazards \nthat impact every part of the country (Figure 16). Cali­\nfornia has the most rental units located in census tracts \nwith at least moderate expected annual economic \nlosses caused by hazards. There, 4.6 million units—77 \npercent of the state’s rental stock—are at risk of \ndamage or destruction, followed by Florida, with 2.4 \nmillion units (89 percent) at risk.\nNumber of Rental Units \nin High-Risk Counties\nUnder 2,000\n2,000–9,999\n10,000–19,999\n20,000 and Over (Up to 1.6 Million)\nNotes: High-risk areas have a relatively moderate, \nrelatively high, or very high expected annual loss \n(EAL) score. EAL represents the average economic \nloss in dollars resulting from natural hazards each \nyear. The number of units in high-risk counties is \naggregated from the tract level.\nSource: JCHS tabulations of Federal Emergency \nManagement Agency, July 2023 National Risk \nIndex EAL data, and US Census Bureau, 2021 \nAmerican Community Survey 5-Year Estimates.\nFigure 16\nMore Than 18 Million Rental Units Are Under Threat from Environmental Hazards\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n24\n\n\n\n--- Page 27 ---\nNationally, more than a third of units in small, midsize, \nand large multifamily buildings (35–40 percent) \nare located in census tracts with substantial annual \nlosses, as are 45 percent of single-family rentals \nand just over half of manufactured rentals. Because \nmanufactured housing units are the most likely to \nbe classified as physically inadequate, they may be \nespecially susceptible to damage or destruction from \ntheir hazard exposure.\nThe already limited supply of low-rent and feder­\nally subsidized units is also at risk. Indeed, 3.2 million \nunits with rents below $600 (38 percent) are in at-risk \nareas. An additional 1.2 million Low-Income Housing \nTax Credit units (40 percent) are at risk from envi­\nronmental hazards, along with 34 percent of proj­\nect-based HUD units. This includes 960,000 units that \nare public housing, Project-Based Section 8, affordable \nhousing for older adults, and supportive housing for \nhouseholders with disabilities. Also at risk are 200,000 \nunits (52 percent) subsidized by the US Department \nof Agriculture’s rural multifamily housing program. \nThe growing exposure to hazards will only compound \nthese units’ numerous preservation needs.\nNotably, newer rental units are much more likely to be \nvulnerable to weather- and climate-related hazards. \nNearly half of rentals built in 2000 or later are located \nin areas with substantial losses, double the 24 percent \nof rentals built before 1940. Still, those built before \n1940 have the highest rate of physical inadequacy of \nany rental units, so they may be more vulnerable to \ndamage caused by environmental hazards.\nAs a growing number of rental units are damaged by \nenvironmental hazards, the cost to repair and rebuild \nhomes will increase, as will the insurance costs in high-\nrisk areas. At the same time, the escalating frequency, \nseverity, and diversity of disasters, coupled with the \nmagnitude of their likely damages, will necessitate \ngreater investments in pre-disaster mitigation and \nclimate adaptation strategies for both properties and \nregions. Otherwise, the increasing incidence of costly \ndisasters will almost certainly render an increasing \nnumber of rental units uninhabitable, forcing resi­\ndents to relocate and threatening to further reduce \nthe supply of rental housing.\nThe Outlook\nWith more supply coming online across the country, the \nrental stock is likely to expand, though with a changing \ncomposition. A growing share of the rental stock is \nmore expensive units in larger buildings. New construc­\ntion is furthering this trend by increasingly targeting \nthe high end of the market. In contrast, the supply of \nunits in small multifamily buildings—which tend to \nhave lower median rents—remains largely unchanged.\nThe shifting composition, coupled with the high cost \nof new construction and the deep need at the lower \nend of the market, suggests that new market-rate \nsupply alone will do little to bring immediate relief to \nthose with lower incomes. For these households, the \nnumber of affordable options is declining as low-rent \nunits are demolished, converted to owner-occupancy, \nor repriced at higher rents.\nMoreover, the lack of diverse rental options in many \nsuburban communities constrains where households \ncan choose to live. Regulatory barriers restrict the \namount of multifamily housing that can be built in \nneighborhoods with few rental opportunities.\nAdditionally, the existing stock requires significant \ninvestment. The level of structural inadequacy has \nnot improved in decades, and critical repairs and \nreplacements are imperative to ensure that the units \nare of decent quality. Further, steps must be taken to \nmitigate the impact of climate-related hazards on \nlow-rent and subsidized units while reducing the loss of \nthe stock and preserving its affordability. Finally, there \nis an urgent need to make accessibility modifications \nin response to the nation’s rapidly aging population. \nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n25\n\n\n\n--- Page 28 ---\nRENTAL\nMARKETS \nA steady stream of new supply and stabilizing demand have cooled rental markets from their pandemic-induced \nfrenzy. As vacancy rates have risen from historic lows, rent growth has plummeted from its record-breaking \npace. While multifamily housing completions remain near historic highs, construction starts are slowing as \ninterest rates rise. The increasing costs of debt and equity have dampened multifamily performance and raised \nexpenses for apartment operators. Nevertheless, the relatively strong performance of multifamily properties \nover the longer term has attracted new investors to the rental market.\nRent Growth Cools as Vacancies Rise \nRobust new supply and stabilizing demand have \nbrought rent growth to a near standstill. Rents for \nprofessionally managed apartments grew just 0.4 \npercent annually in mid-2023. This is a dramatic turn­\naround from the prior year when apartment rents \nincreased by a record-breaking 15.3 percent year \nover year. The current pace is more than 3 percentage \npoints below the 3.6 percent pace averaged in the five \nyears leading up to the pandemic. \nRent growth slowed across property classes. For higher-\nquality Class A units, rent growth decelerated from a \nrecord-breaking 18.5 percent annual pace in early 2022 \nto just 0.8 percent in the third quarter of 2023. Similarly, \nrents for Class B and Class C apartments grew annu­\nally by just 0.1 percent and 0.7 percent, respectively, in \nthe third quarter of 2023—down from 16.1 percent and \n8.5 percent at the beginning of 2022.\nRents for single-family units also slowed, according to \nthe CoreLogic Single-Family Rent Index. In this market \nsegment, rents grew just 2.9 percent year over year \nin August 2023, significantly below the record-high \ngrowth of more than 14 percent in 2022 and similar \nto the pre-pandemic annual growth rate. Further, the \nConsumer Price Index for rent of primary residence, \nwhich covers the entire rental stock and is slow to \nregister changes, decelerated in mid-2023 from a \nfour-decade high of 8.8 percent in March 2023 to 7.2 \npercent in October 2023. \nThe slowdown in apartment rent growth was \ngeographically widespread. In the third quarter of 2023, \njust 1 percent of markets experienced rent growth of \nat least 10 percent annually, down from 50 percent of \nmarkets a year earlier. Instead, the majority of markets \n(61 percent) experienced only moderate rent growth \nunder 5 percent, as compared to just 4 percent of \nmarkets in the prior year. And whereas not a single \nmarket reported negative rent growth in mid-2022, \nrents declined in 32 percent of markets in mid-2023. \nThe areas with the fastest-growing rents in the third \nquarter of 2023 include many less expensive markets \nin the South, Midwest, and Northeast, such as Midland \n-Odessa, Madison, Champaign-Urbana, Trenton, and \nSpringfield, Massachusetts, where apartment rents \ngrew by at least 6 percent annually. In contrast, the \nbulk of the markets with declining rents was in the West \nand South, with year-over-year decreases of at least 4 \npercent in Boise, Phoenix, Austin, and Las Vegas. Simi­\nlarly, single-family rent growth was lowest or negative \nin metros in the West and South, including Las Vegas, \nMiami, and Austin. While slowing rent growth may help \n04\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n26\n\n\n\n--- Page 29 ---\nto address the affordability crisis, any relief will only be \nincremental, given that rents mostly remain elevated \ncompared to pre-pandemic levels. \nSome of the slowing rent growth is attributable to \nrising vacancy rates. Nationally, the rental vacancy \nrate reached 6.6 percent in the third quarter of 2023, \naccording to the Census Bureau’s Housing Vacancy \nSurvey. After falling to a pandemic low of 5.6 percent \nrecorded in late 2021, the recent vacancy rate was on \npar with the 6.9 percent rate averaged in the five years \npreceding the pandemic. \nRealPage data show an even more dramatic shift \nfor professionally managed apartments (Figure 17). \nThe vacancy rate for these rental units climbed to 5.5 \npercent in the third quarter of 2023, a sharp turnaround \nfrom early 2022, when surging demand brought the \nvacancy rate to a record low of just 2.5 percent in the \nfirst quarter. Since then, vacancy rates for professionally \nmanaged apartments have increased fastest in the \nSouth (up 3.5 percentage points, to 6.3 percent) and the \nWest (up 2.9 percentage points, to 5.2 percent). Nation­\nally, vacancies are somewhat higher in the most expen­\nsive Class A market segments since a large volume of \nnewly constructed units was added to the stock. \n0\n1\n2\n3\n4\n5\n6\n7\n2015\n2016\n2017\n2018\n2019\n2020\n2021\n2022\n2023\nUS\nNortheast\nMidwest\nSouth\nWest\nNote: Vacancy rates are four-quarter trailing averages for \nprofessionally managed apartments in buildings with five  \nor more units. \nSource: JCHS tabulations of RealPage data.\nFigure 17\nApartment Vacancy Rates Are Rising Every-\nwhere, Most Dramatically in the South\nApartment Vacancy Rate (Percent)\nHigh Interest Rates Constrain \nMultifamily Financing\nThe recent uptick in interest rates from their historic \nlows is cooling rental market activity. The interest rates \nfor fixed-rate multifamily loans are often anchored \nto the yield for 10-year Treasury notes. In the second \nquarter of 2023, the yield rate on these Treasuries was \n3.6 percent, nearly 3 percentage points above the rate \nrecorded in the first year of the pandemic and the \nhighest since the Great Recession. As a result, apart­\nment mortgage rates jumped to 5.5 percent for 7- and \n10-year fixed-rate loans in June 2023, according to \nMSCI—an increase of more than two percentage points \nfrom October 2021.\nRising interest rates increase the cost of the debt that \ninvestors and developers use to acquire and build \nmultifamily properties. At the same time, high Treasury \nyields increase the cost of equity, as investors require \nhigher returns to compete with lower-risk Treasury \nnotes. Consequently, it becomes harder to make proj­\nects financially feasible. To make the same project \nwork with an equal rate of return in a high interest rate \nenvironment, property developers and owners would \nneed more revenue to offset the increased capital \ncosts, meaning rents would need to be higher. \nLenders typically want properties to have a debt \nservice coverage ratio—the ratio of total monthly net \nincome to total monthly debt service payments—of at \nleast 1.2. However, the high cost of debt in 2023 has, all \nelse being equal, pushed down debt service coverage \nratios, making it more difficult for developers to qualify \nfor the same amount in loans. Knowing they would \nlikely be declined, potential borrowers have pulled \nback from even applying for financing. More than half \nof the banks surveyed by the Federal Reserve noted \nthat demand for multifamily loans has decreased. \nAdditionally, uncertainty about apartment perfor­\nmance and the broader economy has tightened \nmultifamily underwriting among nearly two-thirds \nof the surveyed banks. \nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n27\n\n\n\n--- Page 30 ---\nThe slowdown in borrowing and lending has been \nsubstantial. According to the Mortgage Bankers \nAssociation (MBA), multifamily mortgage orig­\ninations dropped 48 percent year over year in the \nsecond quarter of 2023. With declining originations, \nthe amount of multifamily debt outstanding increased \nby less than $30 billion in the second quarter to $2.03 \ntrillion, the weakest second-quarter showing in four \nyears (Figure 18). \nNevertheless, the sources of multifamily lending \nhave remained relatively stable. The government-\nsponsored entities Fannie Mae and Freddie Mac \ncontinued to hold nearly half of all multifamily mort­\ngage debt and posted the largest quarterly gain of any \ninvestor group in mid-2023. Banks and thrifts increased \ntheir holdings at about half the rate of Fannie Mae and \nFreddie Mac but still held 30 percent of multifamily \nmortgage debt. Meanwhile, mortgage debt held in \ncommercial mortgage-backed securities (CMBS) \nmade up just 3 percent of the market. \n0\n10\n20\n30\n40\n50\n60\n2015\n2016\n2017\n2018\n2019\n2020\n2021\n2022\n2023\nQuarterly Change\nAverage Change (4-Quarter Trailing)\nSource: JCHS tabulations of Mortgage Bankers Association data.\nFigure 18\nMultifamily Mortgage Flows Are Slowing\nMultifamily Mortgage Debt Outstanding (Billions of Dollars)\nMultifamily Starts Slow as \nCompletions Remain High\nMultifamily construction is slowing in the face of soft­\nening rent growth and rising vacancy and interest \nrates. After averaging 536,000 units in the first six \nmonths of 2023, multifamily starts slowed to a season­\nally adjusted annual rate of 402,000 units in October \n2023. Though this marked a 30 percent decline from \nthe pace one year earlier, starts are decreasing from \nextremely high levels and remain relatively robust. \nWhile multifamily starts are cooling, the single-family \nbuilt-for-rent sector has remained strong. A small \nshare of new single-family construction is built specif­\nically for the rental market. However, the number has \ngrown steadily over the last decade, with an espe­\ncially large uptick during the pandemic. In 2022, 69,000 \nsingle-family rental homes were started, a 77 percent \nincrease over 2019. In the third quarter of 2023, single-\nfamily rental starts hit a new record high with an annual \nrate of 70,000 homes. \nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n28\n\n\n\n--- Page 31 ---\nMultifamily units already under way also continue to \ncome online at historically high numbers (Figure 19). \nOn a seasonally adjusted annualized basis, 436,000 \nmultifamily units were completed in the third quarter \nof 2023, up 30 percent from pre-pandemic levels. This \nhas helped to maintain the steady flow of comple­\ntions despite the slowdown in starts. On a seasonally \nadjusted basis, the number of multifamily units under \nconstruction reached a record high of 1.0 million units \nin July 2023 that continued through October 2023. \nThough the slowdown in multifamily starts could lead \nto supply challenges in the coming years, the huge \npipeline of units currently under construction has the \npotential to ease rents in the near term. Research \nby RealPage suggests that new supply puts down­\nward pressure on rent growth in markets where \nnew units are added. In several geographies where \nnew supply increased at a rate above the national \naverage in 2023, rent growth notably cooled. Apart­\nment absorption—the difference between the number \nof households moving in and the number moving \nout—increased in mid-2023, which suggests that new \nsupply is accommodating new households while still \nallowing rents to moderate. \n0\n100\n200\n300\n400\n500\n600\n700\n800\n900\n1,000\n1982\n1984\n1986\n1988\n1990\n1992\n1994\n1996\n1998\n2000\n2002\n2004\n2006\n2008\n2010\n2012\n2014\n2016\n2018\n2020\n2022\nStarted\nUnder Construction\nCompleted\nNote: Data for 2023 represent the seasonally adjusted year-to-date average through October.\nSource: JCHS tabulations of US Census Bureau, New Residential Construction data. \nFigure 19\nCompletions Remain High and a Record Number of Units Are Under Construction\nMultifamily Units (Thousands)\nConstruction Delays and Costs\nAre Increasing\nWhile there is a healthy level of new supply under \nconstruction, the question of when it will come online \nremains unanswered as extended construction time­\nlines become increasingly common. The average \nnumber of months from start to completion for multi­\nfamily buildings reached 17.0 in 2022, up from 15.4 in \n2021 and 10.8 in 2012. Between 2021 and 2022, the time \nto complete single-family homes increased from 7.2 to \n8.3 months. A survey of construction and development \nfirms conducted by the National Multifamily Housing \nCouncil in September 2023 found that 88 percent of \nrespondents reported construction delays.\nSuch interruptions can add to the cost of new devel­\nopment, as do the rising costs of labor and materials. \nIn the second quarter of 2023, the employment cost \nindex for private industry construction workers was \nup 5 percent from the prior year and 14 percent since \nthe start of the pandemic. The price of all inputs to \nnew residential construction, excluding capital invest­\nment, labor, and imports, also increased, up 35 percent \nsince March 2020—more than triple the growth rate in \nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n29\n\n\n\n--- Page 32 ---\nthe equivalent period before the pandemic. The cost \nof ready-mix concrete, lumber, and brick and clay \nstructural tile each rose by at least 25 percent after \nthe pandemic, with even steeper price increases for \ngypsum (41 percent) and plastic construction products \n(35 percent). \nIn response to both rising costs and the growing \ndemand from higher-income renters, new rental \nunits increasingly target the high end of the market. \nConstruction remains highly concentrated in large \nmetros, where land is most expensive. The NAHB Home \nBuilding Geography Index indicates that 69 percent of \nmultifamily permitting in the second quarter of 2023 \nwas in large metro areas. Reflecting these trends, \nasking rents for new units continue to climb. In the \nsecond quarter of 2023, the median asking rent for \nnew units was $1,760, up 39 percent from the second \nquarter of 2014, according to the Survey of Market \nAbsorption. Between 2015 and 2022, the share of newly \ncompleted units with asking rents of at least $2,050 \nnearly doubled, to 37 percent. In the same period, the \nshare of units with asking rents below $1,050 declined \nby two-thirds, to just 7 percent. This shift in new \nconstruction toward higher-cost apartments means \nmany units are unaffordable to households with low \nand moderate incomes. Whether this new supply will \nimprove affordability for these households in the longer \nterm remains to be seen.\nProperty Performance Weakens\nApartment operators’ cash flow has slowed, not \nonly because of decelerating rent growth but also \nbecause of increased operating costs and insurance \npremiums. According to Yardi Matrix, national total \noperating expenses for multifamily properties rose \nby 9.3 percent in the 12 months ending in June 2023. \nAdditionally, Trepp reported that property insurance \ncosts increased 13.6 percent annually for multifamily \nproperties in large metro areas in 2022. Consequently, \nnet operating incomes for apartments grew by just 3.5 \npercent annually in the third quarter of 2023, according \nto data from the National Council of Real Estate Invest­\nment Fiduciaries. This was a substantial deceleration \nfrom the pandemic high of 24.8 percent in late 2021 \nand put the pace of net operating income growth well \nbelow the 5.3 percent annual rate averaged in the five \nyears preceding the pandemic.\nAgainst this backdrop, apartment capitalization \nrates—the net operating income divided by the prop­\nerty price—have gradually risen. According to Moody’s \nAnalytics, cap rates fell through 2022 before rising by \n0.9 percentage points over the first three quarters of \n2023 to 5.8 percent. With the high interest rates on \n10-year Treasuries, the cap rate spread was just 1.6 \npercentage points, considerably lower than the 3.5 \npercentage point spread averaged between 2015 \nand 2019. Multifamily properties have thus become \na somewhat less attractive investment than before \nthe pandemic. \nRising cap rates are pushing apartment property \nprices down. According to Real Capital Analytics data, \napartment prices fell year over year at the beginning \nof 2023 for the first time since 2010 and were down 13 \npercent annually by the third quarter (Figure 20). This \nwas a substantial turnaround from the peak 23 percent \nprice growth posted at the beginning of 2022. \nAlong with apartment prices, transaction volumes \ncooled in 2023 as potential buyers and sellers paused \namid uncertainty about property performance and \nrising interest rates. According to MSCI, apartment \nsales transaction volumes declined by 72 percent \nin mid-2023 from the prior year. The 2023 second-\nquarter volume was less than 25 percent of the $165 \nbillion peak volume reached at the end of 2021, and \napproximately half of the $42 billion averaged quar­\nterly between 2015 and 2019. \nRisk of Delinquencies Grows\nAs net operating income growth slows, the risk of \ndelinquencies is increasing. So far, the composition \nof multifamily financing and the pre-pandemic period \nof rapidly accruing equity have staved off widespread \ndefaults. Currently, the most at-risk properties are \nthose with shorter-term loans taken out in the last two \nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n30\n\n\n\n--- Page 33 ---\n0\n100\n200\n300\n-15\n-10\n-5\n0\n5\n10\n15\n20\n25\n30\n2015\n2016\n2017\n2018\n2019\n2020\n2021\n2022\n2023\nChange in Apartment Prices\nIndexed Apartment Prices (Right Scale)\nNotes: Apartment prices are indexed to January 2015. Indexed values represent cumulative percent change.\nSource: JCHS tabulations of Real Capital Analytics, Commercial Property Price Indexes.\nFigure 20\nApartment Property Prices Have Fallen from Record Highs\nYear-over-Year Change (Percent)\t\nIndex Value\nyears that leave borrowers little chance to build equity \nbefore the loan matures. These loans are more likely \nto be held by banks, by investor-driven lenders, or in \nCMBS. The 30-day delinquency rate for CMBS loans has \nmoved upward for three consecutive quarters, hitting \n3.8 percent in the second quarter of 2023, according to \nMBA. However, CMBS are a small share of all multifamily \nloans. Further, the most recent delinquency rate is only \nslightly higher than the pre-pandemic average. Much \nof the increase has been driven by other commercial \nproperty types, such as retail, hotels, and offices. \nLonger-term loans that have fewer near-term matur­\nities make up the largest share of multifamily loans. The \n60-day delinquency rates for loans held by Fannie Mae \nand Freddie Mac rose slightly in the second quarter \nof 2023 to 0.37 percent and 0.21 percent, respectively. \nStill, delinquencies remain low. Commercial and multi­\nfamily loans by banks and thrifts followed the same \ntrend, with a 90-day noncurrent rate of 0.67 percent \nin the second quarter of 2023, up from 0.56 percent in \nthe first quarter of 2022. While increasing, these delin­\nquency rates nonetheless remain much lower than \nthe 4 percent rate recorded in the years following the \n2008 housing market crash. \nIn the event that slowing returns do lead to a greater \nuptick in delinquencies, new opportunities may \nemerge for potential property buyers to acquire a \nbuilding at a more favorable price, in turn freeing up \ncapital that they can then invest in the apartments. \nMeanwhile, property owners facing financial distress \nmight otherwise cut back on maintenance and repair, \nto the detriment of renters.\nOwnership of Rental Properties Shifts\nDespite the slowdown in rent growth and low cap rate \nspread, rental housing remains a popular investment \noption, offering a relatively good return compared to \nother commercial real estate asset classes. Although \ninvestor activity has lessened in the short term, the \nstrong and sustained performance of multifamily \nproperties over the past two decades has attracted \nnew investors. Most rental properties are still owned \nby individuals. But the healthy track record of return \non rental investment has also encouraged the profes­\nsionalization of smaller landlords, who are increasingly \nforming limited liability partnerships (LLPs) and limited \nliability companies (LLCs). \nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n31\n\n\n",
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        "text": "--- Page 34 ---\nThe share of rental properties owned by nonindividual \ninvestors, including LLPs, LLCs, real estate corpora­\ntions, and similar entities, keeps growing. Between 2001 \nand 2021, these investors increased their ownership \nshare by 9 percentage points, to 27 percent of rental \nproperties, according to the Rental Housing Finance \nSurvey (Figure 21). \nThe growth in ownership by nonindividual investors \nhas been especially swift among small multifamily \nproperties, for which these investors have historically \nbeen absent. Between 2001 and 2021, the share of 2- \nto 4-unit multifamily properties owned by nonindi­\nvidual investors increased by 17 percentage points, to \n32 percent. During the same period, the share of 5- to \n24-unit properties owned by nonindividual investors \nnearly doubled, to 67 percent. Among large rental \nproperties, nonindividual ownership shares are signifi­\ncantly higher. Nonindividual ownership of rental prop­\nerties with at least 50 units increased by 6 percentage \npoints since 2001, to 93 percent, and by 17 percentage \npoints, to 83 percent ownership of properties with 25 \nto 49 units. \nWhile nonindividual investors are somewhat less \nactive in the single-family rental market, they have \ngained market share here, too. Over the last two \ndecades, their ownership of single-family rentals \nincreased by 8 percentage points, to 25 percent. The \nscale at which these investors operate may affect \ntheir strategies. Larger institutional investors tend to \npurchase newer and bigger single-family rentals in \nareas with fast-growing populations and rapid rent \ngrowth. By comparison, smaller institutional investors \nare more likely to purchase smaller, older, and less \nexpensive properties. \nEven as the share of single-family rental homes owned \nby nonindividual investors has grown, overall investor \nactivity in this market has recently declined. This slow­\ndown is a response to both the current interest rate \nenvironment and uncertainty about rental property \nperformance, prompting some investors to opt for \nother asset classes. Redfin data show that single-\nfamily home purchases by institutions or businesses \nfell 30 percent annually in the third quarter of 2023. This \nis the largest third quarter decline since 2016, aside \nfrom the first quarter of 2023, when activity dropped \neven more sharply. Whether the presence of inves­\ntors in the single-family rental market will continue to \ngrow depends largely on the availability of homes to \npurchase, the interest rate environment, the strength \nof other investment returns, and the steadiness of the \ndemand for rental housing.\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n32\n0\n10\n20\n30\n40\n50\n60\n70\n80\n90\n100\n1 Unit\n2-4 Units\n5-24 Units\n25-49 Units\n50 Units or More\nTotal\nNumber of Units in Property\n2001\n2021\nNote: Nonindividual investors include partnerships, trustees for estate, real estate corporations, real estate investment trusts, nonprofit \norganizations, and other entities. \nSource: JCHS tabulations of US Census Bureau, Rental Housing Finance Surveys.\nFigure 21\nNonindividual Investors Own a Growing Share of Rental Properties\nShare of Properties Owned by Nonindividual Investors (Percent)\n\n\n\n--- Page 35 ---\nRising operating \nand insurance costs \nwill challenge rental \nhousing providers.\nThe Outlook\nWith demand stabilizing and a large volume of new \napartments coming online, rent growth will likely \nremain slower than the frenzied pace of the early \npandemic years, helping to cool overall inflation and \nrelieve some of the pressure on household budgets. \nThe robust multifamily construction pipeline may \nfurther moderate rent growth as new units hit the \nmarket. Even so, asking rents will likely remain above \npre-pandemic levels. And the new supply will continue \nto target the high end of the market as construction \ncosts rise. As a result, the forthcoming units will do \nlittle to solve the immediate affordability needs of \nlower-income households.\nAdditionally, high interest rates present a considerable \nchallenge for the apartment industry. As the costs of \ndebt and equity rise, ensuring that deals are profitable \nhas become increasingly difficult. New construction \nand property transactions have shown signs of slowing \nas developers and buyers wait for greater economic \ncertainty and a more favorable financing environment. \nThese dynamics are likely to persist, given the expec­\ntation that interest rates will remain high for at least \nthe near term. If construction continues to slow and \nthe supply once again constricts relative to demand, \nthe affordability gains achieved at the high end of the \nrental market could be lost. \nIncreased operating and insurance costs will also \ncontinue to challenge housing providers, especially \nthose that are small scale or operate subsidized apart­\nments and smaller rental properties. In the face of \nfalling returns, housing providers may be less able to \nafford urgently needed repairs to the aging stock and \npreserve low-rent and assisted units. \nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n33\n\n\n\n--- Page 36 ---\nRENTAL \nAFFORDABILITY\nThe number of renters living in unaffordable housing has reached an all-time high and includes households \nacross the income spectrum and around the country. The growing shortage of units affordable to renters with \nthe lowest incomes is only worsening the affordability crisis. Though rent increases have leveled relative to \nthe pandemic spike, rents remain elevated and are straining household balance sheets. Inflation has further \nchallenged renters. Many lower-income households are struggling to cover basic needs and are confronting \ndifficult trade-offs that threaten their financial stability and overall well-being. \nCost Burdens Have Hit \nUnprecedented Heights\nCost burdens have reached record highs, fueled by \nrapidly rising rents during the pandemic. In 2022, the \nnumber of renter households spending more than \n30 percent of income on rent and utilities reached \n22.4 million, up from 20.4 million in 2019. Alarmingly, \nthe number of severely cost-burdened renter house­\nholds—those spending more than half of their income \non housing and utilities—also hit an all-time high of \n12.1 million in 2022, a full 1.5 million households above \npre-pandemic levels. \nThese recent increases stand in stark contrast to the \nmodest declines in cost burdens recorded before \nthe pandemic. Between 2014 and 2019, the number \nof cost-burdened renter households fell by about \n883,000, stemming from a substantial decrease \nin severe burdens. However, in the aftermath of the \npandemic surge, the record-high number of cost-bur­\ndened households in 2022 exceeded the 2014 pre-pan­\ndemic peak by nearly 1.1 million and marked a 7.6 million \nincrease over the low posted in 2001.\nNot only has the number of cost-burdened renters \ngrown, so has their share of the total renter popu­\nlation. In 2022, half of renter households were cost \nburdened, up 3.2 percentage points since 2019 and \n9.0 percentage points since 2001. Likewise, the share \nof severely burdened renter households rose quickly \nduring this period, from 24 percent in 2019 to 27 percent \nin 2022, 6.3 percentage points above the 2001 low. \nCost Burdens Are Climbing the \nIncome Scale\nRenter households at all income levels have expe­\nrienced rising cost-burden rates over the last two \ndecades (Figure 22). The pandemic accelerated this \ntrend. In recent years, cost-burden rates hit record \nhighs across all income groups. Middle-income renters \nhave especially felt the pain of increasing housing \ncosts. Just over two-thirds (67 percent) of house­\nholds earning $30,000 to $44,999 per year were cost \nburdened in 2022, an increase of 2.6 percentage points \nfrom 2019 and a shocking 15.1 percentage points above \n2001 levels. \n05 \nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n34\n\n\n\n--- Page 37 ---\n0\n10\n20\n30\n40\n50\n60\n70\n80\n90\n2001\n2019\n2022\n2001\n2019\n2022\n2001\n2019\n2022\n2001\n2019\n2022\n2001\n2019\n2022\nHousehold Income\nAll Renter Households\n$75,000 and Over\n$45,000-$74,999\n$30,000-$44,999\nUnder $30,000\nSeverely Cost Burdened\nModerately Cost Burdened\nNotes: Household incomes are adjusted for inflation using the CPI-U for All Items. Moderately (severely) cost-burdened households \nspend 30–50% (more than 50%) of income on rent and utilities. Households with zero or negative income are assumed to have severe \nburdens, while households that are not required to pay rent are assumed to be unburdened. \nSource: JCHS tabulations of US Census Bureau, American Community Survey 1-Year Estimates.\nFigure 22\nCost Burdens Continued to Increase Across Incomes During the Pandemic\nShare of Renter Households (Percent)\nRenter households with annual incomes of $45,000 \nto $74,999 have seen the fastest growth in their \nburden rates, both over the longer term and during \nthe pandemic. Indeed, 41 percent of renter households \nin this income category were burdened in 2022, a \n5.4 percentage point increase since the start of the \npandemic, nearly doubling their 2001 rate. \nEven many renter households earning at least $75,000 \nannually have felt increased financial strain. Cost-\nburden rates for this income bracket have risen 2.2 \npercentage points since the start of the pandemic and \n6.4 percentage points over the longer two-decade \nsweep. Still, cost-burden rates for this group remain \nrelatively low at just 11 percent. \nMost concerning is the rapid increase in cost burdens \namong lower-income renter households, a group that \nalready had a high burden rate. The share of cost-bur­\ndened renter households earning less than $30,000 \nannually rose 1.5 percentage points from 2019 to 2022. \nWhile this increase is notable for any group, these \nrenters have consistently grappled with widespread \nand persistent housing hardships. From 2001 to 2019, \nthe cost-burden rate among renter households with \nlower incomes hovered between 77 and 82 percent. \nIn 2022, 83 percent of these households were cost \nburdened, with the majority (65 percent) experiencing \nsevere burdens, marking yet another all-time high. The \nnew rental stock is unlikely to bring immediate relief \nto these households because the bulk of these units \ncharges high rents. \nDisparities in Cost Burdens Persist\nWhile overall cost-burden rates are high, some demo­\ngraphic groups experience higher rates than others. \nLong-standing discrimination in housing, employment, \nand education has contributed to disproportionately \nhigh cost-burden rates for renter households headed \nby a Black, Hispanic, or multiracial person. In 2022, \nmore than half of Black (57 percent), Hispanic (54 \npercent), and multiracial (50 percent) households \nwere cost burdened, while rates were lower for white \n(45 percent), Asian (44 percent), and Native American \n(44 percent) households. \nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n35\n\n\n\n--- Page 38 ---\nEven accounting for income, households headed \nby a white person were more likely to find afford­\nable housing than those headed by most people of \ncolor. Among households with annual incomes under \n$30,000, cost-burden rates are highest for those \nheaded by a Hispanic (87 percent), Asian (86 percent), \nBlack (85 percent), or multiracial (84 percent) person, \nas compared to their white counterparts (80 percent). \nOnly lower-income households headed by a Native \nAmerican person fared better than white renter house­\nholds, with a cost-burden rate of 72 percent, though \nthese households face other housing challenges, \nincluding inadequate conditions and overcrowding.\nCost burdens also vary by age and are most common \namong the youngest and oldest renters, many of \nwhom have lower incomes than individuals in their \nprime earning years. In 2022, a stunning 61 percent \nof renter households headed by someone under age \n25 were cost burdened, including 37 percent with \nsevere burdens. Unsurprisingly, the cost-burden rate \ndropped substantially for renter households in their \nprime earning years, to about 45 percent for those \nheaded by someone aged 25–54. Still, even among \nthis subset, nearly a quarter are severely burdened. \nThe rate then begins to rise again, increasing slightly \nto 49 percent for households headed by someone \naged 55–64, including 28 percent with severe burdens, \nand continues upward. Fully 57 percent of renter \nhouseholds headed by someone age 65 and over \nwere cost burdened, with 34 percent experiencing \nsevere burdens. \nAcross all age groups, cost-burden rates are higher \namong renters with disabilities, as workplace chal­\nlenges can limit employment options and earnings. \nIn fact, 60 percent of renter households headed by \nsomeone with a disability were cost burdened in 2022, \na whopping 13 percentage points higher than their \ncounterparts who did not have a disability. The finan­\ncial burden is especially significant for young adult \nrenters with disabilities. Among those under age 25, \ntwo-thirds were cost burdened.\nEven many fully employed households struggle \nwith housing costs. Just over a third—8.0 million—of \nthe renter households headed by a full-time, year-\nround worker were cost burdened in 2022 (Figure 23). \n0\n10\n20\n30\n40\n50\n60\nPersonal\nCare\nFood\nPreparation\nHealthcare\nSupport\nSales\nConstruction\nEducation\nSocial\nService\nHealthcare\nPractitioner\nBusiness\nAll\nOccupations\nOccupation Types\nNotes: Fully employed householders reported working at least 35 hours per week for at least 50 weeks of the previous year. All \noccupations includes households in occupations not shown. Cost-burdened households spend more than 30% of income on rent and \nutilities. Households with zero or negative income are assumed to be burdened, while households that are not required to pay rent are \nassumed to be unburdened.\nSource: JCHS tabulations of US Census Bureau, 2022 American Community Survey 1-Year Estimates.\nFigure 23\nFully Employed Renters in a Range of Occupations Are Cost Burdened\nShare of Fully Employed Renters with Cost Burdens (Percent)\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n36\n\n\n\n--- Page 39 ---\nRenters working in personal care (including child­\ncare workers, fitness trainers, and hairstylists) or in \nfood preparation occupations were especially likely \nto spend an outsize portion of their income on rent. \nMore than half of renter householders working full time \nin these occupations were cost burdened, including \nabout a quarter who were severely burdened. \nOf course, occupations and earnings are related to \neducation, a dynamic reflected in cost-burden rates \nas well. In 2022, the burden share among renter house­\nholds headed by someone with at least a college \ndegree was 39 percent—more than 19 percentage \npoints lower than the 59 percent of cost-burdened \nhouseholds headed by someone who lacked either a \nhigh school diploma or a GED.\nDifferences in cost-burden rates are also influenced by \nboth the number of potential earners in a household \nand the amount of space the household requires. With \njust one earner and the need for more bedrooms to \naccommodate children, single-parent renter house­\nholds had the highest cost-burden rate in 2022 at 62 \npercent. Because so many renter households consist \nof just one individual, single-person households \naccounted for nearly half of all cost-burdened renters. \nDespite the need for less space, 58 percent of single-\nperson households were cost burdened. Meanwhile, \na third of renters who were married without kids were \nburdened by housing costs, making this household \ntype most likely to live in affordable housing.\nAffordability Is Worsening Across \nthe Country\nGiven the enormous number of renters struggling to \nafford housing, it is perhaps unsurprising that cost-\nburden rates are high across the country (Figure 24). \nIn some places, this is due to high rents. In others, \nit is a function of low incomes. For example, in the \nMidwest and the South, where median rents are \nlowest, cost-burden rates are still 46 percent and 50 \npercent, respectively, because median incomes are \nalso lower. Though renters in the Northeast and West \nhave higher median incomes, the cost-burden rates \nin these regions are similarly elevated at 50 and 52 \npercent because of high housing costs.\nShare of Renters with \nCost Burdens (Percent)\n37.0–39.9\n40.0-44.9\n45.0-49.9\n50.0–57.9\nNotes: Cost-burdened households spend \nmore than 30% of income on rent and \nutilities. Households with zero or negative \nincome are assumed to be burdened, while \nhouseholds that are not required to pay rent \nare assumed to be unburdened. \nSource: JCHS tabulations of US Census \nBureau, 2022 American Community Survey \n1-Year Estimates.\nFigure 24\nMore Than a Third of Renters Are Cost Burdened in Every State in the Country\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n37\n\n\n\n--- Page 40 ---\nThese same patterns emerge when cost burdens \nare examined by state. For instance, the cost-burden \nrate was 51 percent in both Louisiana and New Jersey \nin 2022, despite the states’ vastly different median \nincomes and rents. Florida, Hawaii, and Nevada \ntopped the list of the most unaffordable states, with \ncost-burden rates exceeding 55 percent. But, notably, \neven in the most affordable states, more than a third \nof renter households were cost burdened, and afford­\nability has worsened in all but seven states since the \nstart of the pandemic. \nThough renters are cost burdened in all types of \ncommunities across the country, shares are highest \nin the largest metros, where rents tend to be higher. \nMore than half (51 percent) of renter households living \nin the 56 metros with populations over 1 million were \nburdened by housing costs in 2022, with the highest \nrates in Miami, Honolulu, and Orlando. Since 2019, cost-\nburden rates in large metros have risen 3.5 percentage \npoints, increasing in all but one of the 56 large metros. \nConversely, places with smaller populations are rela­\ntively more affordable. Just under half of renters (49 \npercent) in midsize metros with populations between a \nquarter million and 1 million were cost burdened in 2022. \nIn these geographies, cost-burden rates increased by \n2.9 percentage points since the start of the pandemic. \nThe cost-burden share was slightly lower (45 percent) \nin small metros with populations under 250,000, where \nrates have risen by 2.6 percentage points during the \nsame period. Rural areas were the most affordable, \nwith 40 percent of renter households experiencing \ncost burdens, a 1.7 percentage point increase over \npre-pandemic levels. \nAlarmingly, most lower-income renter households \nstruggle to find housing they can afford in any commu­\nnity. Renters with the lowest incomes—those in the \nbottom fifth of the income distribution for a given \nmetropolitan area or for a state’s rural areas—expe­\nrience high cost-burden rates even in less expen­\nsive areas. In rural communities where cost-burden \nrates were lowest, 72 percent of these households \nwere burdened, with nearly half experiencing severe \nburdens. The share of lowest-income renters strug­\ngling with cost burdens increased with population size, \nreaching 86 percent in large metros. \nAffordable Supply Is Scarce\nA significant driver of the record-high cost-burden \nlevels is the large and increasing dearth of rental units \naffordable to households with the lowest incomes. \nAccording to HUD’s Worst Case Housing Needs: 2023 \nReport to Congress, there are 61 affordable units for \nevery 100 renter households that earn no more than \n30 percent of area median income. Of these units, \n40 percent were occupied by a household with an \nannual income above 30 percent of the area median, \nreducing the number of units available and afford­\nable to the most financially vulnerable to just 36 per \n100 households. \nNationally, the severe shortage of units both afford­\nable and available to households with extremely low \nincomes has only worsened over the last two decades. \nFrom 2001 to 2021, the number of extremely low-in­\ncome households increased by 3.6 million. Yet the \nrelevant supply rose by just 677,000 units during the \nsame period. As a result, the total shortfall in units \naffordable and available to these households rose \nfrom 4.9 million in 2001 to a record-high 7.8 million units \nby 2021. The pandemic further accelerated unit losses \nas the number of extremely low-income households \nclimbed, raising the total deficit by 823,000 units in \njust two years.\nThe affordable supply shortage is largest in central \ncities and high-density suburbs. In 2021, just 35 units \nin central cities and 30 units in high-density suburbs \nwere affordable and available for every 100 renters \nwith extremely low incomes. Low-density suburbs \nwere only slightly more affordable, with 43 units per 100 \nextremely low-income renter households. In contrast, \nrural communities had 54 units available for every \n100 renter households with extremely low incomes. \nHowever, the larger supply of affordable and avail­\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n38\n\n\n\n--- Page 41 ---\nable units in rural areas is offset somewhat by higher \nrates of physical inadequacy among rural rental units. \nExcluding inadequate housing, only 44 rentals were \naffordable and available for every 100 rural renters \nwith extremely low incomes.\nRising Housing Costs Are Consuming \nHousehold Incomes\nOver the last two decades, housing cost increases \nhave outpaced income gains for renters, straining \nhousehold balance sheets. Though median rents \nhave risen 21 percent in inflation-adjusted terms since \n2001, median annual income has risen just 2 percent \nduring the same period. Consequently, renters’ median \nresidual income—the amount of money available each \nmonth after paying for rent and utilities—was $2,600 \nin 2022, down 4 percent from 2001.\nRenters with lower incomes have been particularly \nhard-hit by rising housing costs. Residual incomes for \nthose making less than $30,000 dropped to an all-time \nlow of $310 per month in 2022, 47 percent below the \n2001 peak (Figure 25). Among these lower-income \nrenters, those with cost burdens fared even worse, with \na median residual income of just $170. \nThe high cost of rent has also diminished spending \npower for renters making $30,000 to $74,999 annually. \nSuch households had a median residual income of \n$2,700 each month, down 10 percent over two decades. \nIn contrast, residual incomes increased slightly for \nrenters earning at least $75,000 per year, consistent \nwith the nation’s widening income inequality. For these \nhouseholds, the monthly residual income in 2022 was \n$7,500, about a half percent above 2001 levels.\nWhile many higher-income households have been \nable to afford a comfortable standard of living, a large \nshare of renters have not. According to the Economic \nPolicy Institute, a single-person household in the \nnation’s most affordable counties would still need \nabout $2,000 each month in residual income to cover \n-50\n-40\n-30\n-20\n-10\n0\n10\n2001\n2004\n2007\n2010\n2013\n2016\n2019\n2022\nHousehold Income\n$30,000-$74,999\n$75,000 and Over\nUnder $30,000\nNotes: Household incomes and residual incomes are adjusted \nfor inflation using the CPI-U for All Items. Households that are \nnot required to pay rent are excluded. Data for 2020 are based \non 2019 and 2021 values because of pandemic data disruptions. \nSource: JCHS tabulations of US Census Bureau, American \nCommunity Survey 1-Year Estimates.\nFigure 25\nAfter Paying for Housing, Lower-Income Renters \nHave Less Money Left Over Than Ever Before\nChange in Residual Income Since 2001 (Percent)\nall other needs, an amount that far exceeds what most \nrenters have available after paying for rent and utilities. \nIndeed, 42 percent of renters have less than $2,000 in \nresidual income and, in many cases, much less. \nRapid inflation of both rents and consumer goods and \nservices over the last two years has further stretched \nhousehold budgets. According to the Household Pulse \nSurveys from June to October 2023, 63 percent of renter \nhouseholds reported their rents rose in the past year, \nwith 15 percent reporting increases of at least $250. \nThe vast majority of surveyed households also noticed \nprice increases for other goods in their communities \nin the preceding two months. \nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n39\n\n\n\n--- Page 42 ---\nThese price increases have been especially hard \non lower-income renters. About two-thirds of renter \nhouseholds earning less than $25,000 reported feeling \nstressed by rent hikes and inflation (Figure 26). Like­\nwise, just over 60 percent of Hispanic and Black house­\nholds were very stressed by inflation, compared to 54 \npercent of white and 41 percent of Asian households. \nAnd having children further compounded the financial \nstrain, with 67 percent of renters with children feeling \nstressed by price increases as compared to 51 percent \nof households without children.\nAgainst this backdrop, many of the most financially \nvulnerable renters have reduced their spending in \nareas critical to well-being. Rent is the largest expense \nfor most households and often takes priority because \nthe consequences of not paying rent could include \neviction and homelessness. Center tabulations of the \nConsumer Expenditure Survey indicate that severely \ncost-burdened renter households in the lowest expen­\nditure quartile (a proxy for low incomes) spent 39 \npercent less on food and 42 percent less on healthcare \nthan their unburdened counterparts in 2022.\n0\n10\n20\n30\n40\n50\n60\n70\nAsian\nWhite\nBlack\nHispanic\n$75,000 and Over\n$50,000-$74,999\n$35,000-$49,999\n$25,000-$34,999\nUnder $25,000\nRace/\nEthnicity\nHousehold\nIncome\nNotes: Black, Asian, and white respondents are non-Hispanic. Hispanic individuals may be of any race. People identifying as another \nrace (including Native American) or multiple races are not shown owing to data limitations. The survey asked, “How stressful, if at all, has \nthe increase in prices in the last two months been for you?” \nSource: JCHS tabulations of US Census Bureau, Household Pulse Surveys, June–October 2023.\nFigure 26\nLower-Income, Hispanic, and Black Renter Households Have Been Hardest Hit by Inflation\nShare of Renter Households Very Stressed by Price Increases (Percent)\nMore recently, the Census Bureau’s Household Pulse \nSurvey illustrates that such trade-offs continued into \n2023, particularly for lower-income households and \nthose that have fallen behind on rent. While almost \ntwo-thirds of renter households making less than \n$25,000 reported difficulty paying for their usual \nexpenses, the share rose to 82 percent for households \nin this income bracket who were behind on rent.\nRenters may make other trade-offs, too. For example, \nin an effort to reduce housing costs, a household might \nrelocate to an older or substandard unit. Such units \ntend to have lower rents, but they are also more likely \nto present significant risks to tenant health and safety. \nRenters may also reduce housing costs by opting for \novercrowded living arrangements, longer commutes, \nor neighborhoods that are less safe, have fewer \namenities, or are in lower-performing school districts. \nThese and other such choices may further threaten an \nalready vulnerable household’s well-being, financial \nstability, and economic mobility.\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n40\n\n\n\n--- Page 43 ---\nThe Outlook\nThe pandemic propelled the housing affordability \ncrisis to new heights, making it an urgent priority for \ncommunities across the nation. While the influx of new \nsupply at the high end of the market will provide some \nrelief for the rising ranks of cost-burdened renters in \nthe middle and higher income brackets, little respite is \nlikely for those with lower incomes. Construction costs \nand market dynamics make it difficult to build new \nunits at lower and moderate rent levels, increasing \nthe need to preserve and repair the existing stock of \naffordable rental housing. \nHouseholds with lower incomes especially will continue \nto struggle to find affordable homes anywhere in the \ncountry, let alone in neighborhoods with high-quality \namenities and services. Absent increased afford­\nable housing production and subsidies or additional \nincome supports, more renters—especially those with \nlower incomes—will strain to make ends meet, as so \nmany already are. \nRecord-high cost \nburdens are forcing \ntrade-offs for lower-\nincome renters.\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n41\n\n\n\n--- Page 44 ---\nRENTAL HOUSING \nCHALLENGES\nFederal subsidies fail to meet the large and growing need for affordable housing, and rental assistance programs \nface ongoing challenges. To mitigate the shortfall, some state and local governments have sought to remove \nzoning and regulatory barriers to affordable and multifamily construction. Nevertheless, an increasing number \nof renters are at risk of eviction, and homelessness has hit an all-time high. Climate change–related hazards \nand energy price hikes are creating further precarity for renter households and property owners.\n \nRental Subsidies Fall Short\nRental assistance is a crucial housing support for \nroughly 5 million households that earn no more than \n50 percent of their area median income. The majority \nof those obtaining assistance through Department of \nHousing and Urban Development (HUD) programs are \nolder adults, people with disabilities, and families with \nchildren. Unfortunately, rental assistance programs \nhave not expanded to meet the growing demand. \nInstead, federal funding for housing assistance has \nincreased only modestly and incrementally since the \nmid-1990s, aside from significant one-off appropria­\ntions during the Great Recession and the pandemic. \nBetween 2001 and 2021, the number of renter house­\nholds receiving support increased by just 910,000, \neven as the number of renter households with very \nlow incomes grew by 4.4 million to 19.3 million. Conse­\nquently, the number of income-eligible households \nthat do not receive assistance jumped from 10.7 million \nin 2001 to 14.2 million in 2021, leaving three out of every \nfour eligible households unassisted. \nSimultaneously, cost-burden rates have increased \nfor income-eligible unassisted renter households. As \nrents have risen faster than incomes, the share of these \nhouseholds with severe cost burdens, substandard \nhousing, or both jumped from 47 percent in 2001 to \n60 percent in 2021. This reflects a rise in worst case \nhousing needs from 5.0 million to a record-high 8.5 \nmillion households over two decades. \nSubsidized Stock Requires \nSubstantial Investments\nThough all of the nation’s rental assistance programs \nfall far short of the need, public housing in particular is \nseverely underfunded. Decades of insufficient capital \nand operating funds have left a massive maintenance \nbacklog estimated at $90 billion. The stock’s generally \npoor condition has motivated many public housing \nauthorities to demolish or transition units to other \nfunding streams. As a result, the number of occupied \npublic housing units has declined. In 2022, 835,000 \nhouseholds lived in public housing, down from a peak \nof 1.4 million in 1994 (Figure 27).\nThe Rental Assistance Demonstration (RAD) program, \nwhich converts public housing units to longer-term, \nstable Section 8 contracts, allows housing providers \nto secure other sources of financing to under­\ntake needed maintenance and redevelopment. \n06\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n42\n\n\n",
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        "text": "--- Page 45 ---\n0.0\n0.5\n1.0\n1.5\n2.0\n2.5\n3.0\n1990\n1994\n1998\n2002\n2006\n2010\n2014\n2018\n2022\nPublic Housing\nHousing Choice Vouchers\nProject-Based Section 8\nLIHTC\nNotes: LIHTC occupancy is based on the 98.6% rate reported by \nNovogradac in 2021. LIHTC units include low-income units only. \nSources: JCHS tabulations of HUD, Picture of Subsidized \nHouseholds and Low-Income Housing Tax Credit Database; \nRobert Collinson, Ingrid Gould Ellen, and Jens Ludwig, Low-Income \nHousing Policy, NBER Working Paper, 2015.\nFigure 27\nLIHTC and Vouchers Have Become the Largest \nRental Assistance Programs\nOccupied Units (Millions)\nUnder RAD, 226,000 units have converted to Section 8 \nunits to date, boosting the number of project-based \nSection 8 households to 1.2 million in 2022. \nA recent extension of RAD offers public housing author­\nities the first real opportunity to develop new public \nhousing units since the Faircloth Amendment capped \nthe public housing stock at 1999 levels. With the demo­\nlition of hundreds of thousands of units since then, \nmany places operate below their allowable maximum \nbut do not have the capital to support new units. Fair­\ncloth-to-RAD helps address this financing hurdle, \nproviding housing authorities with the opportunity to \nadd nearly 220,000 units back to the stock through \nHUD’s mixed-finance program, with the knowledge \nthat the units will convert to longer Section 8 contracts.\nFaircloth-to-RAD holds promise for expanding the \nsubsidized stock. Still, most new construction, rehabili­\ntation, and acquisition projects are currently financed \nthrough the Low-Income Housing Tax Credit (LIHTC) \nprogram. Since the program’s creation in 1986, LIHTC \nhas supported the development and preservation of \nmore than 3.6 million low-income units. While LIHTC \nis an important source of quality affordable housing \nin many communities, developers are permitted to \nflip these units to market rate after the conclusion \nof the affordability period, typically at least 30 years. \nMore than 325,000 units are set to expire between \n2024 and 2029 alone. Additionally, at least 7,000 units \nare prematurely lost each year through the qualified \ncontracts process, which permits property owners to \nopt out of the program after 15 years. \nFurther, LIHTC does not necessarily protect a renter \nfrom cost burdens. Because rents are capped based \non the income designation of the unit, tenants who \nmake less than that maximum may find themselves \nin an unaffordable unit. For some renters with lower \nincomes, Housing Choice Vouchers can help make \nup a portion of the difference. \nHousing Choice Vouchers have been the dominant \nHUD subsidy for the last 25 years, assisting 2.3 million \nrenter households in 2022. However, voucher holders \nmay struggle to secure a unit priced within their area’s \nfair market rent. Vouchers also do not guarantee an \naffordable apartment. Indeed, 26 percent of voucher \nrecipients were cost burdened despite receiving assis­\ntance. This is likely because renters can select housing \nthat costs more than the program limit as long as they \npay for the difference out of pocket. \nMoreover, Housing Choice Vouchers rely on the private \nmarket and landlord participation. Yet many property \nowners find the program’s inspections and require­\nments too burdensome to merit their involvement. \nGiven these challenges, about 40 percent of voucher \nholders are unable to secure an appropriate unit in \nthe allotted time. To address these obstacles, HUD \nannounced in 2023 that the agency will pilot a direct-\nto-tenant assistance program.\nThough HUD programs serve rural areas, multifamily \nsubsidies from the US Department of Agriculture \n(USDA) play an important role in these communities. \nUSDA’s Section 515 Rural Rental Housing program offers \nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n43\n\n\n\n--- Page 46 ---\nlow-interest mortgages for multifamily housing and \nrequires that rents in these units remain affordable \nover the 30-year loan period. Currently, Section 515 \nserves 378,000 renter households in rural areas with \nlimited rental supply. However, this stock is dwindling. \nThe program has not financed new housing in recent \nyears, and most of the existing loans are nearing matu­\nrity. Loan prepayments also threaten the stock. Nearly \n22,000 units exited the program between 2016 and 2021, \naccording to the Housing Assistance Council.\nState and Local Governments Step \nUp Efforts\nLimited federal rental assistance has prompted many \nstate and local governments to find solutions to the \naffordability crisis. Increasingly, states and localities \nrely on multifamily housing bonds to finance afford­\nable housing, often pairing tax-exempt bond revenue \nwith LIHTC financing. Multifamily private activity bond \nissuances rose from $2.4 billion in 2010 to a record $17.2 \nbillion in 2020 (Figure 28). On a smaller scale, more \nthan 800 state and local housing trust funds generated \nalmost $3 billion annually to fund affordable housing.\nIn addition to raising their own revenues, state and local \ngovernments manage federal resources for affordable \nhousing. Since 2016, the National Housing Trust Fund \nhas provided states with flexible funding ranging from \n$173 million to nearly $740 million annually. American \nRescue Plan state and local fiscal recovery funds have \nalso been a recent boon to affordable housing efforts. \nState and local governments budgeted $17.7 billion of \nthese funds through June 2023 to support about 2,800 \naffordable housing projects and programs nationwide. \nSome cities are finding ways to take units out of the \nprivate market for longer-term affordability, including \nshared and public ownership models. According to \na 2022 survey by the Grounded Solutions Network, \ncommunity land trusts hold nearly 20,000 rental \nunits nationwide. Growing momentum for publicly or \ncommunity-owned permanently affordable housing \nhas also spurred calls for social housing plans in Cali­\nfornia and Rhode Island, as well as in New York City, \nLos Angeles, San Francisco, Kansas City, Seattle, and \nWashington, DC. \nAt the same time, a growing tenant movement has \nprompted rent regulation legislation. In 2019, Oregon \npassed the first statewide rent stabilization bill, limiting \nannual rent increases to 7 percent plus inflation. Cali­\nfornia enacted similar legislation shortly thereafter. At \nthe local level, Saint Paul recently implemented rent \nstabilization measures. \nHowever, other state and local legislative efforts to limit \nrent increases have failed, in part because striking a \nbalance between the priorities of renters and property \nowners proved difficult. While renters seek protection \nfrom rapid rent hikes, landlords are concerned about \nlimits on rent increases that can make it more difficult \nto cover growing expenses. There is also the risk that \ndevelopers may steer clear of jurisdictions with rent \ncontrol, creating longer-term supply challenges.\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n44\n0\n2\n4\n6\n8\n10\n12\n14\n16\n18\n2005\n2007\n2009\n2011\n2013\n2015\n2017\n2019\nNote: Multifamily private activity bonds are issued by state and  \nlocal authorities.\nSource: Council of Development Finance Agencies.\nFigure 28\nMultifamily Bond Issuances Jumped in the  \nLast Decade\nMultifamily Bond Issuances (Billions of Dollars)\n\n\n\n--- Page 47 ---\nBarriers to New Construction \nAre Falling\nReducing the barriers to multifamily housing construc­\ntion can improve affordability and increase rental \noptions. Nationwide, an estimated 75 percent of land \nin major cities is zoned exclusively for single-family \nhomes. By limiting diverse housing types, commu­\nnities effectively exclude renters. Amending zoning \nlaws does not guarantee that new units will be built \nor will be affordable to renters with lower incomes, but \nit removes a significant barrier to such possibilities.\nSuch zoning reforms are gaining popularity, with recent \nefforts at all levels of government. The 2023 federal \nomnibus spending bill included $85 million for new “Yes \nIn My Back Yard” grants to encourage state and local \ngovernments to identify and address exclusionary \nzoning and land use policies. The program follows \nWashington’s model of incentivizing communities to \ncarefully examine restrictive zoning. There, the initiative \nsupported several cities in changing their land use \npolicies to allow duplexes, triplexes, and accessory \ndwelling units in formerly single-family districts.\nAlso, a growing list of states are preempting local \nsingle-family zoning laws to compel more neighbor­\nhoods to allow a range of housing options. In 2023 \nalone, Montana, Vermont, and Washington passed \nlegislation requiring local communities to loosen \nzoning laws to allow modest-sized multifamily build­\nings. These changes came on the heels of sweeping \nzoning reforms in California, Maine, and Oregon that \nsimilarly opened single-family-only zones to different \ntypes of housing. And in Massachusetts, recent legis­\nlation mandated that the 177 jurisdictions served by \npublic transit must designate at least one zone to allow \nmultifamily buildings and higher densities without \nspecial approvals.\nAt the local level, cities are also eyeing zoning reforms \nto enable more supply and improve affordability over \nthe longer term. In 2020, Cambridge, Massachu­\nsetts, adopted an innovative 100 percent affordable \nhousing overlay, allowing affordable development \nAbout 75 percent of \nland in major cities is \nzoned exclusively for \nsingle-family homes.\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n45\n\n\n\n--- Page 48 ---\nprojects by right and at greater heights and densities. \nCambridge is also among the cities—including Ann \nArbor and Cincinnati—that recently removed some or \nall parking requirements in an effort to reduce the cost \nof construction and, in turn, rents in new developments. \nEvictions Have Returned to \nPre-Pandemic Levels\nThe protections and supports that kept households in \ntheir homes through the first years of the pandemic \neither have ended or are nearing depletion. Emergency \nRental Assistance (ERA) and federal, state, and local \neviction moratoriums—as well as property owners \nwho gave renters additional leniency—helped keep \nvulnerable renters housed, reducing eviction cases \nby an estimated 58 percent through the end of 2021, \naccording to the Eviction Lab. \nERA has been a particularly critical program, making \nmore than 10.8 million payments to renters at risk of \neviction and, in doing so, making their landlords whole. \nWhile some ERA funds have spending timelines that \nextend through 2025, most of the money has already \nbeen disbursed. As of mid-October 2023, about $6.5 \nbillion remained of the $46.55 billion in authorized \nassistance, and programs in most states were closed. \nYet renters continue to face financial stressors. In the \nmiddle of 2023, 12 percent of all renter households were \nbehind on rent despite low unemployment and the \nbroader economic recovery, with even higher rates \nfor lower-income households (18 percent) and those \nheaded by a Black person (21 percent) or an Asian \nperson (17 percent). With significant shares of renters \nstill at risk as ERA and other critical protections wind \ndown, eviction filings approached pre-pandemic levels \nat the end of 2022 and remained elevated through the \nfirst half of 2023 (Figure 29). \nStill, some renters are benefitting from ongoing efforts \nto keep tenants housed. At the federal level, HUD’s \nEviction Protection Grant Program has offered funding \nto a limited number of governments and nonprofits \nthat provide or connect renters with legal services. \nStates and localities are also working to pass right-to-\ncounsel legislation for renters facing eviction. Jurisdic­\ntions in 17 states had some form of right to counsel as \nof mid-2023, with 3 states and 12 local governments \nenacting such programs since 2021. State, county, and \nlocal governments are also continuing their emer­\ngency rental assistance programs, with about half \nof ERA administrators surveyed by the National Low \nIncome Housing Coalition reporting that they plan to \nkeep running these programs beyond the end of the \nUS Department of the Treasury’s ERA funds. \n0\n20\n40\n60\n80\n100\n120\n2021\n2022\n2023\n2020\nNotes: Data include eviction filings in the 10 states and 18 cities \nthat had complete data through the end of June 2023. Rates are \nrelative to a pre-pandemic average baseline.\nSource: JCHS tabulations of Eviction Lab, Eviction Tracking System.\nFigure 29\nEviction Filings Returned to Pre-Pandemic Levels \nAfter Relief Measures Expired\nEviction Filings Relative to Pre-Pandemic Average (Percent)\nHomelessness Reaches an \nAll-Time High\nAs evictions and housing costs have risen, so has \nhomelessness. In 2023, a record-setting 653,100 \npeople in the US were unhoused on a given night in \nJanuary. During the early years of the pandemic, evic­\ntion prevention efforts, emergency rental assistance \nprograms, and temporary income supports minimized \nthe rise in homelessness. However, many of these \nprotections ended in 2022 as rents rose rapidly and \nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n46\n\n\n\n--- Page 49 ---\namid an influx of migrants prohibited from working. \nConsequently, the number of unhoused people rose \nby nearly 71,000 in just one year.\nThe most recent increase reflects a significant growth \nin both sheltered and unsheltered homelessness. \nBetween January 2022 and 2023, the number of people \nstaying in shelters rose by 47,860 to 396,490. Mean­\nwhile, an increase of 22,780 people staying in places \nnot intended for human habitation drove the popu­\nlation experiencing unsheltered homelessness to an \nall-time high of 256,610. \nRising unsheltered homelessness continues a longer-\nterm trend. Since 2015, this population has grown \nnationally by more than 83,000 people (48 percent). \nWhile states across the country have seen their unshel­\ntered populations increase, the growth has been \nhighest in the West, where housing costs have risen \nrapidly and shelter resources were already strained. \nIn California alone, 123,420 people are experiencing \nunsheltered homelessness, amounting to 48 percent \nof the national unsheltered population. Even states \ntraditionally considered more affordable, like Arizona, \nOhio, Tennessee, and Texas, have experienced rising \nunsheltered homelessness since 2015 (Figure 30).\nSeveral populations are vulnerable to homeless­\nness. Widespread discrimination against Black and \nHispanic people creates inequities in household \nfinances, housing opportunities, and evictions. As a \nresult, Black people are 37 percent of all unhoused \npeople but just 13 percent of the US population, while \nHispanic people are more than a quarter (28 percent) \nof people experiencing homelessness but less than \n20 percent of the population. In addition to discrimi­\nnation, Native Americans and Indigenous people face \nunique housing challenges that also leave a dispro­\nportionate share homeless. \nDecrease (Up to 1,535)\n1–500 Increase\n501–1,000 Increase\n1,001–50,000 Increase\nChange in Unsheltered Homelessness,\n2015–2023 (People)\nSource: JCHS tabulations of US \nDepartment of Housing and \nUrban Development, Annual \nHomeless Assessment Report \nPoint-in-Time Estimates.\nFigure 30 \nUnsheltered Homelessness Has Risen in Most States\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n47\n\n\n\n--- Page 50 ---\nIn response to the increase in homelessness, the \ncurrent administration has offered federal agencies \nadditional in resources. Through its Continuum of Care \nprogram, HUD made available a record-setting $3.1 \nbillion in competitive grants in 2023 for homelessness \nresponse efforts. The 2021 American Rescue Plan Act \nalso included $5 billion for homelessness services, \nshelters, and housing through the HOME-ARP program \nand 70,000 Emergency Housing Vouchers for people \nexperiencing or at risk of homelessness. Still, a much \ngreater investment by the federal government in \naffordable housing and rental assistance is imper­\native to prevent further increases in homelessness, \nrehouse people at scale, and reduce the costs of \nhomelessness responses.\nState and local governments have filled some gaps \nby using flexible pandemic funding to serve unhoused \npeople. More than $3.8 billion of state and local fiscal \nrecovery monies have been earmarked for home­\nlessness services and housing. However, some states, \nincluding Missouri and Tennessee, are responding \nto heightened homelessness by passing laws that \nrestrict encampments or criminalize sleeping on \npublic property. Such policies are harmful to people \nexperiencing homelessness, divert resources from \nsupporting unhoused people, and do not address \nthe underlying housing affordability issues that push \npeople into homelessness.\nRental Stock Urgently Requires \nEnergy Upgrades\nExtreme weather variability and rising temperatures \ncaused by climate change are expected to increase \nhome energy demand and, in turn, renters’ housing \ncosts. About half of renters making less than $30,000 \n(8.4 million households) experienced energy insecu­\nrity in 2020 (Figure 31). The Low Income Home Energy \nAssistance Program offset costs for more than 6 million \nrenter and homeowner households in 2022 but none­\ntheless was unable to fully address the need.\nEnergy-Insecure Households\nShare Facing Energy Insecurity (Right Scale)\n0\n10\n20\n30\n40\n50\n60\n0\n1\n2\n3\n4\n5\n6\nUnder\n$15,000\n$15,000-\n$29,999\n$30,000-\n$44,999\n$45,000-\n$74,999\n$75,000\nand Over\nNote: Households that are energy insecure have forgone basic \nnecessities, maintained an unhealthy temperature inside their \nhome, or received a disconnection notice.\nSource: US Energy Information Administration, 2020 Residential \nEnergy Consumption Survey.\nFigure 31\nMillions of Renters Are Energy Insecure\nRenter Households \n(Millions)\nShare Facing Energy \nInsecurity (Percent)\nDespite improvements in construction techniques and \nretrofits, the rental housing stock still has efficiency \nand electrification needs. While renters use less energy \nthan homeowners on a per household basis, rentals \naccount for greater energy use per square foot than \nowner-occupied homes, according to the Residential \nEnergy Consumption Survey. Older rental homes, in \nparticular, use more energy than newer homes and \nhave considerable efficiency, renewable energy instal­\nlation, and electrification needs. \nNew federal resources will help address the need for \nenergy efficiency by providing funding to encourage \ntenants and property owners to make select improve­\nments. The Weatherization Assistance Program, for \nexample, received a one-time $3.5 billion infusion \nthrough the Infrastructure Investment and Jobs Act \nto help homeowners—and likely a modest number \nof renter households—fund approved upgrades. The \nInflation Reduction Act also granted renters and rental \nproperty owners $8.8 billion in household rebates and \nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n48\n\n\n\n--- Page 51 ---\ntax credits, expanded home energy tax credits, and \nprovided an additional $1 billion for energy and water \nefficiency improvements in HUD-assisted housing. \nSimilarly, states are making financial resources avail­\nable for multifamily retrofits. The new Massachusetts \nCommunity Climate Bank, the nation’s first “green \nbank” focused exclusively on affordable housing, will \nlend an initial $50 million in state funds to leverage \nadditional federal and private resources and promote \nefficiency improvements. And in response to a deadly \nheat wave in 2021, Oregon created a $15 million grant \nand rebate program for landlords who install heat \npumps as energy-efficient alternatives to air condi­\ntioners and furnaces. \nClimate Change Threatens Renters \nand Their Homes\nImproving the rental stock’s climate resiliency is \nanother urgent priority. The frequency and severity of \nhazards related to climate change leave an increasing \nnumber of renter households at risk of hurricanes, \nwildfires, floods, and other extreme climate-related \nevents. Disasters also carry longer-term risks to renters. \nBoth evictions and rents increase in the year after a \nclimate-related disaster, and recovery assistance for \nrenters is dramatically lower than homeowner aid and \ntakes longer to receive. \nRising insurance premiums and the increasingly \nfrequent withdrawal by insurers from high-risk markets \nare making property insurance more expensive. Yet \neven as insurance costs are growing, coverage has \ndecreased. Nearly two-thirds of firms surveyed in 2023 \nby the National Multifamily Housing Council reported \nthat they had to increase their deductibles, and about \na third noted that their insurance carrier had limited \nor reduced coverage amounts. These rising costs \nthreaten the financial solvency of existing properties \nand can constrain the financing of new construc­\ntion, especially for affordable housing providers. \nRenters are also affected by the shifting insurance \nmarkets. Just over half have a general renters insur­\nance policy. But most of these policies do not include \nseparate flood coverage. \nWith gaps in insurance, federal resources are crucial in \nhelping renter households and communities with relief \nand recovery after disasters. The Federal Emergency \nManagement Agency’s Individuals and Households \nProgram has provided $4.5 billion directly to 1.4 million \nrenter households since 2020. Additionally, $10 billion \nof Community Development Block Grant Disaster \nRecovery funds assisted communities affected by \ndisasters between 2020 and 2022. State and local \ngrantees can use these monies to rebuild multifamily \nhousing and cover rent payments. Still, they typically \nput most of their funds toward supporting individual \nhomeowners, leaving unaddressed the assistance \nthat rental property owners may need to bring units \nback online. \nGreater investment in pre-disaster upgrades for the \nexisting rental stock is also critical to protecting the \nalready dwindling supply of affordable homes. At \nthe federal level, the new Green and Resilient Retrofit \nProgram will enable HUD-supported providers to rein­\nvest in their housing, making the units more resilient \nto extreme weather events while improving energy \nefficiency. Locally, efforts such as the Washington, DC, \nResilience and Solar Assessment tool will help owners \nof affordable multifamily properties identify adapta­\ntion improvements and potential funding sources to \npay for them. \nUltimately, increasing assistance for pre-disaster \nretrofits, supporting affordable housing providers with \ninsurance costs, and investing in regional coordinated \nplanning are critical to ensuring rental homes and \noperators are equipped to meet the challenges of \nclimate change while preserving affordability.\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n49\n\n\n\n--- Page 52 ---\nThe Outlook\nThough the affordability challenge is not new, it has \nnoticeably worsened in recent years. Before the \npandemic, housing cost burdens swiftly climbed \nthe income scale, especially in high-cost markets, \nwhile households with lower incomes grappled with \npersistently high burdens. The pandemic signifi­\ncantly exacerbated these problems as rents surged \nat unprecedented rates, leaving record numbers of \nrenters struggling to afford housing and other basic \nneeds. Against this backdrop and with the sunsetting \nof pandemic-era supports for renters, evictions have \nrisen and more people are experiencing homelessness \nthan ever before. \nAs a growing number of middle-income households \nstruggle with increasingly unaffordable housing, the \ncrisis is receiving more attention. State and local \ngovernments are seeking to reduce barriers to building \nhousing that is more affordable and located in desir­\nable neighborhoods. Such actions include reforming \nzoning laws to allow for a greater variety of housing \ntypes. While this work is crucial, state and local govern­\nments cannot tackle the affordability crisis alone. \nIndustry must continue to innovate less costly ways to \nbuild homes. If successful and achieved at the needed \nscale, these efforts could address the affordability \nchallenges facing middle-income renters. \nEven so, a gaping divide persists between what \nlower-income households can afford and the cost \nof building and operating rental housing. The need to \nexpand housing subsidies remains a pressing priority. \nOver the last few decades, rental assistance has failed \nto keep up with the growing number of income-eligible \nrenters. The number of unassisted renters is now at \nan all-time high, forcing households to make painful \nchoices that may include forgoing basic needs in favor \nof housing. To meaningfully shrink the affordability \ngap, all levels of government, as well as the private \nsector, must increase their commitment to assisting \nhouseholds and use every available tool. \nThere is also an increasingly urgent need to address \nchallenges at the intersection of housing and climate \nchange. Necessary actions include mitigating the \nhousing sector’s contribution to greenhouse gas emis­\nsions and adapting policies and practices to better \nhelp households recover from increasingly frequent \nclimate-related hazards. Likewise, the existing and \nfuture stock must be able to meet the needs of the \nnation’s rapidly aging population. \nProperty owners’ willingness and ability to make these \nsorts of crucial investments may be hampered by high \ncosts, and many upgrades may only be possible with \nsubsidies. Recently, federal programs have expanded \nfunding for energy-efficiency investments, with an \neye toward ensuring that rental properties and lower-\nincome communities benefit from these resources. \nImportantly, while the scope of needed investments \nis substantial, so is the cost of inaction. The instability \ncaused by a lack of affordable housing bleeds over to \nother public spending, threatening the well-being of \nmillions of people. Pandemic-era emergency housing \nprograms demonstrated the value of supporting \nstable housing while showing that we can muster the \npolitical will for these efforts. With housing challenges \ngrowing ever more severe, now is the time to make a \nfuller commitment to ensuring that all people living \nin the US have a decent, safe, and affordable place \nto call home. \n\t\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n50\n\n\n\n--- Page 53 ---\nADDITIONAL\nRESOURCES\nThe following interactive figures and data tables are a sample of \nthe additional resources available at www.jchs.harvard.edu.\nInteractive Maps and Data\nShare of Cost-Burdened Renters by Metro Area: 2022\nChanges in Cost-Burdened Rates by Income by State: 2001–2022\nNumber of People Experiencing Homelessness by State: 2007–2023\nDecline in Low-Rent Units by State: 2012–2022\nData Tables\nBasic Rental Housing Facts by State and Metro Area: 2022\nCharacteristics of Renter Households by State and Metro Area: 2022\nRentership Rates by State and Metro Area: 2022\nNumber and Share of Cost-Burdened Renters by State: 2001–2022\nNumber of Rental Units by Monthly Contract Rent by State: 2012–2022\n07\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n51\n\n\n\n--- Page 54 ---\nTable A-1\nCharacteristics of Renter Households: 2010–2022\nRenter Households (Thousands)\nPercent Change\n2010\n2019\n2022\n2010–2022\n2019–2022\nAll Renter Households\nTotal\n39,620\n44,012\n45,123\n14\n3\nAge of Householder\nUnder 35\n14,591\n15,159\n16,009\n10\n6\n35–44\n8,098\n8,776\n8,869\n10\n1\n45–54\n6,965\n6,840\n6,630\n-5\n-3\n55–64\n4,630\n6,014\n5,966\n29\n-1\n65 and Over\n5,336\n7,222\n7,650\n43\n6\nHousehold Income\nUnder $15,000\n7,132\n6,853\n7,529\n6\n10\n$15,000–$29,999\n8,072\n7,384\n7,068\n-12\n-4\n$30,000–$44,999\n6,387\n6,313\n6,926\n8\n10\n$45,000-$74,999\n8,603\n9,953\n10,076\n17\n1\n$75,000 and Over\n9,425\n13,508\n13,524\n43\n0\nHousing Cost Burdens\nNot Burdened\n19,736 \n23,623\n22,763\n15\n-4\nModerately Burdened\n9,075\n9,870\n10,292 \n13\n4\nSeverely Burdened\n10,809\n10,518\n12,068\n12\n15\nEducational Attainment of Householder\nNo High School Diploma\n6,978\n5,960\n5,518\n-21\n-7\nHigh School Diploma or GED\n10,834\n11,652\n11,829\n9\n2\nSome College\n12,952\n13,940\n13,929\n8\n0\nBachelor’s Degree\n5,960\n8,119\n8,988\n51\n11\nGraduate/Professional Degree\n2,894\n4,341\n4,859\n68\n12\nHousehold Type\nMarried, Without Children\n4,773\n5,838\n5,909\n24\n1\nMarried, with Children\n5,582\n5,633\n5,116\n-8\n-9\nSingle Parent\n6,999\n6,593\n6,349\n-9\n-4\nOther Family\n3,445\n4,110\n4,333\n26\n5\nSingle Person\n14,682\n16,811\n17,975\n22\n7\nOther Nonfamily\n4,138\n5,026\n5,442\n32\n8\nJOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY\nAMERICA’S RENTAL HOUSING 2024\n52\nNotes: Household incomes are adjusted for inflation using the CPI-U for All Items. Moderately (severely) cost-burdened households \nspend 30–50% (more than 50%) of income on rent and utilities. Households with zero or negative income are assumed to be burdened, \nwhile households that are not required to pay rent are assumed to be unburdened.\nSource: JCHS tabulations of US Census Bureau, American Community Survey 1-Year Estimates.\n\n\n\n--- Page 55 ---\nAmerica’s Rental Housing 2024 was prepared by the Joint Center for Housing Studies of Harvard University. The Center \nstrives to improve equitable access to decent, affordable homes in thriving communities. We conduct rigorous research \nto advance policy and practice, and we bring together diverse stakeholders to spark new ideas for addressing housing \nchallenges. Through teaching and fellowships, we mentor and inspire the next generation of housing leaders.\nSTAFF\nWhitney Airgood-Obrycki \nCorinna Anderson \nJean Barrett \nPatricia Bravo Morales \nJames Chaknis \nKerry Donahue \nRiordan Frost \nChris Herbert \nAlexander Hermann \nAlexander von Hoffman \nMary Lancaster \nDavid Luberoff \nMagda Maaoui \nCarlos Martín \nDaniel McCue \nJennifer Molinsky \nSamara Scheckler\nSophia Wedeen \nPeyton Whitney \nAbbe Will \nJuanne Zhao\nSTUDENTS\nNora Cahill\nSophie Huang\nEtta Madete\nAditya Mukundan\nOlivia Novick\nAbby Yoon\nFELLOWS & ADVISORS\nBarbara Alexander \nFrank Anton \nDaniel Fulton \nJoe Hanauer \nNicolas Retsinas \nMark Richardson\nEDITOR\nLoren Berlin \nDESIGN\nPixels 360\nFOR ADDITIONAL COPIES, PLEASE CONTACT\nJoint Center for Housing Studies of Harvard University\n1 Bow Street, Suite 400 | Cambridge, MA 02138\nwww.jchs.harvard.edu | Twitter (X): @Harvard_JCHS\n\n\n\n--- Page 56 ---",
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      "overall_summary": "Here's a comprehensive summary of the document:\n\nExecutive Summary:\nThis report analyzes the state of rental housing in America in 2024, highlighting a market in transition with cooling trends after pandemic-era overheating, but facing persistent structural challenges. The document reveals a severe affordability crisis affecting 22.4 million cost-burdened households, alongside challenges with aging infrastructure, climate risks, and inadequate federal assistance programs.\n\nMain Themes and Topics:\n1. Market Conditions\n- Cooling rental market with slowing rent growth\n- Rising vacancy rates and declining property values\n- Decreased construction activity due to high interest rates\n\n2. Housing Stock and Supply\n- Growth in large multifamily buildings\n- Decline in affordable units\n- Aging infrastructure and maintenance challenges\n\n3. Affordability Crisis\n- Record levels of cost-burdened renters\n- Shortage of low-rent units\n- Rising homelessness\n\n4. Policy and Assistance Programs\n- Limited federal rental assistance\n- State/local government interventions\n- Zoning and development challenges\n\nKey Findings:\n1. Market Statistics\n- Rent growth dropped to 0.4% (Q3 2023) from 15.3% (2022)\n- Vacancy rates increased to 6.6%\n- 13% decline in apartment prices\n\n2. Affordability Metrics\n- 22.4 million cost-burdened households\n- 12.1 million severely cost-burdened households\n- Only 7.2 million units available under $600/month\n\n3. Environmental Concerns\n- 41% of rental units in climate-risk areas\n- Significant energy efficiency needs\n- Rising insurance and operating costs\n\nDocument Structure:\nThe report is organized into four main sections:\n1. Market Overview and Trends (Pages 1-12)\n2. Rental Housing Stock Analysis (Pages 13-23)\n3. Housing Conditions and Market Performance (Pages 24-33)\n4. Investment Patterns and Policy Implications (Pages 34-56)\n\nEach section provides detailed analysis supported by data and examines different aspects of the rental housing market, from broad economic trends to specific policy challenges.",
      "chunk_summaries": [
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          "summary": "Here's a summary of the key points from the 2024 America's Rental Housing report (pages 1-12):\n\nKey Market Trends:\n- Rental markets are cooling after a period of significant overheating\n- Rent growth has nearly stopped (0.4% in Q3 2023, down from 15.3% in early 2022)\n- Vacancy rates increased to 6.6% in Q3 2023 from pandemic low of 5.6% in late 2021\n- Demand is stabilizing after pandemic fluctuations\n\nAffordability Challenges:\n- Record-high 22.4 million renter households are cost-burdened (spending >30% of income on rent)\n- 12.1 million severely cost-burdened households (spending >50% of income on rent)\n- Supply of low-rent units declining - only 7.2 million units under $600/month\n- Homelessness reached all-time high of 653,100 people in January 2023\n\nHousing Safety Net Issues:\n- Only 1 in 4 eligible households receive rental assistance\n- Public housing faces $90 billion maintenance backlog\n- Many subsidized units facing expiring affordability periods\n- State/local governments trying to fill gaps but federal resources needed\n\nMarket Challenges:\n- High interest rates depressing market activity and new construction\n- Multifamily starts down 30% year-over-year as of October 2023\n- Property prices dropped 13% by Q3 2023\n- Aging rental stock requires significant reinvestment\n- Operating costs up 9% year-over-year in June 2023\n\nOutlook:\n- Market softening likely to continue short-term as new supply comes online\n- Affordability remains critical concern, especially for lower-income renters\n- Strong long-term demand expected from Gen Z, millennials and baby boomers\n- Greater federal commitment needed to address housing affordability crisis\n\nThe report indicates a rental market in transition, with some easing of pandemic pressures but persistent structural challenges around affordability and the housing safety net.",
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          "summary": "Here's a summary of the key points from this section about rental housing stock:\n\nKey Trends:\n1. Large Building Growth\n- Total rental supply increased by 4.3 million units to 48.1 million units (2010-2022)\n- Largest growth in buildings with 20+ units (+3.3 million units)\n- Share of rentals in large multifamily buildings increased by 5 percentage points\n\n2. Low-Rent Unit Decline\n- Loss of 2.1 million units renting below $600/month in last decade\n- Total loss of 6.1 million units renting for less than $1,000\n- Only 16% of units had rents below $600 in 2022, down from 22% in 2012\n\n3. Geographic Variations\n- Northeast has highest proportion of large multifamily buildings (33%)\n- West and Northeast have more high-cost rentals (45% and 34% above $1,500)\n- Urban areas have more multifamily units (74%) compared to suburban (59%) and nonmetropolitan (41%)\n\nImportant Demographics:\n1. Rental Access\n- 60% of low-rent unit residents earn less than $30,000 annually\n- Middle-income households occupy 28% of units renting below $600\n- Rental deserts (areas with <20% rental housing) affect access for lower-income households\n\n2. Market Distribution\n- 40% of rentals in urban areas\n- 48% in suburban areas\n- 11% in nonmetropolitan areas\n\nChallenges:\n1. Supply Issues\n- Declining affordable housing options\n- Geographic disparities in availability\n- Restrictions on development in some areas\n\n2. Equity Concerns\n- Limited rental options in higher-income neighborhoods\n- Socioeconomic segregation\n- Impact on housing access for people of color\n\nThis section highlights the ongoing transformation of rental housing stock and the challenges in maintaining affordable housing options across different geographic and demographic segments.",
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          "summary": "Here's a summary of the key points from this section on rental housing:\n\nHousing Inadequacy & Age:\n- The rental housing stock is older than ever, with a median age of 44 years in 2021\n- 3.9 million renter households lived in substandard housing in 2021\n- 8.4% of renter households lived in housing with multiple problems (structural deficiencies, lack of basic features)\n- Lower-income households and people of color are more likely to live in inadequate housing\n\nEnvironmental Hazards:\n- 41% of rental units (18.2 million) are in areas with substantial weather/climate-related threats\n- California has the most at-risk rental units (4.6 million), followed by Florida (2.4 million)\n- Low-rent and federally subsidized units are particularly vulnerable\n- 3.2 million units with rents below $600 are in at-risk areas\n\nMarket Trends:\n- Rent growth has cooled significantly (0.4% annual growth in mid-2023 vs 15.3% the previous year)\n- Vacancy rates increased to 6.6% in Q3 2023\n- Rising interest rates are constraining multifamily financing\n- Multifamily construction starts are slowing while completions remain high\n- Construction costs and delays are increasing\n- New construction increasingly targets higher-end rentals\n\nProperty Performance:\n- Operating expenses increased 9.3% in the year ending June 2023\n- Net operating income growth slowed to 3.5% in Q3 2023\n- Apartment prices fell 13% annually by Q3 2023\n- Transaction volumes declined significantly\n- Risk of loan delinquencies is increasing but remains relatively low\n\nThe main challenges identified are aging housing stock, environmental threats, affordability issues, and market cooling after the pandemic boom. The report suggests that new construction alone won't solve affordability problems, and significant investment is needed to maintain and protect existing rental stock.",
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          "summary": "Here's a summary of the key points from the document section:\n\nKey Findings:\n\n1. Growth in Nonindividual Investment:\n- Nonindividual investors (LLPs, LLCs, corporations) increased ownership to 27% of rental properties between 2001-2021\n- Particularly rapid growth in small multifamily properties (2-4 units) and 5-24 unit properties\n- Large rental properties (50+ units) are 93% owned by nonindividual investors\n\n2. Rental Market Outlook:\n- Rent growth likely to moderate due to stabilizing demand and new supply\n- High interest rates present challenges for apartment industry\n- Rising operating and insurance costs will challenge housing providers\n\n3. Affordability Crisis:\n- Record high of 22.4 million cost-burdened renter households in 2022 (spending >30% on housing)\n- 12.1 million severely cost-burdened households (spending >50% on housing)\n- Cost burdens increasing across all income levels\n- Particularly affects low-income, minority, young, and elderly renters\n\n4. Geographic Impact:\n- High cost-burden rates across all regions of the country\n- Highest rates in large metros\n- Even \"affordable\" states have >35% cost-burdened renters\n- Supply shortage most severe in central cities and high-density suburbs\n\n5. Key Challenges:\n- Severe shortage of affordable units for lowest-income households\n- Rising housing costs outpacing income growth\n- Inflation creating additional pressure on household budgets\n- Many renters forced to make difficult trade-offs affecting health and well-being\n\nThe document paints a picture of a widespread rental housing affordability crisis that has worsened during the pandemic period, affecting households across income levels but particularly impacting vulnerable populations.",
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          "page_range": "45-56",
          "summary": "Here's a summary of the key points from this document section about rental housing in America:\n\nMain Topics:\n\n1. Rental Assistance Programs\n- LIHTC (Low-Income Housing Tax Credit) and Housing Choice Vouchers are now the largest rental assistance programs\n- Project-based Section 8 serves 1.2 million households as of 2022\n- Housing Choice Vouchers assist 2.3 million renter households but face challenges with landlord participation\n\n2. State and Local Government Efforts\n- Increased use of multifamily housing bonds ($17.2 billion in 2020)\n- Growing adoption of rent regulation legislation\n- Zoning reforms to allow more multifamily housing construction\n- About 75% of land in major cities is zoned exclusively for single-family homes\n\n3. Evictions and Homelessness\n- Eviction filings returned to pre-pandemic levels after relief measures expired\n- Record-high homelessness with 653,100 people unhoused in 2023\n- Disproportionate impact on Black and Hispanic populations\n\n4. Climate and Energy Issues\n- Half of renters making under $30,000 experienced energy insecurity\n- Rental properties need significant energy efficiency upgrades\n- Climate-related disasters pose increasing risks to rental properties\n- Rising insurance costs affecting both property owners and renters\n\nKey Challenges:\n\n1. Affordability Crisis\n- Growing number of cost-burdened renters\n- Limited federal assistance availability\n- Need for expanded housing subsidies\n\n2. Supply Issues\n- Barriers to new construction\n- Need for more diverse housing types\n- Zoning restrictions limiting development\n\n3. Climate Resilience\n- Need for energy efficiency improvements\n- Rising costs from climate-related disasters\n- Insurance market challenges\n\nThe document emphasizes that while recent efforts have been made to address these challenges, a more comprehensive and sustained commitment from all levels of government and the private sector is needed to ensure affordable, safe housing for all residents.",
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    "processed_at": "2025-07-21T10:37:05.642371",
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  "3636455a-a1f3-405a-95bc-e7f6c3515b66": {
    "filename": "feature-scope-description-for-sap-successfactors-recruiting-english-v10-2024.pdf",
    "extracted_text": "--- Page 1 ---\n \n \n \nUser c1 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nFeature Scope Description | PUBLIC 2024-11-01 \nFeature Scope Description for SAP \nSuccessFactors Recruiting \n \n© 2024 SAP SE or an SAP affiliate company. All rights reserved. \n\n\n--- Page 2 ---\n2        PUBLIC \n \n \nFeature Scope Description for SAP SuccessFactors Recruiting \nAbout This Document \nContent \n1 \nAbout This Document .......................................................................................................................................................................................................... 3 \n2 \nFeatures......................................................................................................................................................................................................................................... 4 \n3 \nService Availability .............................................................................................................................................................................................................. 21 \n4 \nSecurity, Privacy and Compliance ............................................................................................................................................................................ 23 \n5 \nBrowser Support .................................................................................................................................................................................................................. 24 \n \n \n\n\n--- Page 3 ---\nFeature Scope Description for SAP SuccessFactors Recruiting \nAbout This Document \nPUBLIC            3 \n1 About This Document \nThis document describes the features that are available in SAP SuccessFactors Recruiting. \nThe availability of some of the features may depend on your license agreement with SAP.  \nTo illustrate integration with other SAP offerings, the product documentation on SAP Help \nPortal might include references to features that are not included with SAP SuccessFactors \nRecruiting Features that are not included in this feature scope description might require a \nseparate license.  \ni Note  \nThis document does not include any information about:  \n• \nPackages and pricing available for SAP SuccessFactors Recruiting. For more information, see SAP \nDiscovery Center. \n \n\n\n--- Page 4 ---\n4        PUBLIC \n \n \nFeature Scope Description for SAP \nSuccessFactors Recruiting \nFeatures \n2 Features  \nThis specifications document describes key features and functionalities of SAP SuccessFactors Recruiting, as of \nthe 2H 2024 Release.  \n \nSAP SuccessFactors Recruiting is comprised of three areas: \n• SAP SuccessFactors Recruiting Management \n• SAP SuccessFactors Recruiting Posting \n• SAP SuccessFactors Recruiting Marketing \n \n\n\n--- Page 5 ---\nFeature Scope Description for SAP SuccessFactors Recruiting \nKEY FEATURES AND FUNCTIONALITIES \nPUBLIC            5 \nKEY FEATURES AND FUNCTIONALITIES \n \nRecruiting Posting \nRecruiting Marketing \nRecruiting Management \n• User Experience and Interface \n• Admin self-service \n• Job Posting Content \n• User actions \n \n• Career Site Builder \n• Content pages \n• Category Pages \n• Job Pages \n• Email Alerts \n• Reporting dashboards \n• Campaigns \n• Data Capture forms \n• Talent Community \n• \nRequisition Management \n• \nCandidate Management \nincluding search options \n• \nApplication Management \n• \nOffer Approval \n• \nOffer Letter \n• \nInterview Scheduling \n• \nAgency Portal \n• \nMobile Recruiting \n• \nReporting  \n• \nThird-party Integration  \n \n\n\n--- Page 6 ---\n6        PUBLIC \n \n \nFeature Scope Description for SAP \nSuccessFactors Recruiting \nRECRUITING POSTING \nRECRUITING POSTING \nUser Experience and Interface \nThe SuccessFactors Recruiting Posting integration supports simplified job postings to job boards or school job \nboards in multiple languages and locations directly from the recruiting posting page. \n \nKey Feature \nDescription \nUI Consistency (BizX Wrapper) \nUI consistency from creation of job requisition to posting of \njob. \n \nAdmin self-service actions \nThrough Recruiting Posting, admin users directly manage many actions – configurations, permissions, rules, etc. - \nrelevant and useful for enabling good usage of Recruiting Posting.  \n \nKey Feature \nDescription \nJob board Marketplace \nThe marketplace lets Customers choose job boards, \nschool, and university boards – free or paid – they want \nto post their job requisitions on. They can also request \nthe addition of new job boards that are not currently part \nof the Recruiting Posting portfolio. \nManage job boards \nManage job boards, credentials, and contracts. \nPosting Rules \nAccelerate and simplify posting process for recruiters \nbased on job posting rules automatically selecting \nposting profile and job boards. \nPosting Field Completion \nAutomate the population of data from the job requisition \ninto job posting fields required by job boards. \nJob posting automation \nWhen posting rules and all posting field completion are \nset up, admin can configure automation of job posting \n(no recruiter action within Recruiting Posting needed) as \nsoon as job requisition is live on external career site. \n \nJob Posting Content \nKey Feature \nDescription \nCommon fields \nCommon fields typically required by all the selected job \nboards. The job requisition prepopulates these fields for \nthe job posting.  \nSpecific fields \nSpecific fields are only required for certain job boards. \nBoth the specific and the common fields are visible when \nrecruiters create a job posting. \n \nWhen a mandatory field is not correctly populated, a red \ncheckmark indicates that action is needed. \n\n\n--- Page 7 ---\nFeature Scope Description for SAP SuccessFactors Recruiting \nRECRUITING POSTING \nPUBLIC            7 \nMultilingual posting \nAbility for recruiters to create job postings in different \nlanguages for channels that support different languages. \nMulti location posting \nAbility for recruiters to create job postings with multiple \nlocations for channels that support posting with multiple \nlocations \nJobs reposting \nWhen the option is activated, recruiters can choose if yes \nor no, and how many times they want the job to be \nreposted after expiration (as long as it is live on external \ncareer site). \n \nUser Actions \nThe user experience benefits from the following actions. \n \nKey Feature \nDescription \nSelect & Add \nAbility for recruiters to select and add posting channels \n(job boards, schools, social networking.) \nUpdate \nAbility for recruiters to update job postings. When \nclicking « Update », the information is automatically \ntransferred to the posting channels. \nDelete \nAbility for recruiters to delete job postings on one, a few \nor all job posting channels. \nTracking \nRecruiting Posting allows the tracking of the candidate \nsource by adapting the URL used by candidates to \napply.  \n \nAbility for recruiters to check the performance of each \nchannel used directly in Recruiting Advanced Analytics \nsection. \n \n \n\n\n--- Page 8 ---\n8        PUBLIC \n \n \nFeature Scope Description for SAP \nSuccessFactors Recruiting \nRECRUITING MARKETING \nRECRUITING MARKETING \nCareer Site Builder  \nCareer Site Builder (“CSB”) allows a customer to build and optimize the front-end Web site for the Customer's \nrecruiting strategy. Site management is available through a non-technical UI to simplify the creation and updating \nof pages. CSB supports both external and internal career site configuration. \n \nKey Feature \nDescription \nCustomer Career Site \nAllows for the creation of a careers site hosted by SAP \nand designed with graphics and content provided by the \nCustomer. \nThe Customer can purchase its own domain name for the \ncareers site. \nDifferent page types allow for building an interactive \ncareers site with dedicated pages for specific content. \nJob Layouts can be created to enhance the experience \nof the candidate. \nHeaders and footers can be tailored to requirements. \nA rules editor within CSB allows control over content and \nlayouts used for display. \nContent can be controlled based on type of device to \nallow Customer to have different content available on a \nmobile vs a tablet or desktop view. \nContent can be configured specifically for external vs \ninternal career sites when using CSB. \nOut the box components are available, or custom \ncomponents can be built. \nJob Matching Using AI \nVisitors to the career site can upload their resume and \nautomatically see jobs that match their skills. The skills \ncloud on the job detail page helps them further \nunderstand how their skills match to help determine the \nbest fit jobs to apply to.  \n \nUse of this AI feature requires the purchase of SAP AI Units and \nis subject to separate documentation. Please review the SAP AI \nServices List in Cloud Service Specifications for details \nMobile Friendly \nUsing native functionality to design and render a Career \nSite helps to create a mobile-friendly experience. This \nfeature is also used in conjunction with Recruiting \nManagement to deliver mobile application functionality. \nSearch Engine Optimization \nEnables structure of the Career Site and rules used to \nhelp keep content fresh and to help enhance a search \nengine’s indexing of the site.  \nTalent Community Capture  \nAbility to capture a candidate’s information for the \npurposes of applicant source tracking, job marketing, \nanalytics, and talent community sourcing. \nLocalization & Translation Management \nUsing the Career Site Builder administration tool, Users \ncan add custom translation text for career site fields. \nUsing the Translation Editor, users can view and update \nthis text, as well as enter overriding text for all configured \nand supported languages. Customer can also update \ndefault wording for English language labels. \nBrand and Locale Management \nAll pages on Career Site Builder sites can be customized \nby brand or locale. This allows the Customer to create a \n\n\n--- Page 9 ---\nFeature Scope Description for SAP SuccessFactors Recruiting \nRECRUITING MARKETING \nPUBLIC            9 \ncandidate experience customized to its individual \nbrands, or specific countries where it recruits candidates. \nEmail Alerts & Campaigns \nAbility to create and send bulk email campaigns using \ncorporate branding guidelines.  \nPermissions \nCSB allows the permissioning of certain aspects to users, \nto control who has access to make changes to the site or \nbuild new pages, layouts, or rules. \nCookie Management \nGives ability to enable the cookie banner, which notifies \nvisitors of site’s use of cookies. Can also configure the \ncookie consent manager, allowing visitors to accept or \ndecline the use of specific cookies while visiting the \ncareer site. \n*Disclaimer: SuccessFactors Recruiting offers the technical ability for Customers to send emails to any number of \nrecipients (i.e., CRM (Candidate Relationship Management) features). Notwithstanding the foregoing, or anything in \nthe parties’ Agreement, SAP reserves the right to restrict the number of emails and/or the number of recipients per \nemail upon providing notice to Customer.  \n \nIn accordance with the Customer’s warranty in the Agreement, Customer must use the email functionality in \naccordance with all applicable laws and regulations. Furthermore, Customer agrees not to use the email \nfunctionality in a manner that may harm SAP, its customers or other third parties. As a result, upon SAP’s request, \nCustomer will change its email practices to avoid violating any interests harmed due to Customer’s apparent \nfailure to comply with such laws or regulations or due to its misuse of the email functionality. As an example, if \nCustomer’s email practices lead to blacklisting the Cloud Service URL and/or IP address, SAP may transfer the \nCustomer to a separate URL and/or IP address at Customer’s expense, or SAP may suspend the email feature \nuntil the parties have agreed on a reasonable email practice that is appropriate for a Cloud Service offering in a \nmulti-tenant environment.  \n \nCustomer may not rely on the unrestricted use of the feature. SAP may further restrict (technically or \ncommercially) the usage of the email feature to its customers by providing thirty (30) days advance written notice \n(email permitted) to some or all affected customers using the email feature of the Cloud Service or IP address. \n \nTalent Community \nRecruiting Marketing allows Career Site visitors to join the Customer’s private Talent Community. Members of the \nTalent Community receive future job notifications when job opportunities match their interests. \n \nKey Feature \nDescription \nAutomated Job Alert Creation \nAbility to gather candidate interests on the Career Site \nbased on their interaction and behavior on the site, \nsubject to an applicable privacy policy (or similar \ndocument) or consent, as required. \nJob Marketing \nProvides the functionality that matches the \"User Agents\" \nto new job openings and notifies the candidate via email \nwith a direct link to the Job Opportunity. \n \n \n\n\n--- Page 10 ---\n10        PUBLIC \n \n \nFeature Scope Description for SAP \nSuccessFactors Recruiting \nRECRUITING MARKETING \nRecruiting Dashboard & Reporting \nSAP SuccessFactors Recruiting Marketing includes a Recruiting Dashboard. \n \nKey Feature \nDescription \nReporting \nAbility to view basic site activity, e.g., visitor traffic, mobile \ntraffic, and e-mail engagement activity in both \naggregated and detail form \nSource Report \nAbility to see which sources/engines are driving traffic \nand apply conversions on the Career Site. \nURL Builder \nAbility to create trackable URLs to drive candidates to \nspecific jobs or pages on the careers site. \nAdvanced Analytics \nCombines SAP SuccessFactors Recruiting Marketing \nsource data with SAP SuccessFactors Recruiting \nManagement application data to provide anonymous \nconversion and optimization metrics.  \n \n\n\n--- Page 11 ---\nFeature Scope Description for SAP SuccessFactors Recruiting \nRECRUITING MANAGEMENT \nPUBLIC            11 \nRECRUITING MANAGEMENT \nRequisition Management \n \nKey Feature \nDescription \nCreate & Copy Requisitions \nAllows users to create a new requisition by selecting a \njob code or role from a job template library (which will \nprepopulate some fields), copy an existing requisition or \ncreate from an empty template. \nDifferent templates allow different data or processes to \nbe driven based on criteria such as country or type of \nposition.  \nEvergreen requisition feature allows the company to \ngenerate a pool of potential candidates for future \nopenings and link these to hiring requisitions. \nIntegration between Position Management and \nRecruitment Management \nProvides a job profile for the requisition created and \nprepopulates the requisition details.  \nJob Profile Builder Integration \nJob Profile Builder Integration populates job requisitions \nwith pre-defined Job Profile content set up by an \nadministrator. This pre-population results in consistency \nand professionalism in job requisitions. \nJob Description Enhancement Using AI \n \nUsers can now enhance and generate the job \ndescription using generative AI capabilities. \n \nUse of this AI feature requires the purchase of SAP AI Units and \nis subject to separate documentation. Please review the SAP AI \nServices List in Cloud Service Specifications for details \nRequisition Approval Workflow \nConfigurable workflow for requisition approval supports \niterative, collaborative, and consecutive workflows, \nwhere routing options can be mixed and matched, and \nwhere ad hoc approvers may be added to the route \nmap. \nAutomated notifications and prompts within \nSuccessFactors are available to assist users. \nCustom Fields \nRequisitions support the use of Customer-defined fields. \nJob Posting \nRequisitions can be posted through the Recruiting \nManagement tool to several locations. \n \nThe locations where requisitions can be posted through \nthe Recruiting Management tool are: \n• \nInternal career site \n• \nExternal career sites \n• \nPrivate postings \n• \nJob boards \n• \nAgencies \nAllows Users to create a local specific URL that can be \nused for a candidate to apply directly to a position \nwithout it being posted on a careers site or elsewhere. \n\n\n--- Page 12 ---\n12        PUBLIC \n \n \nFeature Scope Description for SAP \nSuccessFactors Recruiting \nRECRUITING MANAGEMENT \nPosting can be automated using business rules and/or \nrecruiting profiles with Recruiting Posting. \nCompetency Library \nIncludes a standard competency library, or a library can \nbe created or imported from a third party. These \ncompetencies can be used to populate requisitions \nwhen they are assigned to roles and used to rate \napplicants as part of the interview process. \nPrescreening  \nUsers can define pre-screen questions presented to \napplicants at the point of application. These pre-screen \nquestions can be used to gather information, score \napplicants, and automatically disqualify applicants who \nmeet certain criteria. \nUser Permissions \nControls who can view requisitions and what fields they \ncan view and edit. \nTemplate permissions or Role Based Permissions that \ncontrol the actions that users can do or the data they \nhave access to within the system. \nRecruiting Operators, Recruiting Teams and Recruiting \nGroups allow additional control within requisition, \ncandidate, and application management \nBusiness Rules Automation \nAllows Users to create Customer-specific rules to \nsupport their business processes. \n \nThe Customer can create several types of rules, that are \ntriggered either on initiation, on save or on change. Rules \nare supported on the job requisition, job application, job \noffer and to update applicant status based on certain \nactions. Customers can also create rules to display on \nscreen messages to recruiting users. \nTalent Pools \nAbility for users to create a group of candidates, \nemployees, or new prospects for a specific purpose. \nTalent pools can be used to pipeline candidates through \na customized process, group candidates for an email \ncampaign, or keep track of candidates interested in a \nspecific type of event or job opportunity. \nLanguage Packs and Translations  \nAbility to use the system in multiple languages, post jobs \nin different languages and provide translated career \nsites and application process. \nIntegration Center \nAbility to build, run, schedule, and monitor simple \nintegrations. Predefined templates are available, and \nusers can create their own templates. \nCheck Tool \nThe check tool helps to identify and resolve issues when \nthe system does not work as expected. \nOData API \nThe HCM Suite OData API is the SAP SuccessFactors \nWeb Services API. The API is data oriented. The API is \nbest used for frequent or real-time requests for small \namounts of data. Large data requests are better handled \nby batch FTP processes \nData Protection and Privacy \nSAP SuccessFactors Recruiting includes comprehensive \ndata protection and privacy features that are common to \nthe entire SAP SuccessFactors HCM Suite. \nData Retention Management in Recruiting allows you to \ndefine how long candidate and job application data is \nstored before it can be removed. \n\n\n--- Page 13 ---\nFeature Scope Description for SAP SuccessFactors Recruiting \nRECRUITING MANAGEMENT \nPUBLIC            13 \nDocument Management \nSAP SuccessFactors document management tools \nenable administrators to manage document attachments \ncentrally for the HCM Suite. Administrators can use \ndocument management tools to view and manage \ndocuments centrally and to configure document storage \nsettings. \nFoundation and Generic Objects \nSupported within recruiting on the requisition, offer, \nprofile and application templates to allow data flow \nto/from other modules. \nSMS (Short Message Service) \nNotifications sent to applicants about scheduled \ninterviews and ad-hoc.  Can use predefined template or \ncreate on the fly. \nQualtrics  \nAllows the ability to add a feedback opportunity on the \njob application confirmation page that appears after a \ncandidate successfully submits a job application. \nAllows the ability to add JavaScript code in Career Site \nBuilder to add a Qualtrics feedback tab to all your career \nsite pages, or to a specific career site page. \n \nCandidate Management \n \nKey Feature \nDescription \nCareer Sites \nAllows Users to create an external and internal careers \npage that hosts the list of open jobs (posted \nrequisitions) and allows candidates to fill out an \napplication to show their interest in a particular job. \nTopic-sensitive microsites available. \nConfigurable search criteria can be defined for external \nvs. internal careers sites. \nJob Alerts \nCandidates can save job searches and schedule regular \nemail notifications to inform them of all or newly \nmatched jobs. \nConfigurable Workflows \nAbility to set up stages in the application workflow, and \ndefine features such as automatic email notifications, \ncandidate-facing labels, and visibility into applicant data \nfor each stage. \nData captured from an applicant can be driven by \ncountry of the job or stage in the pipeline. \nCandidates can be invited to apply for a job at any stage \nof the process. \nSelection Permissions \nAbility to set permissions to limit who can view and \nchange the status of candidates in each stage of the \nselection process. \nApplicant Workbench \nAbility to filter and search across applicants to a specific \njob, based on fields defined by an administrator. \nIncludes search by keyword in CV and Cover Letter and \nfields defined in the application and candidate profile \ntemplate based on configuration. \n  \nAI-Assisted Skills Matching can be used to assist in the \nscreening process and show insights into skills matched \nbetween job requisition and candidate applications.  \n\n\n--- Page 14 ---\n14        PUBLIC \n \n \nFeature Scope Description for SAP \nSuccessFactors Recruiting \nRECRUITING MANAGEMENT \n \nUse of this AI feature requires the purchase of SAP AI Units and \nis subject to separate documentation. Please review the SAP AI \nServices List in Cloud Service Specifications for details \nBulk Actions \nAbility to take the same action on multiple applications, \nsuch as emailing candidates, or moving candidates from \none stage to another. \nEmployee Referral \nEmployee Referral tracks the referring employee and \nsource of referral for new candidates. Employees who \nhave referred a candidate can view the status of their \nreferrals currently in the hiring process. Employees can \nsubmit candidates to jobs directly or by e-mailing the \ncandidate. \nCorrespondence Templates \nAllows users to create customized email templates for \ncommunicating with candidates and internal participants \nin the recruiting process. These templates can be set up \nto automatically be sent out at configured stages of the \nselection process or sent manually.  \nTemplates can be translated into multiple languages to \nsupport the local of the user or recipient.  \nAccess to use a template is some areas is covered by \nRBP (Role Based Permissions) \nAssessment \nAllows users to create online prescreening questions as \npart of the application process, and optionally set up \nweightings to rank the applicants based on total \nprescreen score.  \nIncludes support for automatic disqualification of \napplicants based on their answers. \nInterview Scheduling \nInterview Scheduling allows recruiting users to enter \navailability directly into the system so that interviews \nwith applicants can be easily scheduled by other users, \nor by candidates via self-scheduling. \nSuccessFactors can be configured to integrate directly \nwith Microsoft Outlook using Modern Authentication. \nInterviews can be updated, rescheduled, or cancelled \nand automated notifications sent to internal users and \napplicants. \nSuccessFactors can be configured to integrate with \nMicrosoft Teams, allowing a Teams invite to be included \nin the confirmation. \nCompetency-Based Candidate Ratings \nAllows Users to base candidate interview ratings on \ncompetencies and skills, as defined by the job \nrequisition. Allows for an overall candidate rating and \ninterviewer comments. \nInterview Questions Generation Using AI and \nApplicant Evaluation in Microsoft Teams \nInterviewers can generate interview questions based on \nthe job description using the generative AI capability and \nevaluate the applicant after the interview is complete in \nMicrosoft Teams. \nOffer Approval \nOnce a recruiter, hiring manager, or other authorized user \ndecides to hire a candidate to fill a job requisition, the \noffer process consists of assembling details of the offer \nthat will be extended to the candidate, routing these \ndetails for approval, generating an offer letter using \ntokens from the requisition, application and offer details \nform and extending an offer letter to a candidate. \nBusiness Rules can be used to help calculate data or \n\n\n--- Page 15 ---\nFeature Scope Description for SAP SuccessFactors Recruiting \nRECRUITING MANAGEMENT \nPUBLIC            15 \nprepopulate data into offer approval template fields. \nPredefined approval can be set-up per template, or ad-\nhoc approval is supported. \nBusiness Rules can be used to pre-select the correct \nOffer template. \nOffer Letter Templates \n \nPermissions allow control over who can create an offer. \nAllows users to create customized offer templates for \nextending offers to candidates. \nAccess to templates can be controlled using Role Based \npermissions. \nBusiness Rules can be used to pre-select the correct \nOffer template. \nSpecial tokens can be used to add paragraphs of text \nbased on Business Rules. \nOffer letters can be sent as a PDF attachment, verbal \noffer or as an email. \nOnline Offer  \nOnline Offer with eSignature \nA secure online portal where offer letters can be sent \nand candidates can login and accept, decline, or ask a \nquestion.  \nIf using online offer with eSignature, allows for an \nintegration with SAP Signature Management by DocuSign \nCandidate Relationship Management \nFeatures include Talent Pools, Data Capture Forms, \nEmail Campaigns, Landing Pages, and Activity Tracking. \nMessage Centre allows email correspondence within \nSuccessFactors between a candidate and user. \nResume Parsing \nWhen creating an account, the candidate can upload \ntheir CV and the data can automatically populate fields \nwithin the profile. \nAI-Assisted Skills Validation for Applicants \nAI-assisted skills validation allows applicants to add and \nmanage skills that they want to share with the recruiter, \nas part of their application. \n \nUse of this AI feature requires the purchase of SAP AI Units and \nis subject to separate documentation. Please review the SAP AI \nServices List in Cloud Service Specifications for details \nData Migration \nSuccessFactors supports an initial load of data in the \ncorrect format of requisitions, candidate data including \nattachments and application data including attachments. \nManaging Duplicate Candidate Profiles \nCandidates sometimes create more than one candidate \nprofile in Recruiting. In such situations, you can merge \nthe profiles into a single profile. \nJob Analyzer for Recruiting \nThe Job Analyzer is designed to help you create the best \njob description possible by providing salary and \nlanguage recommendations. This unique capability is \nmade possible using machine learning techniques, \ncombined with historical applicant data to determine \nany gender-biased language. \n* In support of eSignature, SAP Signature Management by DocuSign is an optional integration, with additional \nSupplemental Terms and subscription required.  \n\n\n--- Page 16 ---\n16        PUBLIC \n \n \nFeature Scope Description for SAP \nSuccessFactors Recruiting \nRECRUITING MANAGEMENT \n \nCandidate/Resume Search \nKey Feature \nDescription \nBoolean Search \nEnables search for candidates using advanced Boolean \ncriteria. \nWizard-style Search Builder \nAllows Users to create, save and share (with other Users \nwith proper permissions) candidate searches using a \nwizard-style interface. \nTags \nAbility to tag candidates with customized attributes and \nsearch for candidates with those tags. \nOFCCP Compliance \nAbility to create, save and report on candidate searches \nin a way that helps support OFCCP compliance*. \nPermission to Search \nSearch of candidates can be controlled based on \npreferences set by the applicant when creating a profile \nCandidate Forwarding \nProfiles of candidates can be forwarded directly to \ncolleagues or job requisitions for consideration.  \nConfiguration within the system gives control over what \ndata can be forwarded.  \nCandidate Search Audit \nAbility to report on search criteria, number of results, the \nrelated requisition the language of the search, whether \nthe search was on internal or external candidates, the \ndate of the search, who performed the search, every \ncandidate returned in the search and the action taken \nbecause of the search (email or forward.) \nVETS100 Reporting \nSuccessFactors also provides a pre-built file ready \nVETS100 report that can be set up in a client’s instance \nupon request \n*OFCCP- Office of Federal Contract Compliance Programs, which are used by companies doing business with the \nUS government. \n \nAgency \nKey Feature \nDescription \nAgency Functionality \nThe Customer may work with recruiting agencies that are \nused to source and submit applicants for certain jobs. An \nadmin may set up new agencies and agency Users who \ncan then log in through the agency portal. \n \nEnabling the agency feature provides a separate portal \nfor External Recruiting Agencies. Allows external \nagencies and recruiters to create and see their \ncandidates, see job requisitions open for agency access \nand forward candidates to those job requisitions. \n\n\n--- Page 17 ---\nFeature Scope Description for SAP SuccessFactors Recruiting \nRECRUITING MANAGEMENT \nPUBLIC            17 \n \nHire & Onboard \nKey Feature \nDescription \nEmployee Central (SAP SuccessFactors Recruiting \nManagement to SAP Employee Central (EC) \nIntegration) \n \nThe Recruiting Management to SAP SuccessFactors \nEmployee Central Integration supports the seamless \ntransition of an external candidate record into a new \nemployee account, including issuing an employee ID. \nSAP ERP Human Capital Management (SAP ERP \nHCM) New Hire Integration \n \nSAP provides new hire integration for the Customer using \nboth SAP ERP Human Capital Management (SAP ERP \nHCM) and Recruiting Management via an integration \npack. \n \nThe integration pack allows the transfer of hired \napplicant data from SAP SuccessFactors into SAP ERP \nHCM. \nSAP SuccessFactors Onboarding Integration \nThe Recruiting Management to SAP SuccessFactors \nOnboarding Integration provides a seamless way to \ntransition an External Candidate record into Onboarding. \n \n \n \n\n\n--- Page 18 ---\n18        PUBLIC \n \n \nFeature Scope Description for SAP \nSuccessFactors Recruiting \nRECRUITING MANAGEMENT \nMobile Recruiting \n \nKey Feature \nDescription \nRequisition Approvals \nUsers with mobile access and proper permissions (as \ndefined by the system administrator) can view and \napprove requisitions on a mobile device. \nInterview Feedback \nInterviewers can rate candidates based on \ncompetencies and skills associated with the job. Allows \nfor a thumbs-up or thumbs-down rating as well as free \nform comments using a mobile device, which are then \npushed back into the recruiting system where they can \nbe viewed by those with the correct permissions. \nOffer Approvals \nUsers with mobile access and proper permissions (as \ndefined by the system administrator), can view, and \napprove candidate offers on a mobile device. \nSupport for Multiple Mobile Platforms with Native \nMobile Applications \nMobile Recruiting features are supported on iOS and \nAndroid platforms after accepting and subject to the \nstandard applicable mobile terms and conditions \nprovided before download of the application, as \nupdated from time to time. \nPush notification \nPush Notifications are available for Providing interview \nfeedback tasks, Job Requisition Approval requests and \nJob Offer Approval requests. \n \nRecruiting Reporting/Analysis \n \nKey Feature \nDescription \nStandard Reports \nProvides nine out-of-the-box, standard recruiting reports \nincluding information that helps support OFCCP*. \nAd Hoc Reports \nStandard and custom fields are available in an ad hoc \nreport tool, where Users with appropriate permissions \nmay construct reports by selecting various available \ncolumns and filters. \nCustom Reports \nUsers with the proper permissions can create custom \nrecruiting reports based on SAP SuccessFactors \nRecruiting Management data. \nPrint and Go Pack \nInterviewers (and team members) can print a selection \nof applicants and competency information to be used \nduring the interview process. \nAudit Trail Reports \nTracks changes (by User, date, and time) to candidate, \nrequisition and offer status. \n*OFCCP- Office of Federal Contract Compliance Programs, which are used by companies doing business with the \nUS government. \n \n \n\n\n--- Page 19 ---\nFeature Scope Description for SAP SuccessFactors Recruiting \nRECRUITING MANAGEMENT \nPUBLIC            19 \nThird-Party Integration \n \nKey Feature \nDescription \nAssessment Integration \nIntegration with several assessment providers – details \navailable on SAP \nIntegration with SAP Signature Management by \nDocuSign \nSupport online offers with eSignature which allows a \ncandidate to digitally sign an offer letter*. \nIntegration to First Advantage \nIntegrated to use First Advantage for background \nchecking*. \nIntegration to other Background Checking \nplatforms \nIntegrated to use the Dell Boomi integration platform for \nthird party background checking providers*. \nJob Board Integration \nPost requisitions to selected job boards. \n* These features are not included with SAP SuccessFactors Recruiting Management and can be subscribed to for \nan additional fee. \n\n\n--- Page 20 ---\n20        PUBLIC \n \n \nFeature Scope Description for SAP \nSuccessFactors Recruiting \nTRADEMARK INFORMATION \nTRADEMARK INFORMATION \n• First Advantage® is a registered trademark of the First Advantage Corporation \n• \niOS® is a registered trademark of Apple, Inc. \n• \nAndroid® is a registered trademark of Google, Inc. \n• \nDell Boomi® is a registered trademark of Boomi, Inc \n• \nDocuSign® is a registered trademark of DocuSign \n \n\n\n--- Page 21 ---\nFeature Scope Description for SAP SuccessFactors Recruiting \nService Availability \nPUBLIC            21 \n3 Service Availability  \nThis section describes the service availability aspects.  \n \nAvailability \nAspect \nDescription \nRegions \nSee SAP Discovery Center \nInfrastructure \nRegions \nWe run on several underlying Infrastructure-as-a-Service technologies and regions. Some are \nowned by SAP, and some are owned by our partner infrastructure providers, including \nMicrosoft Azure, Google Cloud Platform, and Converged Cloud (SAP) \nAvailability  \nService Availability is a customer contractual commit that is pegged at 99.7%  \nThis would imply that our services / product will be available for the customer to use with an \nuptime of our Core Product for ≥ 99.7% of the times \nSAP Trust Center is the trusted document reference for SLA which is also visible to the \ncustomers  SERVICE LEVEL AGREEMENT FOR CLOUD SERVICES \nEnvironments \nCloud Foundry environment. \nLanguages \nThe web-based administration user interface is available in the following languages:  \n• \nArabic  \n• \nBulgarian  \n• \nCatalan  \n• \nChinese (China - simplified)  \n• \nChinese (Taiwan)  \n• \nCroatian  \n• \nCzech  \n• \nDanish  \n• \nDutch  \n• \nEnglish (Great Britain)  \n• \nEnglish (United States of America)  \n• \nEstonian  \n• \nFinnish  \n• \nFrench (France)  \n• \nFrench (Canada)  \n• \nGerman (Germany)  \n• \nGerman (Switzerland)  \n• \nGreek  \n• \nHebrew  \n• \nHindi  \n• \nHungarian  \n• \nIndonesian  \n• \nItalian  \n\n\n--- Page 22 ---\n22        PUBLIC \n \n \nFeature Scope Description for SAP \nSuccessFactors Recruiting \nService Availability \n• \nItalian (Switzerland)  \n• \nJapanese  \n• \nKorean  \n• \nLatvian  \n• \nLithuanian  \n• \nMalay  \n• \nNorwegian  \n• \nPolish  \n• \nPortuguese (Brazil)  \n• \nPortuguese (Portugal)  \n• \nRomanian  \n• \nRussian  \n• \nSerbian (Latin)  \n• \nSlovak  \n• \nSlovenian \n• \nSpanish (Spain)  \n• \nSpanish (Mexico) \n• \nSwedish  \n• \nThai  \n• \nTurkish \n• \nUkrainian \n• \nVietnamese  \n• \nWelsh \nThe SAP SuccessFactors documentation on SAP Help Portal is available in the \nfollowing languages: \n• \nEnglish \n \nAccessibility SAP SuccessFactors’ design and development guidelines for its software cover the Web Content \nAccessibility Guidelines 2.1 Level A and AA, US Section 508, and the EN 301 549 Chapter 9, 10 \nand 11. \nAdditional accessibility information can be found in our Customer Success Accessibility Hub. \n \n\n\n--- Page 23 ---\nFeature Scope Description for SAP SuccessFactors Recruiting \nSecurity, Privacy and Compliance \nPUBLIC            23 \n4 Security, Privacy and Compliance \nSAP fosters trust through responsible actions in the context of security, privacy, compliance and \ntransparency. We build secure-by-design solutions, help you meet regulatory and compliance \nrequirements, collect and process personal data lawfully. SAP SuccessFactors Recruiting ensures cloud \ncompliance, security and privacy at multiple levels.  \nSecurity \nSAP protects businesses’ applications and data by building, running, and maintaining more-secure \noperations. \nSee our security measures to help protect your data's integrity, availability, and confidentiality and \nexplore security products and services from SAP here. \nSAP is committed to delivering trustworthy products and cloud services. Secure configuration is \nessential to ensuring secure operations and data integrity. We have therefore documented security \nrecommendations that are consolidated in this one place to help you configure the best in security for \nyour SAP portfolio. You can access the SAP SuccessFactors HCM Suite Security Recommendations \nhere. \nPrivacy \nSAP SuccessFactors Recruiting follows SAP's global Data Protection and Privacy (DPP) \nguidelines. You can find more information on the guidelines here. \nSAP constantly improves upon Technical and organizational measures (TOMs) for Cloud Services to \nprotect the data we process on behalf of customers against unauthorized access, change, or deletions. \nFurthermore, you can access the Data Processing Agreement for Cloud Services (DPA) for your region \nhere. \nYou can also access our Data Transfer Fact Sheets and Sub-processor lists here. \nAdditionally, you can learn about data protection and privacy capabilities available in the SAP \nSuccessFactors HCM Suite here. \nCompliance  \nAt SAP, we keep our finger on the pulse of ever-increasing security challenges by building a security \nfoundation based on industry standards and compliance and regulatory requirements. View SAP’s \nlatest security compliance offerings and reports.  \nTo access our Certificates, Reports, and Attestations, please visit our SAP Compliance Offerings.  \nVisit My Trust Center \nMy Trust Center, an area within SAP Support Portal for SAP Trust Center, extends the public offering by \ngranting access to additional documentation available only to SAP customers and partners with a valid \nSAP user ID. You can access My Trust Center here. \n \n\n\n--- Page 24 ---\n24        PUBLIC \n Feature Scope Description for SAP SuccessFactors \nRecruiting \nBrowser Support \n \n5 Browser Support \nOverview of the browser support.  \nFor the UIs of the service, the following browsers are supported on Microsoft Windows PCs \nand, where mentioned below, on macOS:  \nBrowser \nVersions  \nGoogle Chrome \nLatest version  \nMozilla Firefox \nLatest version  \nMicrosoft Edge \nLatest version  \nSafari \nLatest version (for macOS only)  \nFor additional information, please view our Desktop Browsers and Browser Configuration \nRequirements support page.  \n \nFor mobile browsers:  \nBrowser \nVersions  \nGoogle Chrome for \nAndroid \nLatest version  \nGoogle Android default \nbrowser \nLatest version  \nSafari for iOS \nLatest version (for macOS only)  \n \nFor additional information, please view our Mobile Browser support page.\ni Note \nInternet Explorer 11 or lower versions are not supported. \n\n\n--- Page 25 ---\nFeature Scope Description for SAP SuccessFactors Recruiting \nImportant Disclaimers and Legal Information \nPUBLIC            25 \nImportant Disclaimers and Legal Information \nHyperlinks  \nSome links are classified by an icon and/or a mouseover text. These links provide additional information.  \nAbout the icons:  \n• \nLinks with the icon\n: You are entering a Web site that is not hosted by SAP. By using such links, you agree \n(unless expressly stated otherwise in your agreements with SAP) to this:  \n• \nThe content of the linked-to site is not SAP documentation. You may not infer any product claims \nagainst SAP based on this information.  \n• \nSAP does not agree or disagree with the content on the linked-to site, nor does SAP warrant the \navailability and correctness. SAP shall not be liable for any damages caused by the use of such \ncontent unless damages have been caused by SAP's gross negligence or willful misconduct.  \n• \nLinks with the icon \n: You are leaving the documentation for that particular SAP product or service and are \nentering an SAP-hosted Web site. By using such links, you agree that (unless expressly stated otherwise in your \nagreements with SAP) you may not infer any product claims against SAP based on this information.  \nVideos Hosted on External Platforms  \nSome videos may point to third-party video hosting platforms. SAP cannot guarantee the future availability of videos \nstored on these platforms. Furthermore, any advertisements or other content hosted on these platforms (for example, \nsuggested videos or by navigating to other videos hosted on the same site), are not within the control or responsibility of \nSAP.  \nBeta and Other Experimental Features  \nExperimental features are not part of the officially delivered scope that SAP guarantees for future releases. This means that \nexperimental features may be changed by SAP at any time for any reason without notice. Experimental features are not for \nproductive use. You may not demonstrate, test, examine, evaluate or otherwise use the experimental features in a live \noperating environment or with data that has not been sufficiently backed up.  \nThe purpose of experimental features is to get feedback early on, allowing customers and partners to influence the future \nproduct accordingly. By providing your feedback (e.g. in the SAP Community), you accept that intellectual property rights \nof the contributions or derivative works shall remain the exclusive property of SAP.  \nExample Code  \nAny software coding and/or code snippets are examples. They are not for productive use. The example code is only \nintended to better explain and visualize the syntax and phrasing rules. SAP does not warrant the correctness and \ncompleteness of the example code. SAP shall not be liable for errors or damages caused by the use of example code \nunless damages have been caused by SAP's gross negligence or willful misconduct.  \nBias-Free Language  \nSAP supports a culture of diversity and inclusion. Whenever possible, we use unbiased language in our documentation to \nrefer to people of all cultures, ethnicities, genders, and abilities.  \n \n \n\n\n--- Page 26 ---\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n© 2024 SAP SE or an SAP affiliate company. All rights reserved.  \nNo part of this publication may be reproduced or transmitted in any form or for \nany purpose without the express permission of SAP SE or an SAP affiliate \ncompany. The information contained herein may be changed without prior \nnotice.  \nSome software products marketed by SAP SE and its distributors   \ncontain proprietary software components of other software vendors.  National \nproduct specifications may vary.  \nThese materials are provided by SAP SE or an SAP affiliate company for \ninformational purposes only, without representation or warranty of any kind, \nand SAP or its affiliated companies shall not be liable for errors or omissions \nwith respect to the materials. The only warranties for SAP or SAP affiliate \ncompany products and services are those that are set forth in the express \nwarranty statements accompanying such products and services, if any. \nNothing herein should be construed as constituting an additional warranty.  \nSAP and other SAP products and services mentioned herein as well as their \nrespective logos are trademarks or registered trademarks of SAP SE (or an SAP \naffiliate company) in Germany and other countries. All   \nother product and service names mentioned are the trademarks of their \nrespective companies.  \nPlease see https://www.sap.com/about/legal/trademark.html for additional \ntrademark information and notices.",
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        "text": "--- Page 1 ---\n \n \n \nUser c1 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nFeature Scope Description | PUBLIC 2024-11-01 \nFeature Scope Description for SAP \nSuccessFactors Recruiting \n \n© 2024 SAP SE or an SAP affiliate company. All rights reserved. \n\n\n\n--- Page 2 ---\n2        PUBLIC \n \n \nFeature Scope Description for SAP SuccessFactors Recruiting \nAbout This Document \nContent \n1 \nAbout This Document .......................................................................................................................................................................................................... 3 \n2 \nFeatures......................................................................................................................................................................................................................................... 4 \n3 \nService Availability .............................................................................................................................................................................................................. 21 \n4 \nSecurity, Privacy and Compliance ............................................................................................................................................................................ 23 \n5 \nBrowser Support .................................................................................................................................................................................................................. 24 \n \n \n\n\n\n--- Page 3 ---\nFeature Scope Description for SAP SuccessFactors Recruiting \nAbout This Document \nPUBLIC            3 \n1 About This Document \nThis document describes the features that are available in SAP SuccessFactors Recruiting. \nThe availability of some of the features may depend on your license agreement with SAP.  \nTo illustrate integration with other SAP offerings, the product documentation on SAP Help \nPortal might include references to features that are not included with SAP SuccessFactors \nRecruiting Features that are not included in this feature scope description might require a \nseparate license.  \ni Note  \nThis document does not include any information about:  \n• \nPackages and pricing available for SAP SuccessFactors Recruiting. For more information, see SAP \nDiscovery Center. \n \n\n\n\n--- Page 4 ---\n4        PUBLIC \n \n \nFeature Scope Description for SAP \nSuccessFactors Recruiting \nFeatures \n2 Features  \nThis specifications document describes key features and functionalities of SAP SuccessFactors Recruiting, as of \nthe 2H 2024 Release.  \n \nSAP SuccessFactors Recruiting is comprised of three areas: \n• SAP SuccessFactors Recruiting Management \n• SAP SuccessFactors Recruiting Posting \n• SAP SuccessFactors Recruiting Marketing \n \n\n\n\n--- Page 5 ---\nFeature Scope Description for SAP SuccessFactors Recruiting \nKEY FEATURES AND FUNCTIONALITIES \nPUBLIC            5 \nKEY FEATURES AND FUNCTIONALITIES \n \nRecruiting Posting \nRecruiting Marketing \nRecruiting Management \n• User Experience and Interface \n• Admin self-service \n• Job Posting Content \n• User actions \n \n• Career Site Builder \n• Content pages \n• Category Pages \n• Job Pages \n• Email Alerts \n• Reporting dashboards \n• Campaigns \n• Data Capture forms \n• Talent Community \n• \nRequisition Management \n• \nCandidate Management \nincluding search options \n• \nApplication Management \n• \nOffer Approval \n• \nOffer Letter \n• \nInterview Scheduling \n• \nAgency Portal \n• \nMobile Recruiting \n• \nReporting  \n• \nThird-party Integration  \n \n\n\n\n--- Page 6 ---\n6        PUBLIC \n \n \nFeature Scope Description for SAP \nSuccessFactors Recruiting \nRECRUITING POSTING \nRECRUITING POSTING \nUser Experience and Interface \nThe SuccessFactors Recruiting Posting integration supports simplified job postings to job boards or school job \nboards in multiple languages and locations directly from the recruiting posting page. \n \nKey Feature \nDescription \nUI Consistency (BizX Wrapper) \nUI consistency from creation of job requisition to posting of \njob. \n \nAdmin self-service actions \nThrough Recruiting Posting, admin users directly manage many actions – configurations, permissions, rules, etc. - \nrelevant and useful for enabling good usage of Recruiting Posting.  \n \nKey Feature \nDescription \nJob board Marketplace \nThe marketplace lets Customers choose job boards, \nschool, and university boards – free or paid – they want \nto post their job requisitions on. They can also request \nthe addition of new job boards that are not currently part \nof the Recruiting Posting portfolio. \nManage job boards \nManage job boards, credentials, and contracts. \nPosting Rules \nAccelerate and simplify posting process for recruiters \nbased on job posting rules automatically selecting \nposting profile and job boards. \nPosting Field Completion \nAutomate the population of data from the job requisition \ninto job posting fields required by job boards. \nJob posting automation \nWhen posting rules and all posting field completion are \nset up, admin can configure automation of job posting \n(no recruiter action within Recruiting Posting needed) as \nsoon as job requisition is live on external career site. \n \nJob Posting Content \nKey Feature \nDescription \nCommon fields \nCommon fields typically required by all the selected job \nboards. The job requisition prepopulates these fields for \nthe job posting.  \nSpecific fields \nSpecific fields are only required for certain job boards. \nBoth the specific and the common fields are visible when \nrecruiters create a job posting. \n \nWhen a mandatory field is not correctly populated, a red \ncheckmark indicates that action is needed. \n\n\n\n--- Page 7 ---\nFeature Scope Description for SAP SuccessFactors Recruiting \nRECRUITING POSTING \nPUBLIC            7 \nMultilingual posting \nAbility for recruiters to create job postings in different \nlanguages for channels that support different languages. \nMulti location posting \nAbility for recruiters to create job postings with multiple \nlocations for channels that support posting with multiple \nlocations \nJobs reposting \nWhen the option is activated, recruiters can choose if yes \nor no, and how many times they want the job to be \nreposted after expiration (as long as it is live on external \ncareer site). \n \nUser Actions \nThe user experience benefits from the following actions. \n \nKey Feature \nDescription \nSelect & Add \nAbility for recruiters to select and add posting channels \n(job boards, schools, social networking.) \nUpdate \nAbility for recruiters to update job postings. When \nclicking « Update », the information is automatically \ntransferred to the posting channels. \nDelete \nAbility for recruiters to delete job postings on one, a few \nor all job posting channels. \nTracking \nRecruiting Posting allows the tracking of the candidate \nsource by adapting the URL used by candidates to \napply.  \n \nAbility for recruiters to check the performance of each \nchannel used directly in Recruiting Advanced Analytics \nsection. \n \n \n\n\n\n--- Page 8 ---\n8        PUBLIC \n \n \nFeature Scope Description for SAP \nSuccessFactors Recruiting \nRECRUITING MARKETING \nRECRUITING MARKETING \nCareer Site Builder  \nCareer Site Builder (“CSB”) allows a customer to build and optimize the front-end Web site for the Customer's \nrecruiting strategy. Site management is available through a non-technical UI to simplify the creation and updating \nof pages. CSB supports both external and internal career site configuration. \n \nKey Feature \nDescription \nCustomer Career Site \nAllows for the creation of a careers site hosted by SAP \nand designed with graphics and content provided by the \nCustomer. \nThe Customer can purchase its own domain name for the \ncareers site. \nDifferent page types allow for building an interactive \ncareers site with dedicated pages for specific content. \nJob Layouts can be created to enhance the experience \nof the candidate. \nHeaders and footers can be tailored to requirements. \nA rules editor within CSB allows control over content and \nlayouts used for display. \nContent can be controlled based on type of device to \nallow Customer to have different content available on a \nmobile vs a tablet or desktop view. \nContent can be configured specifically for external vs \ninternal career sites when using CSB. \nOut the box components are available, or custom \ncomponents can be built. \nJob Matching Using AI \nVisitors to the career site can upload their resume and \nautomatically see jobs that match their skills. The skills \ncloud on the job detail page helps them further \nunderstand how their skills match to help determine the \nbest fit jobs to apply to.  \n \nUse of this AI feature requires the purchase of SAP AI Units and \nis subject to separate documentation. Please review the SAP AI \nServices List in Cloud Service Specifications for details \nMobile Friendly \nUsing native functionality to design and render a Career \nSite helps to create a mobile-friendly experience. This \nfeature is also used in conjunction with Recruiting \nManagement to deliver mobile application functionality. \nSearch Engine Optimization \nEnables structure of the Career Site and rules used to \nhelp keep content fresh and to help enhance a search \nengine’s indexing of the site.  \nTalent Community Capture  \nAbility to capture a candidate’s information for the \npurposes of applicant source tracking, job marketing, \nanalytics, and talent community sourcing. \nLocalization & Translation Management \nUsing the Career Site Builder administration tool, Users \ncan add custom translation text for career site fields. \nUsing the Translation Editor, users can view and update \nthis text, as well as enter overriding text for all configured \nand supported languages. Customer can also update \ndefault wording for English language labels. \nBrand and Locale Management \nAll pages on Career Site Builder sites can be customized \nby brand or locale. This allows the Customer to create a \n\n\n\n--- Page 9 ---\nFeature Scope Description for SAP SuccessFactors Recruiting \nRECRUITING MARKETING \nPUBLIC            9 \ncandidate experience customized to its individual \nbrands, or specific countries where it recruits candidates. \nEmail Alerts & Campaigns \nAbility to create and send bulk email campaigns using \ncorporate branding guidelines.  \nPermissions \nCSB allows the permissioning of certain aspects to users, \nto control who has access to make changes to the site or \nbuild new pages, layouts, or rules. \nCookie Management \nGives ability to enable the cookie banner, which notifies \nvisitors of site’s use of cookies. Can also configure the \ncookie consent manager, allowing visitors to accept or \ndecline the use of specific cookies while visiting the \ncareer site. \n*Disclaimer: SuccessFactors Recruiting offers the technical ability for Customers to send emails to any number of \nrecipients (i.e., CRM (Candidate Relationship Management) features). Notwithstanding the foregoing, or anything in \nthe parties’ Agreement, SAP reserves the right to restrict the number of emails and/or the number of recipients per \nemail upon providing notice to Customer.  \n \nIn accordance with the Customer’s warranty in the Agreement, Customer must use the email functionality in \naccordance with all applicable laws and regulations. Furthermore, Customer agrees not to use the email \nfunctionality in a manner that may harm SAP, its customers or other third parties. As a result, upon SAP’s request, \nCustomer will change its email practices to avoid violating any interests harmed due to Customer’s apparent \nfailure to comply with such laws or regulations or due to its misuse of the email functionality. As an example, if \nCustomer’s email practices lead to blacklisting the Cloud Service URL and/or IP address, SAP may transfer the \nCustomer to a separate URL and/or IP address at Customer’s expense, or SAP may suspend the email feature \nuntil the parties have agreed on a reasonable email practice that is appropriate for a Cloud Service offering in a \nmulti-tenant environment.  \n \nCustomer may not rely on the unrestricted use of the feature. SAP may further restrict (technically or \ncommercially) the usage of the email feature to its customers by providing thirty (30) days advance written notice \n(email permitted) to some or all affected customers using the email feature of the Cloud Service or IP address. \n \nTalent Community \nRecruiting Marketing allows Career Site visitors to join the Customer’s private Talent Community. Members of the \nTalent Community receive future job notifications when job opportunities match their interests. \n \nKey Feature \nDescription \nAutomated Job Alert Creation \nAbility to gather candidate interests on the Career Site \nbased on their interaction and behavior on the site, \nsubject to an applicable privacy policy (or similar \ndocument) or consent, as required. \nJob Marketing \nProvides the functionality that matches the \"User Agents\" \nto new job openings and notifies the candidate via email \nwith a direct link to the Job Opportunity. \n \n \n\n\n\n--- Page 10 ---\n10        PUBLIC \n \n \nFeature Scope Description for SAP \nSuccessFactors Recruiting \nRECRUITING MARKETING \nRecruiting Dashboard & Reporting \nSAP SuccessFactors Recruiting Marketing includes a Recruiting Dashboard. \n \nKey Feature \nDescription \nReporting \nAbility to view basic site activity, e.g., visitor traffic, mobile \ntraffic, and e-mail engagement activity in both \naggregated and detail form \nSource Report \nAbility to see which sources/engines are driving traffic \nand apply conversions on the Career Site. \nURL Builder \nAbility to create trackable URLs to drive candidates to \nspecific jobs or pages on the careers site. \nAdvanced Analytics \nCombines SAP SuccessFactors Recruiting Marketing \nsource data with SAP SuccessFactors Recruiting \nManagement application data to provide anonymous \nconversion and optimization metrics.  \n \n\n\n\n--- Page 11 ---\nFeature Scope Description for SAP SuccessFactors Recruiting \nRECRUITING MANAGEMENT \nPUBLIC            11 \nRECRUITING MANAGEMENT \nRequisition Management \n \nKey Feature \nDescription \nCreate & Copy Requisitions \nAllows users to create a new requisition by selecting a \njob code or role from a job template library (which will \nprepopulate some fields), copy an existing requisition or \ncreate from an empty template. \nDifferent templates allow different data or processes to \nbe driven based on criteria such as country or type of \nposition.  \nEvergreen requisition feature allows the company to \ngenerate a pool of potential candidates for future \nopenings and link these to hiring requisitions. \nIntegration between Position Management and \nRecruitment Management \nProvides a job profile for the requisition created and \nprepopulates the requisition details.  \nJob Profile Builder Integration \nJob Profile Builder Integration populates job requisitions \nwith pre-defined Job Profile content set up by an \nadministrator. This pre-population results in consistency \nand professionalism in job requisitions. \nJob Description Enhancement Using AI \n \nUsers can now enhance and generate the job \ndescription using generative AI capabilities. \n \nUse of this AI feature requires the purchase of SAP AI Units and \nis subject to separate documentation. Please review the SAP AI \nServices List in Cloud Service Specifications for details \nRequisition Approval Workflow \nConfigurable workflow for requisition approval supports \niterative, collaborative, and consecutive workflows, \nwhere routing options can be mixed and matched, and \nwhere ad hoc approvers may be added to the route \nmap. \nAutomated notifications and prompts within \nSuccessFactors are available to assist users. \nCustom Fields \nRequisitions support the use of Customer-defined fields. \nJob Posting \nRequisitions can be posted through the Recruiting \nManagement tool to several locations. \n \nThe locations where requisitions can be posted through \nthe Recruiting Management tool are: \n• \nInternal career site \n• \nExternal career sites \n• \nPrivate postings \n• \nJob boards \n• \nAgencies \nAllows Users to create a local specific URL that can be \nused for a candidate to apply directly to a position \nwithout it being posted on a careers site or elsewhere. \n\n\n\n--- Page 12 ---\n12        PUBLIC \n \n \nFeature Scope Description for SAP \nSuccessFactors Recruiting \nRECRUITING MANAGEMENT \nPosting can be automated using business rules and/or \nrecruiting profiles with Recruiting Posting. \nCompetency Library \nIncludes a standard competency library, or a library can \nbe created or imported from a third party. These \ncompetencies can be used to populate requisitions \nwhen they are assigned to roles and used to rate \napplicants as part of the interview process. \nPrescreening  \nUsers can define pre-screen questions presented to \napplicants at the point of application. These pre-screen \nquestions can be used to gather information, score \napplicants, and automatically disqualify applicants who \nmeet certain criteria. \nUser Permissions \nControls who can view requisitions and what fields they \ncan view and edit. \nTemplate permissions or Role Based Permissions that \ncontrol the actions that users can do or the data they \nhave access to within the system. \nRecruiting Operators, Recruiting Teams and Recruiting \nGroups allow additional control within requisition, \ncandidate, and application management \nBusiness Rules Automation \nAllows Users to create Customer-specific rules to \nsupport their business processes. \n \nThe Customer can create several types of rules, that are \ntriggered either on initiation, on save or on change. Rules \nare supported on the job requisition, job application, job \noffer and to update applicant status based on certain \nactions. Customers can also create rules to display on \nscreen messages to recruiting users. \nTalent Pools \nAbility for users to create a group of candidates, \nemployees, or new prospects for a specific purpose. \nTalent pools can be used to pipeline candidates through \na customized process, group candidates for an email \ncampaign, or keep track of candidates interested in a \nspecific type of event or job opportunity. \nLanguage Packs and Translations  \nAbility to use the system in multiple languages, post jobs \nin different languages and provide translated career \nsites and application process. \nIntegration Center \nAbility to build, run, schedule, and monitor simple \nintegrations. Predefined templates are available, and \nusers can create their own templates. \nCheck Tool \nThe check tool helps to identify and resolve issues when \nthe system does not work as expected. \nOData API \nThe HCM Suite OData API is the SAP SuccessFactors \nWeb Services API. The API is data oriented. The API is \nbest used for frequent or real-time requests for small \namounts of data. Large data requests are better handled \nby batch FTP processes \nData Protection and Privacy \nSAP SuccessFactors Recruiting includes comprehensive \ndata protection and privacy features that are common to \nthe entire SAP SuccessFactors HCM Suite. \nData Retention Management in Recruiting allows you to \ndefine how long candidate and job application data is \nstored before it can be removed. \n\n\n\n--- Page 13 ---\nFeature Scope Description for SAP SuccessFactors Recruiting \nRECRUITING MANAGEMENT \nPUBLIC            13 \nDocument Management \nSAP SuccessFactors document management tools \nenable administrators to manage document attachments \ncentrally for the HCM Suite. Administrators can use \ndocument management tools to view and manage \ndocuments centrally and to configure document storage \nsettings. \nFoundation and Generic Objects \nSupported within recruiting on the requisition, offer, \nprofile and application templates to allow data flow \nto/from other modules. \nSMS (Short Message Service) \nNotifications sent to applicants about scheduled \ninterviews and ad-hoc.  Can use predefined template or \ncreate on the fly. \nQualtrics  \nAllows the ability to add a feedback opportunity on the \njob application confirmation page that appears after a \ncandidate successfully submits a job application. \nAllows the ability to add JavaScript code in Career Site \nBuilder to add a Qualtrics feedback tab to all your career \nsite pages, or to a specific career site page. \n \nCandidate Management \n \nKey Feature \nDescription \nCareer Sites \nAllows Users to create an external and internal careers \npage that hosts the list of open jobs (posted \nrequisitions) and allows candidates to fill out an \napplication to show their interest in a particular job. \nTopic-sensitive microsites available. \nConfigurable search criteria can be defined for external \nvs. internal careers sites. \nJob Alerts \nCandidates can save job searches and schedule regular \nemail notifications to inform them of all or newly \nmatched jobs. \nConfigurable Workflows \nAbility to set up stages in the application workflow, and \ndefine features such as automatic email notifications, \ncandidate-facing labels, and visibility into applicant data \nfor each stage. \nData captured from an applicant can be driven by \ncountry of the job or stage in the pipeline. \nCandidates can be invited to apply for a job at any stage \nof the process. \nSelection Permissions \nAbility to set permissions to limit who can view and \nchange the status of candidates in each stage of the \nselection process. \nApplicant Workbench \nAbility to filter and search across applicants to a specific \njob, based on fields defined by an administrator. \nIncludes search by keyword in CV and Cover Letter and \nfields defined in the application and candidate profile \ntemplate based on configuration. \n  \nAI-Assisted Skills Matching can be used to assist in the \nscreening process and show insights into skills matched \nbetween job requisition and candidate applications.  \n\n\n\n--- Page 14 ---\n14        PUBLIC \n \n \nFeature Scope Description for SAP \nSuccessFactors Recruiting \nRECRUITING MANAGEMENT \n \nUse of this AI feature requires the purchase of SAP AI Units and \nis subject to separate documentation. Please review the SAP AI \nServices List in Cloud Service Specifications for details \nBulk Actions \nAbility to take the same action on multiple applications, \nsuch as emailing candidates, or moving candidates from \none stage to another. \nEmployee Referral \nEmployee Referral tracks the referring employee and \nsource of referral for new candidates. Employees who \nhave referred a candidate can view the status of their \nreferrals currently in the hiring process. Employees can \nsubmit candidates to jobs directly or by e-mailing the \ncandidate. \nCorrespondence Templates \nAllows users to create customized email templates for \ncommunicating with candidates and internal participants \nin the recruiting process. These templates can be set up \nto automatically be sent out at configured stages of the \nselection process or sent manually.  \nTemplates can be translated into multiple languages to \nsupport the local of the user or recipient.  \nAccess to use a template is some areas is covered by \nRBP (Role Based Permissions) \nAssessment \nAllows users to create online prescreening questions as \npart of the application process, and optionally set up \nweightings to rank the applicants based on total \nprescreen score.  \nIncludes support for automatic disqualification of \napplicants based on their answers. \nInterview Scheduling \nInterview Scheduling allows recruiting users to enter \navailability directly into the system so that interviews \nwith applicants can be easily scheduled by other users, \nor by candidates via self-scheduling. \nSuccessFactors can be configured to integrate directly \nwith Microsoft Outlook using Modern Authentication. \nInterviews can be updated, rescheduled, or cancelled \nand automated notifications sent to internal users and \napplicants. \nSuccessFactors can be configured to integrate with \nMicrosoft Teams, allowing a Teams invite to be included \nin the confirmation. \nCompetency-Based Candidate Ratings \nAllows Users to base candidate interview ratings on \ncompetencies and skills, as defined by the job \nrequisition. Allows for an overall candidate rating and \ninterviewer comments. \nInterview Questions Generation Using AI and \nApplicant Evaluation in Microsoft Teams \nInterviewers can generate interview questions based on \nthe job description using the generative AI capability and \nevaluate the applicant after the interview is complete in \nMicrosoft Teams. \nOffer Approval \nOnce a recruiter, hiring manager, or other authorized user \ndecides to hire a candidate to fill a job requisition, the \noffer process consists of assembling details of the offer \nthat will be extended to the candidate, routing these \ndetails for approval, generating an offer letter using \ntokens from the requisition, application and offer details \nform and extending an offer letter to a candidate. \nBusiness Rules can be used to help calculate data or \n\n\n\n--- Page 15 ---\nFeature Scope Description for SAP SuccessFactors Recruiting \nRECRUITING MANAGEMENT \nPUBLIC            15 \nprepopulate data into offer approval template fields. \nPredefined approval can be set-up per template, or ad-\nhoc approval is supported. \nBusiness Rules can be used to pre-select the correct \nOffer template. \nOffer Letter Templates \n \nPermissions allow control over who can create an offer. \nAllows users to create customized offer templates for \nextending offers to candidates. \nAccess to templates can be controlled using Role Based \npermissions. \nBusiness Rules can be used to pre-select the correct \nOffer template. \nSpecial tokens can be used to add paragraphs of text \nbased on Business Rules. \nOffer letters can be sent as a PDF attachment, verbal \noffer or as an email. \nOnline Offer  \nOnline Offer with eSignature \nA secure online portal where offer letters can be sent \nand candidates can login and accept, decline, or ask a \nquestion.  \nIf using online offer with eSignature, allows for an \nintegration with SAP Signature Management by DocuSign \nCandidate Relationship Management \nFeatures include Talent Pools, Data Capture Forms, \nEmail Campaigns, Landing Pages, and Activity Tracking. \nMessage Centre allows email correspondence within \nSuccessFactors between a candidate and user. \nResume Parsing \nWhen creating an account, the candidate can upload \ntheir CV and the data can automatically populate fields \nwithin the profile. \nAI-Assisted Skills Validation for Applicants \nAI-assisted skills validation allows applicants to add and \nmanage skills that they want to share with the recruiter, \nas part of their application. \n \nUse of this AI feature requires the purchase of SAP AI Units and \nis subject to separate documentation. Please review the SAP AI \nServices List in Cloud Service Specifications for details \nData Migration \nSuccessFactors supports an initial load of data in the \ncorrect format of requisitions, candidate data including \nattachments and application data including attachments. \nManaging Duplicate Candidate Profiles \nCandidates sometimes create more than one candidate \nprofile in Recruiting. In such situations, you can merge \nthe profiles into a single profile. \nJob Analyzer for Recruiting \nThe Job Analyzer is designed to help you create the best \njob description possible by providing salary and \nlanguage recommendations. This unique capability is \nmade possible using machine learning techniques, \ncombined with historical applicant data to determine \nany gender-biased language. \n* In support of eSignature, SAP Signature Management by DocuSign is an optional integration, with additional \nSupplemental Terms and subscription required.  \n\n\n\n--- Page 16 ---\n16        PUBLIC \n \n \nFeature Scope Description for SAP \nSuccessFactors Recruiting \nRECRUITING MANAGEMENT \n \nCandidate/Resume Search \nKey Feature \nDescription \nBoolean Search \nEnables search for candidates using advanced Boolean \ncriteria. \nWizard-style Search Builder \nAllows Users to create, save and share (with other Users \nwith proper permissions) candidate searches using a \nwizard-style interface. \nTags \nAbility to tag candidates with customized attributes and \nsearch for candidates with those tags. \nOFCCP Compliance \nAbility to create, save and report on candidate searches \nin a way that helps support OFCCP compliance*. \nPermission to Search \nSearch of candidates can be controlled based on \npreferences set by the applicant when creating a profile \nCandidate Forwarding \nProfiles of candidates can be forwarded directly to \ncolleagues or job requisitions for consideration.  \nConfiguration within the system gives control over what \ndata can be forwarded.  \nCandidate Search Audit \nAbility to report on search criteria, number of results, the \nrelated requisition the language of the search, whether \nthe search was on internal or external candidates, the \ndate of the search, who performed the search, every \ncandidate returned in the search and the action taken \nbecause of the search (email or forward.) \nVETS100 Reporting \nSuccessFactors also provides a pre-built file ready \nVETS100 report that can be set up in a client’s instance \nupon request \n*OFCCP- Office of Federal Contract Compliance Programs, which are used by companies doing business with the \nUS government. \n \nAgency \nKey Feature \nDescription \nAgency Functionality \nThe Customer may work with recruiting agencies that are \nused to source and submit applicants for certain jobs. An \nadmin may set up new agencies and agency Users who \ncan then log in through the agency portal. \n \nEnabling the agency feature provides a separate portal \nfor External Recruiting Agencies. Allows external \nagencies and recruiters to create and see their \ncandidates, see job requisitions open for agency access \nand forward candidates to those job requisitions. \n\n\n\n--- Page 17 ---\nFeature Scope Description for SAP SuccessFactors Recruiting \nRECRUITING MANAGEMENT \nPUBLIC            17 \n \nHire & Onboard \nKey Feature \nDescription \nEmployee Central (SAP SuccessFactors Recruiting \nManagement to SAP Employee Central (EC) \nIntegration) \n \nThe Recruiting Management to SAP SuccessFactors \nEmployee Central Integration supports the seamless \ntransition of an external candidate record into a new \nemployee account, including issuing an employee ID. \nSAP ERP Human Capital Management (SAP ERP \nHCM) New Hire Integration \n \nSAP provides new hire integration for the Customer using \nboth SAP ERP Human Capital Management (SAP ERP \nHCM) and Recruiting Management via an integration \npack. \n \nThe integration pack allows the transfer of hired \napplicant data from SAP SuccessFactors into SAP ERP \nHCM. \nSAP SuccessFactors Onboarding Integration \nThe Recruiting Management to SAP SuccessFactors \nOnboarding Integration provides a seamless way to \ntransition an External Candidate record into Onboarding. \n \n \n \n\n\n\n--- Page 18 ---\n18        PUBLIC \n \n \nFeature Scope Description for SAP \nSuccessFactors Recruiting \nRECRUITING MANAGEMENT \nMobile Recruiting \n \nKey Feature \nDescription \nRequisition Approvals \nUsers with mobile access and proper permissions (as \ndefined by the system administrator) can view and \napprove requisitions on a mobile device. \nInterview Feedback \nInterviewers can rate candidates based on \ncompetencies and skills associated with the job. Allows \nfor a thumbs-up or thumbs-down rating as well as free \nform comments using a mobile device, which are then \npushed back into the recruiting system where they can \nbe viewed by those with the correct permissions. \nOffer Approvals \nUsers with mobile access and proper permissions (as \ndefined by the system administrator), can view, and \napprove candidate offers on a mobile device. \nSupport for Multiple Mobile Platforms with Native \nMobile Applications \nMobile Recruiting features are supported on iOS and \nAndroid platforms after accepting and subject to the \nstandard applicable mobile terms and conditions \nprovided before download of the application, as \nupdated from time to time. \nPush notification \nPush Notifications are available for Providing interview \nfeedback tasks, Job Requisition Approval requests and \nJob Offer Approval requests. \n \nRecruiting Reporting/Analysis \n \nKey Feature \nDescription \nStandard Reports \nProvides nine out-of-the-box, standard recruiting reports \nincluding information that helps support OFCCP*. \nAd Hoc Reports \nStandard and custom fields are available in an ad hoc \nreport tool, where Users with appropriate permissions \nmay construct reports by selecting various available \ncolumns and filters. \nCustom Reports \nUsers with the proper permissions can create custom \nrecruiting reports based on SAP SuccessFactors \nRecruiting Management data. \nPrint and Go Pack \nInterviewers (and team members) can print a selection \nof applicants and competency information to be used \nduring the interview process. \nAudit Trail Reports \nTracks changes (by User, date, and time) to candidate, \nrequisition and offer status. \n*OFCCP- Office of Federal Contract Compliance Programs, which are used by companies doing business with the \nUS government. \n \n \n\n\n\n--- Page 19 ---\nFeature Scope Description for SAP SuccessFactors Recruiting \nRECRUITING MANAGEMENT \nPUBLIC            19 \nThird-Party Integration \n \nKey Feature \nDescription \nAssessment Integration \nIntegration with several assessment providers – details \navailable on SAP \nIntegration with SAP Signature Management by \nDocuSign \nSupport online offers with eSignature which allows a \ncandidate to digitally sign an offer letter*. \nIntegration to First Advantage \nIntegrated to use First Advantage for background \nchecking*. \nIntegration to other Background Checking \nplatforms \nIntegrated to use the Dell Boomi integration platform for \nthird party background checking providers*. \nJob Board Integration \nPost requisitions to selected job boards. \n* These features are not included with SAP SuccessFactors Recruiting Management and can be subscribed to for \nan additional fee. \n\n\n\n--- Page 20 ---\n20        PUBLIC \n \n \nFeature Scope Description for SAP \nSuccessFactors Recruiting \nTRADEMARK INFORMATION \nTRADEMARK INFORMATION \n• First Advantage® is a registered trademark of the First Advantage Corporation \n• \niOS® is a registered trademark of Apple, Inc. \n• \nAndroid® is a registered trademark of Google, Inc. \n• \nDell Boomi® is a registered trademark of Boomi, Inc \n• \nDocuSign® is a registered trademark of DocuSign \n \n\n\n\n--- Page 21 ---\nFeature Scope Description for SAP SuccessFactors Recruiting \nService Availability \nPUBLIC            21 \n3 Service Availability  \nThis section describes the service availability aspects.  \n \nAvailability \nAspect \nDescription \nRegions \nSee SAP Discovery Center \nInfrastructure \nRegions \nWe run on several underlying Infrastructure-as-a-Service technologies and regions. Some are \nowned by SAP, and some are owned by our partner infrastructure providers, including \nMicrosoft Azure, Google Cloud Platform, and Converged Cloud (SAP) \nAvailability  \nService Availability is a customer contractual commit that is pegged at 99.7%  \nThis would imply that our services / product will be available for the customer to use with an \nuptime of our Core Product for ≥ 99.7% of the times \nSAP Trust Center is the trusted document reference for SLA which is also visible to the \ncustomers  SERVICE LEVEL AGREEMENT FOR CLOUD SERVICES \nEnvironments \nCloud Foundry environment. \nLanguages \nThe web-based administration user interface is available in the following languages:  \n• \nArabic  \n• \nBulgarian  \n• \nCatalan  \n• \nChinese (China - simplified)  \n• \nChinese (Taiwan)  \n• \nCroatian  \n• \nCzech  \n• \nDanish  \n• \nDutch  \n• \nEnglish (Great Britain)  \n• \nEnglish (United States of America)  \n• \nEstonian  \n• \nFinnish  \n• \nFrench (France)  \n• \nFrench (Canada)  \n• \nGerman (Germany)  \n• \nGerman (Switzerland)  \n• \nGreek  \n• \nHebrew  \n• \nHindi  \n• \nHungarian  \n• \nIndonesian  \n• \nItalian  \n\n\n\n--- Page 22 ---\n22        PUBLIC \n \n \nFeature Scope Description for SAP \nSuccessFactors Recruiting \nService Availability \n• \nItalian (Switzerland)  \n• \nJapanese  \n• \nKorean  \n• \nLatvian  \n• \nLithuanian  \n• \nMalay  \n• \nNorwegian  \n• \nPolish  \n• \nPortuguese (Brazil)  \n• \nPortuguese (Portugal)  \n• \nRomanian  \n• \nRussian  \n• \nSerbian (Latin)  \n• \nSlovak  \n• \nSlovenian \n• \nSpanish (Spain)  \n• \nSpanish (Mexico) \n• \nSwedish  \n• \nThai  \n• \nTurkish \n• \nUkrainian \n• \nVietnamese  \n• \nWelsh \nThe SAP SuccessFactors documentation on SAP Help Portal is available in the \nfollowing languages: \n• \nEnglish \n \nAccessibility SAP SuccessFactors’ design and development guidelines for its software cover the Web Content \nAccessibility Guidelines 2.1 Level A and AA, US Section 508, and the EN 301 549 Chapter 9, 10 \nand 11. \nAdditional accessibility information can be found in our Customer Success Accessibility Hub. \n \n\n\n\n--- Page 23 ---\nFeature Scope Description for SAP SuccessFactors Recruiting \nSecurity, Privacy and Compliance \nPUBLIC            23 \n4 Security, Privacy and Compliance \nSAP fosters trust through responsible actions in the context of security, privacy, compliance and \ntransparency. We build secure-by-design solutions, help you meet regulatory and compliance \nrequirements, collect and process personal data lawfully. SAP SuccessFactors Recruiting ensures cloud \ncompliance, security and privacy at multiple levels.  \nSecurity \nSAP protects businesses’ applications and data by building, running, and maintaining more-secure \noperations. \nSee our security measures to help protect your data's integrity, availability, and confidentiality and \nexplore security products and services from SAP here. \nSAP is committed to delivering trustworthy products and cloud services. Secure configuration is \nessential to ensuring secure operations and data integrity. We have therefore documented security \nrecommendations that are consolidated in this one place to help you configure the best in security for \nyour SAP portfolio. You can access the SAP SuccessFactors HCM Suite Security Recommendations \nhere. \nPrivacy \nSAP SuccessFactors Recruiting follows SAP's global Data Protection and Privacy (DPP) \nguidelines. You can find more information on the guidelines here. \nSAP constantly improves upon Technical and organizational measures (TOMs) for Cloud Services to \nprotect the data we process on behalf of customers against unauthorized access, change, or deletions. \nFurthermore, you can access the Data Processing Agreement for Cloud Services (DPA) for your region \nhere. \nYou can also access our Data Transfer Fact Sheets and Sub-processor lists here. \nAdditionally, you can learn about data protection and privacy capabilities available in the SAP \nSuccessFactors HCM Suite here. \nCompliance  \nAt SAP, we keep our finger on the pulse of ever-increasing security challenges by building a security \nfoundation based on industry standards and compliance and regulatory requirements. View SAP’s \nlatest security compliance offerings and reports.  \nTo access our Certificates, Reports, and Attestations, please visit our SAP Compliance Offerings.  \nVisit My Trust Center \nMy Trust Center, an area within SAP Support Portal for SAP Trust Center, extends the public offering by \ngranting access to additional documentation available only to SAP customers and partners with a valid \nSAP user ID. You can access My Trust Center here. \n \n\n\n\n--- Page 24 ---\n24        PUBLIC \n Feature Scope Description for SAP SuccessFactors \nRecruiting \nBrowser Support \n \n5 Browser Support \nOverview of the browser support.  \nFor the UIs of the service, the following browsers are supported on Microsoft Windows PCs \nand, where mentioned below, on macOS:  \nBrowser \nVersions  \nGoogle Chrome \nLatest version  \nMozilla Firefox \nLatest version  \nMicrosoft Edge \nLatest version  \nSafari \nLatest version (for macOS only)  \nFor additional information, please view our Desktop Browsers and Browser Configuration \nRequirements support page.  \n \nFor mobile browsers:  \nBrowser \nVersions  \nGoogle Chrome for \nAndroid \nLatest version  \nGoogle Android default \nbrowser \nLatest version  \nSafari for iOS \nLatest version (for macOS only)  \n \nFor additional information, please view our Mobile Browser support page.\ni Note \nInternet Explorer 11 or lower versions are not supported. \n\n\n",
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        "text": "--- Page 25 ---\nFeature Scope Description for SAP SuccessFactors Recruiting \nImportant Disclaimers and Legal Information \nPUBLIC            25 \nImportant Disclaimers and Legal Information \nHyperlinks  \nSome links are classified by an icon and/or a mouseover text. These links provide additional information.  \nAbout the icons:  \n• \nLinks with the icon\n: You are entering a Web site that is not hosted by SAP. By using such links, you agree \n(unless expressly stated otherwise in your agreements with SAP) to this:  \n• \nThe content of the linked-to site is not SAP documentation. You may not infer any product claims \nagainst SAP based on this information.  \n• \nSAP does not agree or disagree with the content on the linked-to site, nor does SAP warrant the \navailability and correctness. SAP shall not be liable for any damages caused by the use of such \ncontent unless damages have been caused by SAP's gross negligence or willful misconduct.  \n• \nLinks with the icon \n: You are leaving the documentation for that particular SAP product or service and are \nentering an SAP-hosted Web site. By using such links, you agree that (unless expressly stated otherwise in your \nagreements with SAP) you may not infer any product claims against SAP based on this information.  \nVideos Hosted on External Platforms  \nSome videos may point to third-party video hosting platforms. SAP cannot guarantee the future availability of videos \nstored on these platforms. Furthermore, any advertisements or other content hosted on these platforms (for example, \nsuggested videos or by navigating to other videos hosted on the same site), are not within the control or responsibility of \nSAP.  \nBeta and Other Experimental Features  \nExperimental features are not part of the officially delivered scope that SAP guarantees for future releases. This means that \nexperimental features may be changed by SAP at any time for any reason without notice. Experimental features are not for \nproductive use. You may not demonstrate, test, examine, evaluate or otherwise use the experimental features in a live \noperating environment or with data that has not been sufficiently backed up.  \nThe purpose of experimental features is to get feedback early on, allowing customers and partners to influence the future \nproduct accordingly. By providing your feedback (e.g. in the SAP Community), you accept that intellectual property rights \nof the contributions or derivative works shall remain the exclusive property of SAP.  \nExample Code  \nAny software coding and/or code snippets are examples. They are not for productive use. The example code is only \nintended to better explain and visualize the syntax and phrasing rules. SAP does not warrant the correctness and \ncompleteness of the example code. SAP shall not be liable for errors or damages caused by the use of example code \nunless damages have been caused by SAP's gross negligence or willful misconduct.  \nBias-Free Language  \nSAP supports a culture of diversity and inclusion. Whenever possible, we use unbiased language in our documentation to \nrefer to people of all cultures, ethnicities, genders, and abilities.  \n \n \n\n\n\n--- Page 26 ---\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n© 2024 SAP SE or an SAP affiliate company. All rights reserved.  \nNo part of this publication may be reproduced or transmitted in any form or for \nany purpose without the express permission of SAP SE or an SAP affiliate \ncompany. The information contained herein may be changed without prior \nnotice.  \nSome software products marketed by SAP SE and its distributors   \ncontain proprietary software components of other software vendors.  National \nproduct specifications may vary.  \nThese materials are provided by SAP SE or an SAP affiliate company for \ninformational purposes only, without representation or warranty of any kind, \nand SAP or its affiliated companies shall not be liable for errors or omissions \nwith respect to the materials. The only warranties for SAP or SAP affiliate \ncompany products and services are those that are set forth in the express \nwarranty statements accompanying such products and services, if any. \nNothing herein should be construed as constituting an additional warranty.  \nSAP and other SAP products and services mentioned herein as well as their \nrespective logos are trademarks or registered trademarks of SAP SE (or an SAP \naffiliate company) in Germany and other countries. All   \nother product and service names mentioned are the trademarks of their \nrespective companies.  \nPlease see https://www.sap.com/about/legal/trademark.html for additional \ntrademark information and notices.",
        "tokens": 917,
        "page_range": "25-26",
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    "summary": {
      "type": "multi_chunk",
      "overall_summary": "Based on the provided section summaries, here is a comprehensive overall summary:\n\nExecutive Summary:\nThe document details SAP SuccessFactors Recruiting, a comprehensive recruiting solution that combines modern technology with robust functionality. It encompasses three main components: Recruiting Posting, Recruiting Marketing, and Recruiting Management, along with associated legal and compliance information. The system offers AI-powered features, mobile capabilities, and extensive customization options while maintaining high security and compliance standards.\n\nMain Themes and Topics:\n1. Core Recruiting Functionality\n- Job posting and management\n- Career site building and talent community engagement\n- Candidate management and screening\n- Interview and offer management\n\n2. Technical Capabilities\n- AI and automation features\n- Mobile and multi-browser support\n- Multi-language functionality\n- System availability and performance\n\n3. Compliance and Security\n- Data protection measures\n- Global privacy standards\n- Audit capabilities\n- Legal disclaimers and usage rights\n\nKey Findings and Important Information:\n1. Technical Specifications\n- 99.7% uptime commitment\n- Support for 30+ languages\n- Compatibility with major browsers\n- Mobile accessibility\n\n2. Advanced Features\n- AI-powered job matching\n- Microsoft Teams integration\n- E-signature capabilities\n- Analytics dashboard\n\n3. Legal Considerations\n- Clear distinction between SAP and non-SAP content\n- Usage limitations for experimental features\n- Intellectual property rights protection\n- Liability limitations and disclaimers\n\nStructure and Organization:\nThe document is organized into two main sections:\n\nSection 0 (Pages 1-24):\n- Detailed product features and capabilities\n- Technical specifications\n- Security and compliance information\n\nSection 1 (Pages 25-26):\n- Legal disclaimers\n- Usage rights\n- External content policies\n- Experimental features guidelines\n\nThe document follows a logical flow from product functionality to legal considerations, providing a comprehensive overview of both technical and compliance aspects of the SAP SuccessFactors Recruiting solution.",
      "chunk_summaries": [
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          "page_range": "1-24",
          "summary": "Here's a summary of the key points from the SAP SuccessFactors Recruiting document:\n\nMain Components:\n1. Recruiting Posting\n- Manages job postings to job boards and school boards\n- Features automated posting rules and field completion\n- Supports multilingual and multi-location posting\n\n2. Recruiting Marketing\n- Career Site Builder (CSB) for creating and managing career sites\n- Talent Community features for candidate engagement\n- AI-powered job matching capabilities\n- Analytics and reporting dashboard\n\n3. Recruiting Management\nKey Features:\n- Requisition management with approval workflows\n- Candidate management and screening\n- Interview scheduling with Microsoft Teams integration\n- Offer management with e-signature capability\n- Agency portal functionality\n- Mobile recruiting capabilities\n- AI-assisted features for job descriptions and skills matching\n\nTechnical Details:\n- Service availability: 99.7% uptime commitment\n- Supports multiple languages (30+)\n- Browser support: Latest versions of Chrome, Firefox, Edge, Safari\n- Mobile browser support for Android and iOS\n- Compliant with accessibility guidelines (WCAG 2.1)\n\nSecurity & Compliance:\n- Built-in security measures and data protection\n- Privacy compliance with global standards\n- Integration capabilities with third-party services\n- Comprehensive audit trail and reporting features\n\nThe system appears to be a comprehensive recruiting solution with modern features like AI integration, mobile support, and extensive customization options while maintaining security and compliance standards.",
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          "page_range": "25-26",
          "summary": "Here's a summary of the key points from this legal and disclaimer section of the SAP SuccessFactors Recruiting document:\n\nKey Topics:\n\n1. External Links Policy\n- Two types of links are distinguished by icons\n- External non-SAP hosted sites: SAP is not responsible for content or claims\n- SAP-hosted sites: Users cannot make product claims based on information\n\n2. External Video Content\n- Videos on third-party platforms are not guaranteed for future availability\n- SAP is not responsible for external advertisements or related content\n\n3. Experimental Features\n- Not part of official delivery scope\n- Can be changed without notice\n- Not for productive use\n- Purpose is to gather early feedback\n- Intellectual property rights remain with SAP\n\n4. Example Code\n- Provided for demonstration only\n- Not for productive use\n- SAP not liable for damages unless due to gross negligence\n\n5. Additional Important Points\n- Commitment to bias-free language and diversity\n- Copyright and trademark information\n- Legal disclaimers regarding warranties and product specifications\n\nThis section primarily focuses on legal disclaimers, usage rights, and limitations of liability for various SAP product features and content. It establishes clear boundaries for what users can expect and how they can use different aspects of SAP's documentation and features.",
          "tokens": 917
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    "processed_at": "2025-07-24T21:24:39.700922",
    "status": "completed"
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}