(Reuters) – Rising rents in the United States have hit young workers with little savings, many of whom are trying to protect themselves by starting side jobs or looking for roommates to cover their rent.
The U.S. Census Bureau estimates that the median nationwide rent will be $1,037 in 2021, up 10% from $941 in 2019, before the coronavirus pandemic. Over the past decade, it has generally risen by 2% to 3% year-on-year, with the only exception being 5% in 2019.
Newcomers, such as college graduates, who have little savings and can’t afford a home, have been hit particularly hard.
Meeb Kozlaak, 23, a doctoral student at New York University, has been living in a rented apartment in Queens, New York for a year. His home door has a broken lock, but his landlord refuses to fix it. Kozlark took a video of the state of the key and uploaded it to the video sharing app TikTok. A year later, the video has been viewed by 230,000 people, and the landlord has announced a $1,000 increase on the $2,500 rent, but the locks are still broken.
“I tried desperately to find a place that wasn’t as cramped as a shoe box, but with a rent that I could afford, but I couldn’t,” Kozlaak said. I feel lucky to have found a new $3,300 property in the same neighborhood.
Stories like this about rising rents abound across the country.
Skyler Lee, 22, of Austin, Texas, signed a one-year contract to rent a two-bedroom apartment and pays $1,950 a month with her boyfriend. A month after the move, another unit in the same apartment was rented out for $2,400. Lee expects his rent to rise to this level the next time his contract is renewed.
Kevin Angelo Cupai, 23, of Chicago decided to give up on renting and move in with his family, who also live in Chicago. It’s impossible to pay her $1,000 a month while looking for a job.
West Coast resident Celine Pun, 21, kept costs down by sharing an apartment in Santa Barbara with a roommate. However, the monthly burden of $600 increased by $50, and several of his five roommates moved out, so he eventually moved out. “It was very frustrating,” she says.
Rents for properties run by management companies, which are usually larger, have risen more dramatically.
According to the Harvard Joint Center for Housing Research (JCHS), the annual rent increase for such properties reached 11.6% from the end of 2021 to the beginning of 2022, about triple the five-year pre-pandemic rate. Meanwhile, the post-pandemic surge in demand has pushed vacancy rates to their lowest level since 1984.
“In many ways, it’s a completely unprecedented market,” said JCHS Senior Fellow Whitney Airgood Obrikki.
The main reason for this is the coronavirus pandemic.
When the 2020 pandemic hit, wealthy people moved to summer homes and remote areas to avoid infection, causing vacancies in many cities and rents to plummet.
Landlords are now trying to make up for those losses and recoup higher maintenance and insurance costs, said Alexandra Alvarado, marketing director for the American Association of Apartment Owners, which represents small landlords.
In big cities and in areas where more people are moving to work remotely, the supply of property is scarce, allowing landlords to demand higher income requirements from prospective tenants.
“Millennials, mainly in their 30s, continue to live in apartments and are unable to buy a home,” said Michael Keane, an adjunct professor of urban planning at New York University. These generations continue to remain in the rental market, preventing the next generation from entering.
Some minorities, such as blacks, may feel more cornered. According to Ingrid Gould Ellen, an urban planning professor at New York University, blacks are less likely to have parents who own a home that is a significant source of wealth in the United States and can expect financial support.
A recent survey by real estate firm Jiro found that tenants of color demand higher deposits and application fees than their white counterparts.
New York has long been known for its fierce competition and high rent, but as a condition of moving in, it is said that there are cases where a guarantor with an annual income of 40 times the rent or 80 times the rent is required.
Fresh out of college, 22-year-old Caleb Simon started working as an Uber Eats delivery driver while working a full-time job at a think tank to secure a place to live. Still, I was able to find an apartment in New York thanks to my roommate’s parents acting as guarantors. “Even getting the cheapest apartment is a very difficult and privileged thing to do now,” he says.