To observe an inflation crisis “on steroids,” look no further than America’s rental housing market, famed sociology professor Matthew Desmond told a panel of senators Tuesday.
Rental prices have exceeded income gains by 325% since 1985, with costs growing at their fastest-ever pace last year, Desmond said. And low-income families already living in the cheapest homes available to them — who often spend an unsustainable portion of their paychecks on rent — are left with few options but to cut back on other necessities like food and healthcare.
Meanwhile, some property owners, seeing an opportunity in the scarcity of affordable, available homes, are working to facilitate price hikes to make a profit, “knowing they have a captive tenant base,” Desmond said during a Senate Committee on Banking, Housing and Urban Affairs hearing Thursday.
“What we can no longer do is — looking renting families in the face, families now living in cars, in garages, in attics, in storage sheds in the richest country on the planet — and tell those families, ‘You know, we’d love to help you, but we just can’t afford it,’” Desmond, the author of “Evicted: Poverty and Profit in the American City” and the director of the Eviction Lab at Princeton University, said. “Because that is a lie.”
Tuesday’s congressional hearing was one of multiple held on soaring housing costs in recent weeks, zeroing in on the consequences faced by the nation’s 44 million renter households — 36% of whom make less than $30,000 annually, with that rate going up to nearly half of Black renters, according to Harvard’s Joint Center for Housing Studies.
“Tuesday’s congressional hearing was one of multiple held on soaring housing costs in recent weeks, and the nation’s 44 million renter households — 36% of whom make less than $30,000 annually.”
In June, the national median asking rent was up 14.1% from a year earlier, according to Redfin, and the median asking rent surpassed $2,000 for the first time in May. In some ultra-hot markets like Cincinnati, Seattle, Austin, and Nashville, asking rents have increased more than 30% in the past year, according to Redfin.
Rising costs may be weighing on President Joe Biden’s approval rating among young voters, who have been particularly burdened by high rents, Politico reported Tuesday.
“When rents rise, it makes everything in someone’s life just a little bit more precarious,” Sen. Sherrod Brown, an Ohio Democrat and chairman of the Senate Committee on Banking, Housing, and Urban Affairs, said during Tuesday’s hearing. “More and more families are one emergency away from losing their home.”
But Ranking Member Sen. Pat Toomey, a Republican from Pennsylvania, said Democrats were to blame for that precarity. And Democratic senators’ current healthcare, climate and tax bill — dubbed the Inflation Reduction Act — will worsen the problem, Toomey said.
“Instead of pushing a reckless tax-and-spending bill, the administration should look to opportunities for bipartisan legislation — like the housing finance reform—that relies on free enterprise — not government—to make housing more affordable for more Americans, whether they own or rent,” Toomey said.
Toomey also railed against government regulations that he saw as contributing to higher housing costs, and dinged the Biden administration for extending “the illegal eviction moratorium,” which was first announced by then-President Donald Trump’s administration in September 2020 before it was ended by the Supreme Court last year.
One of the speakers in Tuesday’s hearing, Rosanna Morey, said she is a small landlord of an owner-occupied home with a rental unit in Long Island, and previously rented out an apartment in her home on a month-to-month basis to help cover her bills.
At one point, though, Morey tried to remove the tenant living in the unit so her sister could move in to help both her and her son, since she has incurable cancer and he has a learning disability. The tenant refused to leave, however, and was ultimately able to stay in the property rent-free for two years due to state and federal eviction moratoriums during the pandemic, Morey said.
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