Supply of low-rent housing continued to drop in metro markets nationwide as new construction of higher-cost units intensified, according to Harvard’s Joint Center for Housing Studies.
The supply of units renting for less than $800 declined by 1 million (4.9%). The number of units in this price range fell annually since 2011, with the total net decline going down to 4 million (17%).
New construction has not compensated for the downturn. Nine percent of apartments in unsubsidized multifamily buildings finished in Q1 2018 had asking prices below $1,050, and only 4% rented for less than $850.
The share of new apartments that are affordable to median-income renter households plunged to 3% every year over the last decade, according to the National Multifamily Housing Council. Builders focused on higher-cost units, pushing the overall distribution of rents up.
Low-rent units can be found mostly in older buildings, the study revealed. The share of units renting for under $800 that are at least 50 years old climbed from 35% in 2007 to 43% in 2017.
Almost half of the households living in low-rent units built before 1970 are single persons, while another 26% are families with children and a fifth consisted of people age 65 and over. But despite living in low-cost housing, about half of these tenants pony up over 30% of their incomes on rent and utilities.