Nationwide, 34% of the millennial renters can afford to buy the typical home compared to 40% of Gen X renters. While the income gap between Millennial and Gen Xer renters is declining over the years, Millennials out-compete older generations in some large local markets. Actually, among the 100 largest metro areas across the United States, in 30 percent of these areas, there is a higher proportion of millennial than Gen X renters that can afford to buy the typical home.
The National Association of Realtors® compared the share of renters between Millennials and Gen Xers that they can afford to buy the typical home in the 100 largest metro areas. Here are the top 10 metro areas where millennial renters can afford to buy a home more than any other older generation:
In these metro areas, the income for millennial renters is higher than the income for Gen Xers. Specifically, millennial renters earn on average nearly 20% or $8,000 more than what Gen Xers do. For instance, in Boston, MA-NH metro area, the median income for millennial renters was $69,530 compared to $53,530 for Gen X renters.
Rural America faces an affordable-housing crisis that, if left unchecked, could raise rents for low-income residents and contribute to rural population loss in coming years, said a national nonprofit organization.
“We’re learning that in rural housing, there is a crisis and people think that it’s different than urban America,” said Stephen Sugg, government relations manager at the Housing Assistance Council (HAC), which sounded the alarm during its biannual conference in Washington, D.C. earlier this month. “It looks different, but very high percentages of rural renters are paying over half their income in rent.”
HAC officials are worried about the future of an affordable housing program from the U.S. Department of Agriculture (USDA) that provides loans for buying or renovating buildings for affordable housing.
USDA’s Section 515 Rural Rental Housing is among the few rental housing programs specifically for rural communities. The program started in 1963 and has financed more than 533,000 apartment units in nearly 28,000 different multifamily developments. HAC’s data shows that 87 percent of all counties in the United States have at least one USDA property.
But the USDA program doesn’t have enough funding to entice property owners to keep their properties in the subsidized rental market as the Section 515 mortgages mature. That means hundreds of thousands of rental units are scheduled to leave the USDA affordable housing program in the next 25 years. The result is likely to be steep rent increases for rural residents who can least afford it.
“There are about 415,000 units still in existence in this program,” HAC’s CEO, David Lipsetz told the Daily Yonder at the conference in Washington, D.C. “Every single one of those units is on a time clock. Every single one of those units without some action to recapitalize the property is going to deteriorate.”
“We have these units, we have this stock,” Lipsetz said. “If we don’t fund it well enough to even keep what we have, we’re going to continue to depopulate rural places.”
The program supports mortgages for the builders of rental housing for low- and moderate-income families, elderly persons and persons with disabilities. After owners pay off the loans, they are generally no longer required to participate in rental programs for low- or moderate-income families. More than 90 percent of USDA’s Section 515 portfolio is more than 20 years old.
“When a USDA Section 515 loan ends for any reason, the property also loses its Section 521 Rental Assistance. Some properties are restricted to low-income use for a period of time after they leave the program. In instances where there is no restrictive use provision, owners may increase rents to levels their low-income tenants may not be able to afford,” according to a HAC report.
About 15,000 rental units will leave the program in 2028, if no changes are made in funding. That number will continue to grow through 2040, when more than 30,000 units will leave the program if property owners do not renew their participation.
The impact will likely be worst in the poorest counties, the HAC report says. Ninety percent of the nation’s 395 persistently poor counties (defined as having poverty rates over 20 percent for the past 30 years or more) have Section 515 rentals. Subsidized rental units make up a greater share of the housing stock in those counties, as well.
Protecting the housing stock for low- and moderate-income residents should be a priority for policy makers, Lipsetz said.
“The leading edge social science research now tells us that housing is one of the most powerful predictors of your wealth, of your economic mobility, your educational outcomes and very importantly your health outcomes,” he said.
The Daily Yonder, published by the nonprofit Center for Rural Strategies, covers the people, places and policies that affect small cities and rural communities.
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ATLANTA — On a brisk morning in mid-December, Valencia Hicks was running late to the Fulton County courthouse in hopes of avoiding eviction.
The 43-year-old mother had been forced out of her home the year before, a process that had uprooted her family from their apartment in East Point, Georgia. At her new brick split-level, Hicks decided not to pay her $995 monthly rent because her landlord hadn’t adequately fixed broken appliances, preventing the family from enjoying affordable home-cooked meals. The landlord, in turn, filed for eviction.
Like most tenants facing eviction in Fulton County, Hicks is African-American and lacked a lawyer. She planned to tell the judge about her family’s hardships. Not only did she have a disability, reliant on government checks for rent, but she also was raising two boys who each had autism.
Without a favorable ruling, a landlord could move forward with padlocking the door and placing their items on the curb. If she was lucky, she might get her wish of celebrating Christmas there.
A long understudied facet of the American housing market, evictions have hit no area of the country harder than the South, a region home to most of the top-evicting large and mid-sized U.S. cities, according to a list released by Princeton’s Eviction Lab.
Last year Eviction Lab debuted what’s thought to be the nation’s largest eviction database, revealing that U.S. property owners had submitted at least 2.3 million eviction filings in 2016. For housing experts from Louisiana to Virginia, it provided the evidence to confirm what they long suspected: Black renters disproportionately bore the brunt of the eviction crisis.
Eviction Lab found that nine of the 10 highest-evicting large cities were not only located in the South but also had populations that were at least 30 percent black.
Moreover, the top 25 entries in its ranking of mid-sized cities — including East Point, population 35,000 — experienced an eviction rate at least four times higher than the national average of 2.3 percent.
“If you’ve read about the housing crisis, it seems located in New York and San Francisco, but the eviction crisis is happening in cities with a fairly low cost of living like North Charleston, South Carolina, and Tulsa, Oklahoma,” said Matthew Desmond, a professor of sociology at Princeton and the author of the Pulitzer Prize-winning book Evicted.
“There’s a lot of questions left unanswered, but the data allows us to see the problem in a way we’d never seen it before,” Desmond said. “That’s allowed the narrative to change in some communities.”
The current shutdown of many federal agencies could make the matter worse. If the shutdown lasts much longer, housing experts fear evictions could spike nationwide because landlords who rent to low-income tenants might not be able to get rental assistance from the Department of Housing and Urban Development.
Strengthening tenant rights
As some southern legislatures kick off their 2019 sessions this month, many state lawmakers are considering a new slate of bills to curb the larger affordable housing crisis. Following the launch of Eviction Lab’s database, local advocates intend to further raise awareness of the consequences of eviction, a process that can start with a single missed rent payment.
Not only do evicted people face barriers to new housing, studies suggest evictions also are linked to worse health and educational outcomes, according to research respectively from Desmond and the Urban Institute. With evictions often clustered in lower-income black neighborhoods, entire communities can face the fallout of a churn of new neighbors that severs close-knit social networks.
This status quo is often protected and nurtured by politicians and property owners. Landlords in Mississippi routinely file for eviction as a legal way to collect rent, according to an investigation last year by Mississippi Today.
Meanwhile, some lawmakers in the Republican-controlled Georgia statehouse have stymied proposals to strengthen tenant rights.
From 2012 to 2016, Republican state Rep. Wendell Willard, then the chairman of the influential House Judiciary Committee, received at least $30,000 from various companies with ties to the housing industry, based on a Stateline review of campaign contributions. No bill to bolster tenant rights advanced out of his committee.
The former chairman of the Georgia Senate Judiciary Committee, Republican Josh McKoon, didn’t grant a hearing to a bill that would have forced landlords to fix “unsafe or unhealthy conditions” in rental units such as mold growth, pest infestation and tainted water.
McKoon says the committee under his leadership granted hearings to any lawmaker who requested one, but that lawmakers sometimes file legislation “to have a broader conversation” about an issue.
“We try to give judges a fair amount of discretion,” said Willard, who said campaign contributions had no influence on his decision-making on the issue. “I think we have a pretty good body of law in Georgia that’s been developed over many decades on dispossessory. But if something needs to be changed, we try to change it.”
Armed with data and heightened public awareness, in part thanks to Desmond’s book Evicted released two years ago, some housing advocates are pursuing changes in law with a renewed energy to decrease evictions, increase affordable housing and reduce disparities that exist for black renters in the South.
While eviction rates have spiked in states like South Carolina, according to Eviction Lab data, Georgia and Virginia have seen their rates trend downward since the Great Recession.
“Evictions are both a consequence of cumulative forces of poverty — and black poverty — and a cause of it,” said Dan Immergluck, an urban studies professor at Georgia State University. “Evictions hurt folks in all kinds of ways. Because evictions are concentrated in black neighborhoods, it impacts whole communities.”
Higher rents, more evictions
Evictions are the latest in a long line of housing policies that have disproportionately harmed black Americans. Over the past century, well-documented discriminatory practices like redlining, restrictive covenants and predatory lending have denied black people the opportunity to buy homes.
Discouraged from homeownership — and the accompanying wealth-building benefits — many black people rented instead. In 2015, the African-American homeownership rate was about 42 percent, more than 20 points lower than the rate for all groups, according to the U.S. Census Bureau. But a 2018 study found that black people are more likely to pay higher rents than white people in the same areas.
And a Cleveland State University researcher surveying rental agreement laws found that no southern state had a suite of laws protecting tenants over landlords.
Every week, attorney Jesse McCoy sees this play out inside eviction court in Durham, North Carolina. The tenants, he said, are mostly black. Many make honest pleas to a judge about their life’s circumstances — which almost always lack legal standing.
McCoy thinks many of those same tenants would have legitimate grievances, from roach infestations to black mold, that might yield a favorable outcome. But without consulting counsel, he said, they rarely raise legal arguments.
“If you don’t understand rights, you can’t advocate for yourself,” said Sue Berkowitz, director of the SC Appleseed Legal Justice Center, an organization that helps clients in South Carolina, a state with an eviction rate of 8.9 percent, nearly four times the national average.
Housing attorneys throughout the South think that tenants facing an eviction case could have better outcomes in court if they were guaranteed the right to counsel — a right now ensured in select cities such as New York.
“An eviction — even a filing — follows you around,” said Elora Raymond, an assistant professor of city planning and real estate development at Clemson University. “If you get evictions filed against you in Georgia, and move to California, you still have that history.
“If that’s happening more in South Carolina or Georgia,” she said, referring to two states with high percentages of black residents, “and less in Montana or Colorado — there’s a racial implication.”
Virginia Poverty Law Center attorney Christine Marra said tenants who have had rental applications denied are less likely to find safe or affordable housing.
In some cases, those renters often can find housing only farther from where they lived before, potentially impacting other family issues, such as a child’s academic performance. And health care researchers have found that evictions are linked to higher rates of depression, stress and suicide.
Garland Nellom, a 51-year-old mother of three who faced eviction in New Jersey, said she moved to Georgia four years ago after her youngest son, who had asthma and an allergy to the mold she later discovered in their apartment, died. He was 11 years old. Nellom found an apartment in College Park, Georgia, for $745 a month.
Soon, she noticed problems including rodents and mold. She withheld her rent in protest — a practice that in some northeastern and western states can be done legally to force serious repairs from a neglectful landlord, but in Georgia can be grounds for eviction. Her landlord took legal action.
They ultimately settled the dispute, thanks to a lawyer Nellom had secured through the Atlanta Volunteer Lawyers Foundation, and she stayed. This past summer she left for good upon finding exposed wire in her laundry room, which had flooded once again. Given her spotty housing record, landlords wanted her to pay a higher security deposit, which she was unable to do living on disability.
“I was fearful I was going to die,” she said. “I had nowhere to go — nowhere. I put my name on homeless shelter lists. They were full. I had neighbors gracious enough to let me stay.”
Focused on change
Faced with the scope of the eviction crisis, advocates are lobbying for changes to address housing disparities throughout the South.
In North Carolina, McCoy has helped oversee Durham’s eviction diversion program, which pairs Duke law students with unrepresented tenants facing eviction.
South Carolina state Rep. Marvin Pendarvis, a Democrat from North Charleston, is pushing a bill to approve “repair and deduct,” a practice allowed in many states, in which tenants front the costs of repairs if a landlord doesn’t fix the issue, and deduct that amount from a future rent payment.
And in Virginia, which is home to some of the nation’s highest eviction rates, a coalition of lawyers, researchers and activists last year launched the Campaign to Reduce Evictions.
The group has drafted more than 30 proposed changes that would make it easier for tenants to understand the court process for evictions, increase tenant legal rights trainings, pump $20 million into the state’s housing trust fund and expand the state’s low-income housing tax credit.
In response to news reports about Virginia’s high evictions rate, National Apartment Association President Robert Pinnegar recently claimed that “misunderstandings” about evictions have unfairly cast landlords in a negative light.
“Apartment owners do not target evictions for any group or reason,” he wrote in a letter to the Washington Post. “Evictions are a last resort in the rental housing business.”
Housing advocates further recognize that changes can only be effective if they also address the shortage of affordable housing affecting many southern cities.
Some officials have recognized the need: Atlanta Democratic Mayor Keisha Lance Bottoms has vowed to put $1 billion toward more affordable housing. But low-income housing developers say additional funds or tax credits are needed to build new units.
Policies like inclusionary zoning — requiring developers to make a fixed percentage of rental units affordable in new developments — have received a mixed reception across the South.
“Don’t just build new affordable housing,” Immergluck said. “States and localities need to think about creating their own voucher program that might focus on particular populations like families with kids. I don’t see southern states funding a permanent voucher program. Maybe it’s short term.”
Short of a universal housing voucher program, something that Desmond has called for, the Princeton professor thinks states could reduce evictions by making smaller policy changes, such as providing additional legal support, wraparound services, short-term financial assistance or better record keeping.
“We might have a referendum on housing in 2020 — and we haven’t had that in a long time,” Desmond said. “I do think we’re in a moment where we could ask for something ambitious.”
Until tenant rights and affordable housing supplies improve, many experts say black southerners like Hicks will remain vulnerable to eviction. Hicks showed up over 30 minutes late to her Dec. 18 court date. Weary and worried, she said she experienced more traffic than usual.
In a letter to the judge, Hicks explained that she hadn’t slept well because one of her autistic sons had tried to open the upstairs windows of their house late that night. But the judge, offering no explanation, denied Hicks’ request to stay longer in her brick split-level.
According to court records, Hicks’ landlord could have filed for a writ of possession immediately to regain possession of the house. So Hicks called apartment complexes and family members hours away in case she needed to relocate fast.
She desperately wanted a place nearby to keep her boys in the same special-needs program at Banneker High School. But no one she called had immediate availability. She felt disheartened.
“Evictions shouldn’t hurt you after the eviction,” she said. “The laws are more for the landlords and rental companies than the tenants. It’s hurting people. It’s hurting us.”
The day after New Year’s, Hicks was finishing up packing her house, thankful the county marshals hadn’t yet been called to place her possessions on the curb. Her landlord had let her stay through the holidays, but wanted her out in just a few days’ time. She didn’t know where her family would go next. But one thing was certain: She couldn’t stay there.
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A recent report from CoreLogic showed that home prices increased 4% year over year in December, and projected the U.S. price index will rise by 5.2% by December 2020.
As home prices continue to rise nationally, it’s little wonder that Freddie Mac’s latest “Profile of Today’s Renter and Owner” found that the majority of current renters believe renting is more affordable than owning.
However, the percentage of renters who hold that belief has increased dramatically in the past year.
A whopping 84% of renters said they believe renting is more affordable than owning – an all-time high for the survey. For comparison, this number is up 17 percentage points from February 2018.
The survey also found that affordability issues affect the average renter more than a homeowner. Freddie Mac said there are 42% of renters who paid more than a third of their household income on rent.
This is compared to only 24% of homeowners who spend that amount on mortgage payments.
But there is good news for renters looking to own. Given current low interest rates, 40% of renters said they plan to purchase a home.
“The housing market is strong and, based on our survey, the low mortgage rate environment may inspire both renters and owners to make an educated move this spring,” said David Brickman, Freddie Mac CEO. “While Baby Boomers tend to be satisfied with their current housing situation, younger generations are still struggling to determine whether to rent or purchase a home, largely due to lack of supply and affordability constraints.”
And that lack of supply stretches beyond single-family housing. Last year saw record-high occupancy rates in multifamily housing with a shortage of supply. Naturally, this drove rent growth. Many of the renters surveyed by Freddie Mac voiced their worry in this area.
Almost 70% of renters said they are growing more concerned about their rent going up in the next 12 months, while 68% are concerned about not being able to afford their larger expenses. Even so, according to the majority surveyed, renting is still the more affordable option.
A co-op refresh including an unplanned kitchen remodel
It was something like the seven-year itch that had Jessica and Alex setting off on their own. Having lived in a Manhattan rental for six years, they received a lease renewal from their landlord for the seventh. Jessica a real-estate development executive, and Alex, who works in finance as a strategist, sat down to discuss their New York City future. They decided to sign the lease but make it their last.
After a successful search, Jessica and Alex closed on an 800-square-foot co-op in Chelsea and posted their one-bedroom, one-bathroom project on Sweeten, a free renovation platform connecting homeowners with vetted general contractors. They soon found a design-build firm for their overhaul. Read on to learn how this renovation turned a “fine” apartment to fabulous.
“After” photos by Miao Jiaxin for Sweeten
Guest blog post by homeowner Jessica
We purchased the apartment with intentions to renovate. We both love architecture and design, and we wanted a place that we could make our own. The previous apartment, with its sunny balcony and endless closet space, had given us high standards, and working in real estate, I look at beautiful homes all the time. We wanted a home where we could make our mark and add the elements we craved.
We were thrilled when we landed on this one-bedroom apartment, in a 1930s Chelsea co-op. The building had great bones and Art Deco details but the apartment needed work. We’d been following Sweeten, and after closing, when we knew the reno was imminent, we looked to the service for direction. We wanted to create a clean, modern space marrying traditional and contemporary design elements accented with our personal twists. Throughout, we planned to incorporate art and photos from our travels.
Living in the apartment for about half a year and bringing our Sweeten contractor onboard brought the project into focus. We wanted to rethink the closet layouts and planned to update the living room’s custom built-ins. We were also looking for a lighting solution since the courtyard-facing unit didn’t get much natural light.
Last but certainly not least, we planned to improve the kitchen and the bathroom. Additional cosmetic and electrical updates included new doors and hardware and USB outlets throughout the apartment. Our contractor was patient, listening to our thoughts (lots of them), answering questions and—most of all—assuring us that he could get the job done, within our time constraints and with the level of quality we were hoping for.
A narrow galley kitchen? Yes. And we love it.
Closets and storage came first. We’d known when we purchased the apartment that we were in for a major storage deficit. With our contractor’s help, we found we could reconfigure the hall and bedroom closets, which backed up to one another. We moved the interior wall, creating a larger bedroom closet with French doors (sliding doors can restrict access). Downsizing the hallway closet felt like a sacrifice, but we outfitted the space for linen-and-shoe storage—useful and enviable extras in NYC.
The kitchen was one room where plans changed. It had been renovated and we hadn’t planned on a gut-job. We love to cook and entertain, and didn’t want to forego full-sized appliances, but we wanted more cupboard and counter space. We ultimately did a full rip-and-replace. The cabinets are an off-the-shelf pick that we stacked to the ceiling; it was like putting together a giant puzzle, but was good for our budget and timeline, and gave us a ton of storage. The cabinet above the dishwasher was a last-minute call to increase pantry space. Quartz countertops and a slab backsplash give us a marble look without the maintenance. A narrow galley kitchen? Yes. And we love it.
The old ’70s bathroom remained, and it was a full demo and redo. We replaced the peach and yellow bathroom tile, which appeared to be original to the building, with marble subway tile, placed vertically for some spin. We played with metals, choosing an unexpected iron vanity (the countertop is quartz) and chrome hardware. The floor tiles are porcelain, sleek and durable.
The rear-facing apartment was pin-drop quiet, but dark. The silence was a luxury to us, having endured roaring sunrise garbage pickups and the revelry of late-night barhoppers. But the long living room, which also comprises the dining area, had just two windows and no built-in light fixtures. We installed recessed LED lighting in this room and it brightened the area so perfectly that we added it in the bedroom, the bath and, finally, the kitchen.
The existing built-in cabinets spanning the windowed wall in the living roomprovided additional storage and brightened up the room with a fresh coat of white paint. We removed a floating center unit to accommodate a wall-mount TV.
To finish, our Sweeten contractor detailed with all new doors and hardware and added those USB outlets, which become more useful every day. It was our idea to hang wallpaper in the foyer; the subtle raffia gives the walls texture and depth. We chose materials that would stand the test of time from both an aesthetic and durability standpoint. But it was so helpful to have an expert to guide us. There are a ton of vendors out there and our contractor had relationships with suppliers and experience with almost any material available.
Our advice as first-timers is to do the research and know what you want but keep an open mind! Seeing the work progress day-over-day and week-over-week was amazing, and we’re so thrilled with the outcome! Adding our stamp to this place was fun and fulfilling. What a great feeling!
Thank you, Jessica and Alex, for sharing your story!
BATHROOM RESOURCES: Floor and wall tile: Tiles Unlimited. Shower fixtures: Delta. Sink and vanity: RH.
Galley kitchens are more flexible than you may think. Here are some ways to fold them into the living spaces.
Sweeten handpicks the best general contractors to match each project’s location, budget, scope, and style. Follow the blog, Sweeten Stories, for renovation ideas and inspiration and when you’re ready to renovate, start your renovation on Sweeten.
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