New Apartment Construction Unaffordable for Average Renter

The average rent for newly constructed multifamily units equates to 47% of the typical renter household’s monthly income, according to the Harvard Joint Center for Housing Studies (JCHS).

Renter households grew by 900,000 per year on average from 2010-14, and despite increased rental construction, JCHS reports annual completions during the same period totaled only 280,000 new units — far short of demand. Meanwhile, increasing development costs pushed median monthly rent for newly constructed multifamily units up to $1,290 from 2012 to 2013, while typical renter incomes increased by $60 in the same period.

Assuming “affordable” rent should equal no more than 30% of household income, the typical renter household could afford maximum rent of just $820 per month in 2013, compared to the 2013 median rent of $1,290.

Read more at Housing Perspectives