With housing prices rising, affordability has become a crisis. Across the country, rents have gone up more than 7% in 2021 and doubled in some cities, and they are expected to continue to rise. Affordable housing means that the property costs 30% or less of a household’s income. The Washington Post estimates that nationwide there is a shortage of some 6.8 million rental units for tenants with extremely low incomes.
In some cities across the country like Phoenix Arizona, tenants are seeing a 33% increase. Portland, Maine has seen a 23.9% rental increase since 2019. That is over a 10% spike in the last year. Rents are starting to surge in many parts of the country as the economy reopens and people return to their home cities. Millennials and Gen Z renters are returning home and heading back to work. Hot home sales have caused baby boomers to sell their homes and rent again now that their children moved out.
Fair Market Rent prices in Cumberland County are very high compared to the national average. This FMR area is more expensive than 93% of other FMR areas. Fair Market Rent for a two-bedroom apartment in Cumberland County is $1,210 per month according to Rentdata.org. The previous year, rent for a two-bedroom home was $1,051 per month. This is a 15.13% increase year-over-year.
Tenants living in areas such as the East and West end of Portland are seeing the highest spikes of the area, but are still below the 10% cap in the new Portland rental ordinance, as reported by the Portland Press Herald. For example, one West End apartment building faces a $2,667, or 35% annual increase in property taxes.
Nationwide, rental prices are up 7.5% so far this year- which is around three times higher than normal with no signs of slowing down. This will cause a major burden for renters, and a warning sign that inflation could linger longer than predicted. Two examples of rent spikes in New England cities include:
In some cities across the country like Phoenix Arizona, tenants are seeing a 33% increase. Portland, Maine has seen a 23.9% rental increase since 2019. That is over a 10% spike in the last year. Rents are starting to surge in many parts of the country as the economy reopens and people return to their home cities. Millennials and Gen Z renters are returning home and heading back to work. Hot home sales have caused baby boomers to sell their homes and rent again now that their children moved out.
Fair Market Rent prices in Cumberland County are very high compared to the national average. This FMR area is more expensive than 93% of other FMR areas. Fair Market Rent for a two-bedroom apartment in Cumberland County is $1,210 per month according to Rentdata.org. The previous year, rent for a two-bedroom home was $1,051 per month. This is a 15.13% increase year-over-year.
Tenants living in areas such as the East and West end of Portland are seeing the highest spikes of the area, but are still below the 10% cap in the new Portland rental ordinance, as reported by the Portland Press Herald. For example, one West End apartment building faces a $2,667, or 35% annual increase in property taxes.
Nationwide, rental prices are up 7.5% so far this year- which is around three times higher than normal with no signs of slowing down. This will cause a major burden for renters, and a warning sign that inflation could linger longer than predicted. Two examples of rent spikes in New England cities include:
Portland, ME:
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Since 2019 rent growth: 23.4%
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2020 rent index: $1881
Providence, RI:
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One-year rent growth: 9.8%
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February 2021 rent index: $1,606 (6.0% less than national average)
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February 2020 rent index: $1,462
According to apartment and Zumper.com, Providence is now comparable to major urban hub Seattle, whose rental prices have decreased during the pandemic. It is not just the rental market that is on fire in Providence though; home sales are skyrocketing with new out-of-state buyers from the New York metro and Boston areas relocating to the Ocean State since the COVID-19 pandemic as noted by Nicole Johnson, Stacker.
Springfield, MA:
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One-year rent growth: 6.4%
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February 2021 rent index: $1,656 (3.0% less than national average)
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February 2020 rent index: $1,557
The Western Massachusetts’ city’s rental prices began their climb well before the pandemic, along with several other cities in the state according to Isaiah Thompson, GBC News. While rents are increasing in the city, they also have high rates of evictions due to the financial struggles brought on by the COVID-19 pandemic.
There is a demand for two types of rentals: single-family homes, and apartments in smaller cities with less inventory. According to data from CoreLogic, rents for single-family homes are growing at the fastest pace in 15 years. What was previously exclusive to cities like San Francisco and New York City, are suddenly experiencing bidding wars and surging prices.
In November, 60% of downtown urban listings offered “rent concessions” or landlords offering a month or two for free rent or waive the deposit.
The trend of small cities seeing an increase in rent has been different from the past. According to Zillow.com, the last time rent increased nationwide this exponentially was in 2015. The pandemic caused Americans to put a greater emphasis on desiring more space and reasonable cost of living. Most economists’ investors predict high demand for rentals for months to come which will push up inflation, as rent makes up 40% of the consumer price index. An analyst from Housing Wire stated “core inflation could stick over 2% faster and longer in this expansion because shelter inflation should pick up.” Overall, addressing the need for housing affordability means creating housing that is affordable at many levels of income.
There is a demand for two types of rentals: single-family homes, and apartments in smaller cities with less inventory. According to data from CoreLogic, rents for single-family homes are growing at the fastest pace in 15 years. What was previously exclusive to cities like San Francisco and New York City, are suddenly experiencing bidding wars and surging prices.
In November, 60% of downtown urban listings offered “rent concessions” or landlords offering a month or two for free rent or waive the deposit.
The trend of small cities seeing an increase in rent has been different from the past. According to Zillow.com, the last time rent increased nationwide this exponentially was in 2015. The pandemic caused Americans to put a greater emphasis on desiring more space and reasonable cost of living. Most economists’ investors predict high demand for rentals for months to come which will push up inflation, as rent makes up 40% of the consumer price index. An analyst from Housing Wire stated “core inflation could stick over 2% faster and longer in this expansion because shelter inflation should pick up.” Overall, addressing the need for housing affordability means creating housing that is affordable at many levels of income.
