‘Anybody that’s middle class and below, we’re screwed’: Housing costs rise at the fastest pace in decades — but some Americans are already feeling the brunt

Damon Blanchard, 46, lives in Columbus, Ohio years, he said.

Last year, an investment firm bought the apartment complex where Blanchard lives, which he said is the home of mostly people of color, and finally increased his rent from $ 450 to $ 970 in January. That’s why he currently spends almost all of his rent income.

As many tenants have done since the beginning of the pandemic, Blanchard tried to organize with his neighbors and fight against the rent increases of his landlord, although he said that the investment company he acquired his complex, Vision and Beyond, was unwilling to negotiate with tenants as a group.

“Things are changing, but they are getting worse for the people of the nation. Anyone who is middle class and below, we are fucked.

– Damon Blanchard, a 46-year-old man living in Columbus, Ohio

The company did not immediately respond to MarketWatch’s request for comment, but previously told local media that it is investing in much-needed security and building improvements and that any increase in rent was in line with rental properties comparable to zone.

“Things are changing, but they are getting worse for the nation’s citizens,” Blanchard said. “Anyone who is middle and lower class, we’re fucked.”

Blanchard may be more vulnerable than one- and two-income households, but he is not alone. If you are renting your home, you are likely to pay more than you are used to.

Higher cost of living

The Labor Department said on Wednesday that its consumer price index had risen 8.3% in the 12 months ending in April, and the index rose 0.3% just last month. Although inflation has slowed somewhat, Americans still bear the burden of a higher cost of living, especially when paying for accommodation, food, airfare, and cars.

Housing costs, which for a middle-income household could account for a third of a family’s net salary, rose 5.1% last year, the fastest annual rate since 1991. while rents rose 4.8% a year ago, according to the Department of Labor.

While it’s not too surprising that housing costs are rising, “it’s worrisome,” said Daryl Fairweather, chief economist at Redfin. Not much can be done in the short term to curb rental inflation outside of rising interest rates, which the Fed is already doing, he added.

“It’s unfortunate because there are people who will actually leave poorer.”

– Daryl Fairweather, chief economist at Redfin

“I don’t think we’re far from the forest yet in terms of the amount of rents going up,” Fairweather said. “It’s unfortunate because there are people who will actually leave poorer.”

According to Redfin rental data, the average monthly rent demanded increased by 17% between March 2021 and March 2022, reaching $ 1,940. In some cities, rent hikes were even more pronounced: prices rose 40% in Portland, 38% in Austin, and 35% in New York City.

The increases basically represent a period of readjustment after the economy shut down and reactivated effectively during the pandemic, which restored house prices in a market that no longer had enough units to circulate, Fairweather said.

Still, this kind of swing is nothing to sneeze at and can have especially disastrous consequences for low-income households with little room to breathe on their budgets. Rent increases are also likely to disproportionately burden black and Latino families, who were more likely to spend 30% of their income on housing even before the pandemic.

“Rentals eat first”

Housing advocates like to say that “rent is eaten first,” acknowledging that people will take on higher housing costs while sacrificing their standard of living. In the short term, that is, low- and middle-income tenants can make rent increases work at the expense of their savings, their health, and even their future ability to own a home.

If not, they could face eviction or homelessness, which could have more catastrophic consequences on their physical and economic well-being and, ironically, make it difficult for a tenant to find a new place to rent.

Recently affiliated with Phoenix, some Arizona landlords are rejecting quality tenants just because they previously accepted financial aid from the government or a nonprofit to help with pandemic housing costs, and landlords have long discriminated against tenants with evictions on their records.

Biden promises to fight inflation

On Wednesday, President Joe Biden said his administration will step up its efforts to fight inflation.

“I will continue to fight for family farmers like Jeff, so that they can do what they do best. I hope Congress joins me,” said the president, speaking on a farm in Kankakee, Illinois, owned by Jeff and Gina O’Connor. .

In its latest budget proposal, the Biden administration said it will increase funding for the U.S. Department of Housing and Urban Development by almost 21% to $ 71.9 billion in 2023.

The Biden administration said it will increase U.S. Department of Housing and Urban Development funding by nearly 21% to $ 71.9 billion in 2023.

As Realtor.com noted about Biden’s plan: “The goal is to expand rental assistance to more low-income tenants struggling to pay their landlords, increase the number of affordable homes available, and help more northerners. “Americans are becoming homeowners. There is also money in their budget to fight housing discrimination.”

(Realtor.com is operated by News Corp’s subsidiary, Move Inc., and MarketWatch is a unit of Dow Jones, which is also a subsidiary of News Corp.)

Still, critics say more needs to be done. Biden, for example, barely mentioned rents in his address to the state of the Union last February, although rents have skyrocketed for some time, further complicating the capacity of northerners. -American Saving for a Home

Meanwhile, Damon Blanchard expects even more government support in his own fight against landlord rent hikes. “There are no policies to protect people,” Blanchard said. “Everything is driven by companies, everything is driven by capitalists, everything is money. And since we don’t have them, we have to organize ourselves to fight for ourselves. “

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