Is the Rent Here Too Damn High?
The good news is, more new apartments are being built now in Philadelphia.
The bad news is, there are even more would-be renters chasing them.
Put the two trends together and you get some pretty stiff rent hikes, at least relative to trends over the past six years, even if they weren’t all that high in absolute percentage terms.
And Philadelphia isn’t alone in experiencing a sudden upward tick in rents, according to a study released this week by New York University’s Furman Center and Capital One.
The study by Inga Gould Ellen and Brian Karfunkel, “Renting in America’s Largest Metropolitan Areas” (PDF), examined trends in the rental housing markets of America’s 11 largest metropolitan areas from 2006 to 2014. It found that in all 11 of them—Atlanta, Boston, Chicago, Dallas, Houston, Los Angeles, Miami, New York City, Philadelphia, San Francisco, and Washington, DC—the number of renters and their share of the overall housing market grew, and the rental housing stock grew faster than the ownership housing stock. But the rise in the number of renters outpaced the growth in the number of units, putting upward pressure on rents in all 11.
“This study shows that affordable housing is becoming increasingly out of reach for many low- and even moderate-income renters in the nation’s largest metro areas—both in the central cities and their surrounding suburbs,” said Ingrid Gould Ellen, faculty director of the NYU Furman Center, in a news release. “In all of the metro areas we studied, the renter population grew faster than the housing stock. As supply did not keep pace with this growth in demand, vacancy rates decreased, the average number of people living in a rental unit increased, and, in most areas, rents rose.”
In Philadelphia, the median rent held steady from 2006 to 2013 but rose 2 percent in 2014. While that jump didn’t make apartments here less affordable overall, rental housing is actually not all that affordable here: only 35 percent of all rental units in Greater Philadelphia had rents someone earning the median household income for area renters could afford. This is because even though the median gross rent for Philadelphia-area apartments ($1000) was the fifth lowest of all 11 metro areas, the median household income of area renters was the second lowest. Even so, Philadelphia was the fifth most affordable of the 11 metro areas.
The rent uptick also caused a rise in the percentage of Philadelphians who are severely rent burdened (rent consumes 50 percent or more of their income), from 27 percent to 31 percent since 2006, and the percentage who are rent burdened (more than 30 percent) rose from 51 to 55 percent. Both of these figures landed the area in third place for most rent-stressed residents. Among those in the lowest income quintile, 78 percent were severly rent burdened.
Despite the growth in the rental market, however, Philadelphia’s reputation as a city (and region) of homeowners remains pretty much intact: while renters’ share of the overall city housing market rose seven percentage points from 2006 to 2014, only 45 percent of city residents rent, the lowest share of all 11 central cities; Houston was the only other central city where less than half of all households rented.
Want more detail? Here’s the Philadelphia rental housing market by the numbers (PDF).
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