Housing choices for keeping rent costs affordable are limited in many cities and metro areas. In some cases just a small fraction of all available rentals.
America's teaching and nursing professionals are struggling to keep up with the skyrocketing cost of rental housing as monthly rents set new records in cities and metro areas from coast to coast, according to a new analysis by Zillow. The challenge to keep rents affordable means choosing smaller, older homes - dramatically limiting the choices these workers have.
It's a stark contrast with millions of Americans who have seen the freedom of remote working enable their mobility to new locations and improve housing affordability by choosing less expensive markets. Rent affordability is hitting in-person workers more heavily than others - and is becoming especially difficult for teachers and nurses, according to the new analysis from Zillow.com. The Seattle-based Zillow's market experts say renters who hold certain in-person jobs are now "battling for a small slice of the rental market comprising smaller, older homes."
The growth in monthly rents across key U.S. markets is setting new records. That makes it more challenging to maintain rent costs at an affordable threshold of 30 percent or less of income.
"Many renters have been able to keep costs low even as prices have grown over the past several years, but merely affording rent does not mean they are thriving," said Zillow economic data analyst Nicole Bachaud, in a press release announcing the analysis findings. "A deeper look shows a big slice of the market is out of reach for workers looking to maintain a comfortable rent burden. That often means renting an older home with less space but a smaller price tag, or doubling up with roommates or a partner."
Zillow concludes that the analysis "highlights the impact that more than a decade of underbuilding has had on renters as well as the need for communities to make it easier to build homes. New construction in the U.S. has fallen behind by millions of homes since the Great Recession, helping fuel record home value growth and increasing pressure on the rental market."
New construction in the U.S. has fallen behind by millions of homes since the Great Recession, helping fuel record home value growth and increasing pressure on the rental market." - Zillow.com
Other experts have concurred.
"We haven't been building enough new housing to keep up with new households looking for shelter for a decade now," First American Financial Corporation Chief Economist Mark Fleming told Business Insider in a September 2020 story. "And even as the pace of completions has increased recently, household formation (demand) has increased faster. The housing deficit is growing when in a time of pandemic, 'home' is the ultimate stay-at-home 'stock.'"
The most critical takeaway from the current Zillow analysis: Teachers and nurses must often limit their choice of rental properties to only a tiny fraction of the market in order to maintain the the commonly accepted standard for housing affordability: less than 30 percent of their income.
"In Boston, for example, teachers on average only spend about 18.5 percent of their income on rent, down from about 20 percent in August 2016. But to do so, they must choose from only 6 percent of rentals in Boston that are priced low enough," Zillow reported in its press release on the study. "Those homes are almost 300 square feet smaller and 33 years older than the typical Boston rental."
The situation is even more pronounced in Tampa, FL. Teachers there spend on average 28 percent of their income on rent. In order to stay below the 30 percent affordability threshold, they have only 2.2 percent of the rental market available to choose from.
In San Diego, meanwhile, only 8 percent of all rentals meet the affordability threshold for nursing professionals. They spend on average about 24.5 percent