Harvard report shows strong housing market, but low-income renters struggle

Harvard’s Joint Center for Housing Studies provides an annual deep dive into America’s living situation with its State of the Nation’s Housing report. The 2019 edition, released today, suggests a number of trends both positive and negative continue to create a country of housing haves and have-nots.

The humming economy has led to steady growth in household formation, which in turn has kept housing demand strong. Homeownership is ticking upward as a result, yet the increase in homeownership hasn’t put a damper in rental demand, thanks to a growing number of high-income earners who choose to stay renters.

But there are plenty of downsides to the market, too. Housing supply remains constrained, which is driving up home prices and rents alike, particularly at the bottom of the market. Nearly half of all renters spend more than 30 percent of their income on rent, and even those with the cheapest rents are struggling thanks to growing income inequality. And the worst of it is growing homelessness, especially in high-cost coastal cities.

Here are some of the key points made in the report that are shaping what many are increasingly seeing as an affordable housing crisis in America.

High-income renters keeping rental demand strong while low-income renters continue to struggle

With homeownership on the rise, the total number of renter households is dropping. But there remains upward pressure on rents—which rose by 3.6 percent nationwide, led by growth in the west—for a number of different reasons.

First, low vacancy rates mean landlords can push rents higher, since demand still outpaces supply. Second, the number of high-income renters has risen for eight consecutive years. Between 2017 and 2018, alone, 311,000 new high-income renters entered the market, the latest in a crowd of 4.6 million such renters since 2010.

Third, most of the new production of multifamily housing has been to meet the demand of these high-income renters, meaning less production of low- and middle-income options. In 2018, 29 percent of newly completed multifamily housing units came with rents above $2,050, led by the northeast.

Singh Combines Multifamily with Senior Housing for Intergenerational Living

In recent years, an increasing number of multifamily real estate developers have entered the senior living space, drawn by the promising demographics and “recession-proof” product. But Singh, a family-owned developer based near Detroit, was ahead of the curve in diversifying into senior living and is now leveraging its capabilities in new ways.

Founded in 1973 with a focus on apartments, Singh started its senior living operating business — Waltonwood Senior Living — in 1987.

“Waltonwood and senior housing have always been part of diversifying our real estate assets,” Singh Project Manager Avi Grewal told Senior Housing News. 

It’s a point echoed by Steven Tyshka, director of operations for Waltonwood Senior Living.

“There’s a steep learning curve for competitors that come into the market,” he told SHN. “We have the history and experience and model that is proven.”

Singh’s portfolio includes luxury apartments throughout Oakland and Wayne Counties in Michigan, as well as office and other commercial properties in Michigan and North Carolina, golf clubs and single-family housing developments. Its senior living portfolio consists of 12 operating communities under the Waltonwood banner, in Michigan, Virginia and North Carolina.

The Waltonwood portfolio is expanding, notably through a project taking shape in Cary, North Carolina. There, Singh is creating a mixed-use, intergenerational development that will combine multifamily housing with a senior living community. 

‘Not typical to this market’

The Cary project was a long time in the making.

When Singh and Waltonwood established their first community outside of Michigan in 2010, they did so in Cary, a city just west of Raleigh. 

4.6 Million Apartment Homes Needed in the Country by 2030

Supply at RiskThe apartment stock is aging. Without resources to support rehabilitation and preservation efforts, the current supply-demand imbalance will worsen, affecting affordability.

As our population grows, this puts strain on the existing housing supply. A variety of housing options will be needed to meet diverse needs.

Many people in the U.S. call apartments home. They appreciate mortgage-free living, the ability to follow new work opportunities and amenities that fit their lifestyles.