This article discusses the potential problem of increases in apartment vacancies
arising from higher unemployment among the renting population. It also points out
that the increase in the renting population resulting from foreclosures or new
households may offset the potential vacancy problem.
Renter Affordability Likely to Remain Issue
Published: December 08, 2008
By Keat Foong, Executive Editor, Multi-Housing News
Austin, Texas–Rental affordability is likely to continue to be an issue despite the recession, suggests a research report from Mission Residential LLC, an apartment development and investment company. Analyzing data from the American Housing Survey, Richard Moody, chief economist and director of research at Mission Residential wrote that “renter households continue to face imposing housing cost burdens, an issue that will only be compounded by what looks to be a deep and prolonged recession in the U.S. economy.”
Mission Residential’s December 2008 research report entitled “Affordability Remains an Issue in Rental Housing Market” said that since December 2007, lower-skilled workers in lower-wage jobs (those most likely to rent) have been the most prone to losing their jobs.
Retail trade jobs have fallen by 328,100 through October 2008 from its peak in March 2007. And payrolls in leisure and hospitality services have fallen by a net 88,000 jobs since May 2008, the report pointed out.
Renters under financial stress may double up or move back home. However, the report said that the number of renter households has also been steadily rising over the past few quarters as a result of foreclosure or new households who are not buying homes.
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