High-income renters surge in Charlotte, middle class struggles to make rent, report says
The challenge to afford rent in Charlotte continues to grow, particularly for the middle class, according to a new report from the Harvard Joint Center for Housing Studies.
The Charlotte metro area mirrors national trends, which show the middle class is spending more on housing while high-income renters enter the market in bigger numbers than any other group.
“Ultimately we’re in a rental affordability crisis,” said Whitney Airgood-Obrycki, a research associate for the Harvard center, during a presentation announcing the study’s findings.
Middle-class households are increasingly cost burdened
The share of middle class households that spend more than 30% of their income on housing costs rose faster than any other group.
In the Charlotte metro area, the share of renters earning between $30,000 and $45,000 who are cost burdened increased from 31.7% in 2006 to 53.7% in 2018, according to the study.
“This trend of rising middle income burdens is not just something that is happening on the coasts or large metros or high cost cities,” Airgood-Obrycki said. “This is a trend we’re seeing in metros of all sizes across the country.”
The number of low-income renters struggling to afford housing costs around the Charlotte area remains high. More than 80% of households earning under $30,000 are cost-burdened, compared with just 2% of households earning $75,000 or more.
A wave high-income renters enter the market
Households earning at least $75,000 represent the majority of new renters, both nationally and in Charlotte.
“This is a really enormous shift and it’s having a big impact on rental markets,” Airgood-Obrycki said.
Characteristics of these high-income renters, many of whom are college-educated and young married couples, look “a lot like what we would traditionally associate with first time home buyers.”
So why are they renting?
Airgood-Obrycki said a shift in preferences is one explanation, but said home ownership remains financially out of reach many who may want to buy.
“Affordability is major barrier, even if you’re making a solid income of $75,000 a year,” she said.
High-end construction booms as affordable apartments disappear
Because more high-income earners are renting, it’s shifted construction demand to luxury units.
Between 2012 and 2017 the number of units in the United States renting for $1,000 or more increased by 5 million, while those renting for less than $600 dropped by 3.1 million, according to the report.
This work was made possible in part by grant funding from Report for America/GroundTruth Project and the Foundation For The Carolinas.
This story was originally published February 3, 2020 at 1:36 PM.
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