Despite a strong economy and labor market, renters in all income groups are feeling financially squeezed as rental prices have outpaced income gains. Those with lower incomes are facing the greatest strains.

Many renters, especially those with low incomes, struggle with the cost of rent, but the COVID-19 pandemic and recent rent increases have intensified those struggles. It’s affecting renters’ ability to save, forcing them to reduce their spending on other essentials, and pressuring them to move.

That’s what we learned from evaluating renters’ financial challenges using data from two recent surveys: (1) a December 2023 national tenant survey with 2,241 respondents conducted by Avail, an online platform that supports mom-and-pop landlords in managing their rental properties, and (2) the US Census Bureau Household Pulse Survey covering March to April 2024. The Urban Institute partners with Avail to design survey questions.

Results from both surveys highlight that multiple policies are needed to support financially struggling renters. Policymakers can look to our analysis and policy recommendations to understand the economic challenges renters are facing, ways to alleviate renters’ financial burdens and enhance their housing stability, and mitigate the effects of rental prices climbing faster than incomes.

Our findings suggest renters with the lowest incomes have ongoing needs for financial assistance and that households in all income groups would benefit from alleviated rent burdens. Policymakers can take the following steps to support these aims:

  • Offer housing assistance tailored to the needs of different income groups. Households with the lowest incomes need highly subsidized housing, such as housing choice vouchers or a public housing unit. Yet these federal housing assistance programs reach only one in four eligible households, showing a need to dramatically increase federal funding. Households with low and moderate incomes also need access to shallow subsidies to offset financial pressures. Emergency rental assistance, for example, helps people stay housed when they face unexpected financial emergencies.
  • Develop and fund state and local housing programs. Though the housing assistance mentioned above requires federal resources, states and local jurisdictions also have a role to play. They could create and better fund housing programs to reduce financial burdens for households who can’t afford the high cost of rent.
  • Increase the long-term supply of affordable housing. The Biden administration has recently proposed programs designed to produce new housing units near transit and amenities, adding needed housing to the market for renters across income levels. But most of these initiatives require congressional authorization.

Read the full article about financial challenges for renters by Jung Hyun Choi, Elizabeth Burton, and Kathryn Reynolds at Urban Institute.