Harvard did some analysis of the American housing climate last year, and, according to this prestigious institution, things are looking bleak.
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According to new research by Harvard University, almost 40 million Americans “live in housing they cannot afford.” That’s more than one in eight Americans! The era of homeownership seems to be dramatically on the wane, and owing to an intense, and essential demand for homes, rent prices are being hiked to unconscionable levels.

Harvard University’s study

In the study, their affordability rate was established by whether participants could afford to pay 30 percent of their income or less on the cost of housing (this could include things such as mortgage, insurance and taxes).

A lot of people who would like to buy are stuck renting, Harvard reports: “The surge in rental demand that began in 2005 is broad-based — including several types of households that traditionally prefer homeownership.” The fact that rent prices are steadily rising, while salaries are not, surely has something to do with the dying homeowner market, as well as with the inability of so many Americans to pay their rent.

In addition, renting is rough right now because most of the units being built are high-end, supply is tight and demand is high. “The number of modestly priced units available for less than $800 declined by 261,000 between 2005 and 2015, while the number renting for $2,000 or more jumped by 1.5 million.”

Especially in metropolitan areas where residents are congested and plentiful, the toll of these statistics are especially severe. According to NBC News, “over 38 million American households can’t afford their housing, an increase of 146 percent in the past 16 years.” Harvard also reports that even pre-existing homeowners are feeling the effects. According to the study,  “the typical homeowner has yet to fully regain the housing wealth lost during the downturn.”

This situation is particularly hard on the working poor. Across the U.S., “70.3 percent of lowest-income households face severe housing cost burdens,” including “nearly nine out of 10 lowest-income renters” in places such as Cape Coral, Florida and Las Vegas. That means more than 50 percent of their income must go toward housing and can’t be used to either pay down debts or add up to savings.

Can the trend be beat?

In New York City, 40 percent of the apartments affordable to lower-income residents vanished over the past decade. That is to say, it’s tough out there for everyone, and it is hard to immunize yourself to the onslaught. Most financial experts are fond of saying that we should not spend more than 30 percent of our income on rent, but that feels a bit of a passé rule of thumb now. In fact, Zillow found more than 80 cities where the median rent alone had far exceeded the 30 percent rule of thumb. For example:

  • New Orleans – 35.3 percent
  • New York – 39.5 percent
  • San Francisco – 40.7 percent
  • Miami – 43.2 percent
  • Los Angeles – 46.9 percent

However, there are steps you can take to minimize the damage done by these obscene rent and home price hikes.

Think outside the box

When you are looking for an apartment to rent, or, dare I say it, a place to own (look at you! *applause), it always helps to be flexible. If you are in a city, consider a street in your desired neighborhood that is not as hip. Or be brave and eschew your first choice neighborhood entirely, and instead, shoot for a less popular (and most likely less costly) area. If you are really dedicated to finding savings, head for the hills! That is to say, get out of the urban areas altogether, especially if you are in a metropolitan area. If you work in New York City, for instance, consider moving to somewhere in Jersey. Now, Jersey ain’t Manhattan. We all know it. Let’s not pretend that it is. But it is nearby(ish), and the savings might just help salve the pain of not living across the street from four bars (which gets old, and loud, by the way).

Don’t be lazy

After all, we are dealing with your money here. If you wouldn’t buy a pair of shoes or a new couch without doing some comparison shopping, then why in the world would you rent or buy an apartment without doing diligent and exhaustive research into what else is out there first? It’s a no-brainer, but so many people don’t do their homework when it comes to this stuff (or, at least, they don’t get an “A” on their homework, i.e. they half-ass it majorly).

A note: Knowing that there is a cheaper deal in the neighborhood doesn’t necessarily mean that you have to take it. You could use it as leverage. For instance, showing the landlord at the place you want that there is a cheaper deal might just get you a discount. This is especially true if you are the only potential buyer or renter.

Read the fine print carefully

Another way that you can minimize the damage of these high prices is through not falling prey to hidden features hidden in your lease that will make for extra costs. Many apartment complexes charge small monthly fees for parking, gated access or curbside trash pickup. Sometimes, if you have a pet, they try to get you to pay their rent as well. You can’t always control these tiny, little, atrocious add-ons, but if you see them, you might try to negotiate them down, or choose a new rental completely. At the very least, you will know what you’re signing up for. And that is always better than going in blind.

Rent security and fighting illegal increases

You shouldn’t have to worry about spontaneous rent increases, but you do have to worry about spontaneous rent increases.

“If you are on a month-to-month lease, the landlord can raise your rent anytime with a 30-day notice unless the increase is higher than 10 percent — in which case that requires a 60-day notice,” Mia Melle, the president of the property management firm Renttoday.us says. “If you have been living in the property more than a year, the landlord needs to give you a 60-day notice regardless of the increase rate.”

In urban areas, landlords have no difficulty finding new tenants. For that reason, they can often be pretty sketchy and unfair. It is where the term “slumlord” originates from. Due to so many options (endless, really) landlords might try to increase the rent mid-lease. But that’s illegal. You gotta fight —  fight for your right — to partayyy (Beastie Boys reference? Anyone? No, seriously though, you have to fight against illegal increases when you are hit with them).

First thing to do if you get a rent increase notice mid-lease (which is also known as super duper illegal) is simply negotiate (which is also known as getting this jerk to be less jerk-ish). You don’t want this to escalate into a war between you and the landlord if it doesn’t need to.

“If the landlord raises your rent without giving you notice, you can advise him in writing that you have not been properly notified, and he needs to delay the increase to comply with the notification requirement,” Melle said.

If the landlord still doesn’t back down, reach out to your local housing authority, and call your landlord out for his attempted illegal action. After all, he is in the wrong, and you are being illegally played. A housing representative will mediate between you and your landlord to help reach a resolution.


Renting, and buying a house as well, is a tough thing these days. For people who aren’t rolling in dough, it might feel nearly impossible. And there is no candy-coating this situation because the reality is that it does suck. But knowing about a few tricks to either prevent yourself from being charged, or knowing what to do when you are unfairly charged too much, can help mitigate some of the losses to your bank account.


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Posted 05.10.2018 - 10:00 am EDT