Garrett deGraffenreid, a 23-year-old New York University graduate student, knew the rent on his one-bedroom Manhattan apartment would jump when he saw a Trader Joe’s grocery store pop up down the block. “The writing was on the wall,” he says.
What he didn’t anticipate was just how much his rent would rise. When deGraffenreid and his partner signed a lease last year, they paid about $1,600 per month. On Feb. 11, they received a notice informing them that a new lease beginning next month would cost $2,750 per month: a 69% surge.
“It felt defeating,” says deGraffenreid. He responded to the notice with a plea for a more reasonable rent increase, but was met with a “brick wall” response. The gist of their message was: "There’s nothing you can do so don’t waste your time trying. Good luck!"
He isn’t alone. Similarly jarring double-digit rent spikes are happening all over the country. In Henderson, Nevada, rents rose 26% between 2021 and 2022, according to rental platform Zumper, and in New York City renters leapt 30%. Folks in Miami will likely see rents rise by 39%. Nationwide, rent for a one-bedroom apartment between March 2021 and March 2022 rose an average of 12%; it was the eleventh time in the last year that one-bedroom rent averages hit an all-time high.
For millions, these rent hikes are not merely uncomfortable; they’re existential. If you can’t afford your new lease, but you also can’t afford the thousands of dollars required to move—what happens? The problem is also intractable since it’s born of a deep, nationwide disconnect between supply and demand: There just aren’t enough affordable places to live, period.
Housing construction has moved at a snail’s pace since 2008, but the timeline slowed even further during the pandemic, while widespread remote work policies have precipitated massive influxes of renters to traditionally affordable locales. It’s also a top-down problem: as home prices rose 17% last year—the highest year on record—many would-be buyers were forced to remain in the rental game. With a gap of 4.6 million new apartments requiring completion by 2030 in order to meet demand, and 10-plus million more needing renovations, according to the National Apartment Association, the problem of rising rents doesn’t appear to be a short-term blip.
Congress, meanwhile, has allocated a whole lot of money to renters in a bind, but it’s unclear if folks like deGraffenreid stand to gain. Between 2020 and 2021, lawmakers appropriated nearly $47 billion to stave off evictions during the public health crisis. Some $22 billion of those dollars remain unspent, and could theoretically be used to help people facing possible displacement from spikes in rent, some experts say. But it’s unclear how that will happen. Many regions, including New York City, are out of funding, while others have stipulated that tenants must have lost their job due to COVID-19—which would exclude renters like deGraffenreid.
There is certainly not enough funding to meet the colossal number of renters experiencing unexpected lease or moving costs, but even if some renters find a way to access the funds, it’s a short-term fix to a long-term crisis.
“We actually have to fix this problem in the long run,” says Ann Oliva, vice president for housing policy at the Center on Budget and Policy Priorities, “and we have to make people whole right now.”
Downgrading, couch surfing, and praying for a miracle
Sara Longstaff, a mother of two special needs children in Miami, Florida, is facing a major rent increase on her 3-bedroom unit this summer as her lease expires and her building is bought out by a new firm that markets its 3-bedroom models for 30% more than she currently pays. Anticipating a move when the lease ends, Longstaff has begun looking for alternative listings. For the $850 per month that she can afford, the only unit she has found is “a trailer with no air conditioning.”
In Boston, recent college graduate Amelia Kraus was able to negotiate her landlord’s proposed price increase of 20% down from 25%, but only after giving up her parking spot and reminding her landlord that she didn’t call the health department when her building’s basement was flooded with standing water and feces. Moving to a slightly cheaper place would be a huge hassle, she says, and the associated costs would likely result in her breaking even at best.
Freelance writer Eric Swedlund, who lives in historically affordable Tucson, Arizona, is stumped by a near 30% hike. He’s saving up for the cost of moving to a slightly cheaper apartment, but he won’t have enough by his lease’s end date. His apartment will allow him to rent month-to-month, for an even higher amount, but that will only further impede his ability to move. The other option, he says, is couch-surfing. “I might try to find some storage and crash with a friend for a while,” he says, “until I find something better.”
Solutions: Billions in unspent aid money, rent caps
The root of the problem is not as simple as villainous landlords exploiting a hot market. In Austin, Texas, landlord Erin Hittman felt guilty for raising the price on the one rental unit she owns by 20%. Then her property tax bill came. Even with the rent increase, Hittman is going to be in the red by over $1,000 per month after accounting for local taxes. “I’m losing a ton of money by being a landlord,” she says. “I’m fortunate I can hold on to this house for a little bit longer at this rate, and I’m going to honor the year lease that starts in July for my tenants because I gave them my word. But after this year, the 20% increase that I’m charging, it’s going to have to go way up.”
Solving the problem isn’t simple either. Some cities, like Minneapolis and St. Paul, Minnesota plus Boston and Santa Ana, Calif., are considering or have passed ballot measures that would allow the cities to cap annual rent increases, though that move could have the unintended effect of deterring smaller landlords from staying in the game at all, decreasing competition and increasing prices in the long-run.
In addition to the $47 billion in rental assistance, Congress also appropriated $350 billion to facilitate “State and Local Fiscal Recovery” from the pandemic. As of April, billions of those funds have not yet been designated to eligible projects like providing hazard pay to essential workers, replacing lost revenue, and creating new infrastructure. Oliva implores governments to channel some of that remaining money to housing needs: including to help renters with exorbitant price hikes in the short term, building more housing to mitigate the underlying demand-supply mismatch, and bolstering the existing housing voucher program for the most low-income renters.
With his lease ending in less than two weeks, deGraffenreid can’t wait for that sort of aid. He’s ecstatic to have just been approved for a slightly cheaper lease in Queens for $2,325, but the move itself is going to cost him and his partner about $5,400 that they didn’t plan for and can’t afford without family help—a crutch that many people don’t have.
Worse yet—if current trends are any indication—renters may find themselves having to do it all over again next year. OR they could use an apartment locator, visit AptExpert.com
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