Why Double Digit Rent Hikes Are Here to Stay

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. Last year deGraffenreid signed a contract for $1,600 per monthly. They received notification on February 11 that their new lease would start next month at $2,750 per person. This 69% increase was a shock.

“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. Best of luck!’”

He isn’t alone. Similar rent increases of double-digit magnitude are occurring all across the nation. Rents in Henderson, Nevada rose by 26% between 2021-2022 according to Zumper. In New York City, they jumped 30%. Rents will rise 39% in Miami, according to most people. Rent for one bedroom apartments rose by an average of 12 percent between March 2021-2022. This was the 11th consecutive year when average rents for one-bedroom apartments reached an all-time high.

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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.

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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. In order to prevent evictions in the current public health crisis, legislators appropriated almost $47 billion between 2020 and 2021. Experts say that $22 billion remains unspent and could be used in theory to assist people who are facing displacement due to rent spikes. 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 and Kraus.

There is certainly not enough 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 Olivia, vice president for housing policy at the Center on Budget and Policy Priorities, “and we have to make people whole right now.”

Retirement, Couch Surfing and Praying for a Miracle

Sara Longstaff is a Miami mother with two special needs kids. Her lease is up and she will be facing an increase in rent on her 3-bedroom unit. A new company is buying her building. They are offering the 3-bedroom units for 30% less than what Sara currently pays. Longstaff began looking at other listings in anticipation of a possible move. 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. She says that moving to a cheaper location would prove difficult and would result in breaking even.

Eric Swedlund is a freelance writer who lives in Tucson, Arizona. He has been hit by an almost 30% increase in rent. 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. Although his apartment allows him to rent monthly for a higher price, it will limit his freedom to move. He suggests couch-surfing as an alternative. “I might try to find some storage and crash with a friend for a while,” he says, “until I find something better.”

Solutions: Unspent Aid Money, Rent Caps

But it isn’t as easy as landlords who exploit a hot property market to cause the problems. Austin’s Erin Hittman was guilty of raising the rental price for the unit that she owned by 20%. Her property tax bill was then sent. Hittman will be paying over $1,000 per month, even with the increase in rent. “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. It is not easy to solve the problem in some cities like Minneapolis, St. Paul and Santa Ana in California. They have already passed or are currently considering ballot measures that would permit cities to limit annual rent increases. However, this move may have the unfortunate effect of deterring small landlords from remaining in the business, decreasing competition, and ultimately increasing long-term prices.

In addition to the $47 billion in rental assistance, Congress also appropriated $350 billion to facilitate “State and Local Fiscal Recovery” from the pandemic. Millions of these funds were not designated for eligible projects as of April. These include providing hazard payment to critical workers and replacing revenue lost. Olivia urges the governments to funnel some of the remaining funds to housing needs. This includes helping renters to cope with high prices in the short-term, building additional housing to alleviate the demand-supply mismatch and strengthening the current housing voucher program for 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.

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