Housing insecurity

Trends in rent burden reveal just how bad housing unaffordability has gotten in the U.S. Six decades ago, only about a quarter of renters experienced cost-burden. The national share of cost-burdened renters began climbing in the 1970s and 1980s alongside rising income inequality and declining construction of affordable housing (due to a decline in federal funding of multifamily housing construction as well as an uptick in exclusionary zoning and land use policies). The share continued to grow throughout the 2000s, reaching a previous high during the height of the Great Recession. Afterwards, the share of rent-burdened households declined a bit throughout the 2010s only to dramatically increase in the wake of the COVID-19 pandemic. The trends for severe cost burden – paying more than 50% of monthly income on housing – follow these same trends. 

Unsurprisingly, high housing costs disproportionately impact renters with the lowest incomes. A staggering 83% of renters in the bottom 20% of the income distribution experience cost-burden and well over half of these renters experience extreme cost burden. Put another way, nearly 4 out of 5 low-income renters struggle with housing unaffordability today. 

Six decades ago, the average renter spent about 20% of their monthly income on rent. Now, they spend about 31% on rent. Median rent has increased by 75% in inflation-adjusted terms over this same time period.³

New Jersey is a state with very high housing costs and high shares of cost burdened renters. Using the latest data, New Jersey ranks 8th in terms of median rent ($1,557) and 11th in terms of median gross rent as a share of household income (30.4%). The share of rent burdened households statewide mirrors the nation – roughly 50%, up from about 40% in 1990.⁴

Renter cost burden in our region is above the state average. 50.4% of renters in the Trenton-Princeton metro area (i.e., Mercer County) are cost-burdened. About 27.1% are severely cost burdened. About 37% of renters in Princeton are cost-burdened, a figure that is still high by historical standards, but also likely reflects how poorer renters have been pushed elsewhere due to a lack of affordable housing. It certainly does not reflect housing affordability in Princeton – our municipality ranks in the top 50 highest median gross rents in the state over the past five years ($2,320).⁵

A major consequence of such widespread housing unaffordability is displacement. Most often, this happens when households are forced to move due to an inability to afford housing costs. More consequentially, when there’s nowhere else to go and an individual or family still can’t afford rent, they are oftentimes involuntarily displaced through eviction. This is less common than other forms of displacement, but still far too common. Millions of evictions are filed every year, averaging 3.6 million per year between 2000 and 2018 – equating to about 7.6 million individuals facing eviction every year.^6 7

Evictions are tremendously disruptive and have disastrous consequences for those who suffer them. Most obviously, they can cause an individual or family to become homeless, a state that can become chronic. More regularly, they force an abrupt move, which can result in a child changing schools or disrupt social networks.⁸ Evictions have been linked to a number of negative health outcomes like depression, negative birth outcomes and poorer child health, and higher mortality in general. Eviction filings, even when they are dismissed, can permanently marr someone’s rental history, making it more difficult for a household to ever attain housing, especially decent-quality housing. This perpetuates the cycle of poverty for millions of individuals and families.

Evictions are far from evenly experienced. Black renters, especially Black women, are at much higher risk. Fewer than 1 in 5 renters in the U.S. are Black, but Black renters account for 51.1% of all eviction filings. Households with children are at particular risk. Children are the demographic group most at risk. 2.9 million children are threatened with eviction every year and 1.5 million are evicted. Children under 18 represent 4 in 10 of all people threatened with eviction. These factors interact such that Black families with children face by far the highest threat of eviction. These racial disparities remain even for higher-income households.⁹

It is worth keeping in mind that these are statistics for formal evictions only. They don’t count informal evictions (for example, a landlord changing the locks or a household moving out when threatened with eviction) which are likely far more common than formal evictions. Likewise, these statistics do not account for the far more common problem of households being priced out of their homes or neighborhoods. 

In 2018, about 12.1 evictions were filed for every 100 renter households in New Jersey – well above the national average of 6.8. In Mercer County, the prevalence of eviction was even more pronounced – an estimated 15.2 evictions were filed for every 100 renter households in 2018. Despite being above the national average, the prevalence of eviction filings in New Jersey and Mercer County decreased a bit since 2013.¹⁰ Though it is difficult to know with certainty given a lack of eviction data in New Jersey, it is likely that evictions have been back on the rise since the COVID-19 pandemic.

Very tight rental markets characterized by very low vacancy rates compound housing insecurity by making it even more difficult for renters to compete for scarce rental housing. These are conditions ripe for renters being turned away due to strict screening procedures, if not outright discrimination. 

So what are some of the barriers? For one, renters face barriers to finding out about different housing opportunities. Most people rely on their social networks to locate housing, which means that our segregated social networks reproduce segregated living patterns, but also maintain disparities in the kind and amount of information members of different socio-demographic groups can access. For instance, Craigslist ads tend to offer less information about rental units but also more information about background checks and disqualifications in Black and Latino neighborhoods neighborhoods. Moreover, online housing searches can be undermined by discriminatory practices.¹¹ Facebook recently entered into a settlement agreement with the U.S. Department of Justice for using a discriminatory algorithm to steer people into housing advertisements based on their racial and other demographics. 

Yet, a lack of access to information or even information disparities hardly forms the most important barriers to stable housing. Renters are almost always screened on credit history, rental history (including prior evictions), and criminal history. Deficiencies in any of these records can make attaining decent housing extraordinarily difficult in general and particularly so in an environment with few housing options. Much of this screening is increasingly automated, which makes it very difficult for renters to advocate for themselves when they don’t meet strict and oftentimes arbitrary cutoffs or when they are disqualified due to inaccurate consumer data information.¹² 

Discrimination is another obvious and widespread issue. Though its prevalence has decreased over the decades, it still regularly happens. One example is steering – when real estate agents attempt to influence their clients towards certain neighborhoods based on client demographics. Evidence demonstrates that this practice still occurs today.¹³ A related form of discrimination in the housing market includes disparities in home appraisals, particularly for Black households. A widespread form of oftentimes legal discrimination in the rental market is source of income discrimination (SOI) – when landlords deny housing choice vouchers (HCVs) as a valid form of rental payment. This kind of discrimination greatly undermines the effectiveness of the largest rental assistance program in the country, even in states like New Jersey that have deemed it illegal. Two other forms of largely legal discrimination that severely limit housing stability for two subpopulations include denying a lease to those with a prior eviction as well as those with involvement in the criminal justice system. Those with a prior eviction or a criminal record face nearly insurmountable barriers to stable and decent housing and are often forced to settle for the lowest quality housing, if any housing at all. Finally, immigrant households, particularly those with mixed immigration statuses or those lacking documentation, often face discrimination when trying to secure housing – situations that arise in New Jersey even among those with protected immigration statuses.

Searching for an apartment, especially in competitive markets, is a lot of work, especially because of all these barriers. Many lack the time and capacity to conduct a thorough housing search and navigate these barriers. Many low-income renters in particular work long hours, sometimes across multiple jobs and oftentimes with unstable working hours. In many cases, lack of access to a car or child care further complicates housing searchers for these renters.¹⁴ 

Last but not least, landlords regularly charge a litany of fees that make housing unaffordable beyond monthly rent. These fees include application fees and security deposits, but also holding fees, pet fees, among others. Many of these fees, particularly application fees and holding fees, require disadvantaged renters to guess which applications will work out, with no guarantee that any opportunity will come through.

Renters in New Jersey struggle with all of these barriers, even though they are entitled to some of the strongest fair housing protections in the country through anti-SOI discrimination laws and the Fair Chance in Housing Act. This goes to show the limitations of regulatory protections in the face of deep housing shortages. The latter often end up undermining fair and affordable housing even with strong renter protections. 

Housing unaffordability is a leading indicator of housing insecurity, but poor quality housing is another important one. Given our profound lack of affordable housing, many low-income renters are forced to settle for old and low-quality housing units. These renters live with health hazards within their homes such as mold, lead paint, poor ventilation, and a lack of reliable heating and cooling systems. These renters are also disproportionately likely to live in neighborhoods with a high concentration of environmental pollutants, poor traffic safety and a much higher prevalence of pedestrian fatalities, targeted tobacco advertisements, and crime.

Overcrowding is another risk factor. This often occurs due to a strategy oftentimes referred to as doubling-up: moving in with family, friends, and sometimes mere acquaintances as a way to save on housing costs. Of course, there are good reasons to encourage shared living spaces. Shared living spaces and intergenerational living arrangements are not only ways to make better use of the housing stock that we do already have, but are also a potential means for addressing increasing concerns about social isolation. Yet, there is an important difference between shared living spaces and overcrowding. HUD defines this as households with more than 2 persons per bedroom. These are often situations in which precariously housed individuals and families, oftentimes immigrant families, are forced to crowd into housing units not meant to accommodate the number of people living there. These are situations where renters are highly susceptible to exploitation from landlords or real estate professionals who can take advantage of the high demand and limited supply of housing and overcharge renters or neglect housing maintenance. Many renters in these situations face the threat of retaliation from landlords if they press for the remediation of health hazards in their homes.¹⁵