We’re all seeing prices going up at the pump and the grocery store. But if you’re renting, and your rent isn’t locked in or protected, you may be seeing major jumps on your rent too.
So what’s going on? A recent Washington Post article spelled out four major factors.
Four reasons your rent is going up
1. More people want more room
It’s a post-pandemic thing. With restrictions eased and a more pervasive sense of safety, many young adults are moving out of their parents’ homes. At the same time, many couples that got separated or divorced during the pandemic are looking for their own place now.
2. Buying is too expensive, so more folks are renting
The median home sale price rose 17% last year, climbing to a record high of $346,900 and pricing an estimated 1 million Americans out of the housing market. With more potential first-time home buyers renting, landlords have more leverage to raise their rent.
3. Pandemic rent freezes have ended
With rent freezes expiring, many renters say they’re expecting to face two years’ worth of rent hikes. Many regions have no safeguards against major rent hikes, so the jumps in rent are legit.
4. Wages have gone up, so more renters can pay more
The rise in high-paid, remote work is letting more Americans try out new places to live. That’s driving demand for short-term rentals, often while they shop for a new house to buy.
Locally, other factors are in the mix
Rents can bump up for lots of reasons, and many of them are complex and local, from legacy zoning laws to shiny new mega-stadiums.
In Inglewood, the Super Bowl’s SoFI stadium pushed up rents
Rents have been on the rise in Inglewood since plans for the stadium were announced in 2016, pre-dating the current trend. Since then, a one-bedroom has jumped from $1,100 to $1,750, double the increase seen in neighboring LA.
Inglewood has capped rent hikes at 3% a year, in part to keep locals in town. Roughly two-thirds of Inglewood residents are renters, according to census data in the Los Angeles Times.
In Boise, housing vouchers aren’t working
The median rent for a three-bedroom apartment in Boise, Idaho went up 20% over the past 12 months. With more high-income jobs in the city, more residents, especially newcomers, are willing and able to pay it.
But the Idaho Statesman recently profiled a single mother of three with a Section 8 voucher. Few landlords were even willing to consider her application, given the supply of more qualified candidates.
In Greenpoint, rents are as volatile as Manhattan
Few outer-borough areas have experienced the volatility of Manhattan’s rent ups and downs like Brooklyn’s Greenpoint. Once an underdeveloped outer borough of Brooklyn, Greenpoint saw rents fall during the pandemic then shoot back up again with an influx of new apartments attracting high-income white collar workers looking for more space in new buildings with better amenities.
The median rent was $2,750 in December 2019. A year later, it fell to $2,675 due to the pandemic. Then in 2021, rents rose to $3,150, then jumped again to $3,600 in late 2021.
In Chicago and Atlanta, new zoning is expected to drive up rents
In Chicago’s Lincoln Park and West Town neighborhoods, a new lawsuit claims creating “historic districts” will put up barriers to affordable housing.
In Atlanta, “some state lawmakers are trying to draw new city boundaries around race and class. Academics see it as a variation of “white flight.” It’s a bid to preserve property values by limiting housing that more people can afford.
How Bright can help you save up for a home
Bright can help you save for a rent bump, or a security deposit or even a down payment.
Bright’s MoneyScience™ AI studies your finances and finds the fastest, smartest way to reach your savings goal, moving money automatically, when it makes sense for you. You can set your goals, like a security deposit, and you can set your own pace - how much you want to save each month. Bright starts saving for you, week by week, automatically.
If you don’t have it yet, download the Bright app from the App Store or Google Play. Connect your checking account and your cards, set a few goals and let Bright get to work.