VHFA News

By:
Leslie Black-Plumeau

According to Harvard’s Joint Center for Housing Studies’ annual State of the Nation’s Housing report released earlier this week, 2012 is likely to mark the beginning of a true housing market recovery. 

But the report also describes the complex dynamics of the current rental housing market, which is both helping to fuel economic growth while leaving more households severely cost burdened than ever before.  Demand for rental units has surged among American households in a range of age, household type, race/ethnicity, and income groups.  As renter demand has increased, falling vacancy rates in most of the nation’s largest metro areas have pushed rents up, the report explains.  Vermont’s experience has been no different—the statewide vacancy rate fell in 2011 and median rent increased, according to Census Bureau estimates. 

The gap between the number of low income renters and affordable apartments doubled between 2000 and 2010, the Harvard report points out.  “A range of forces have been at work to deplete the affordable rental inventory… nearly three of ten units renting for less than $400 in 1999 were lost from the stock a decade later” due to demolitions, conversions to seasonal use, and being moved up to higher rent levels.

The recession surpressed the ability of many young people to move out of their parents’ homes.  As the economy recovers, they are likely to leave, form new households, and further drive up the demand for rental housing, the report explains.  The critical role of HUD housing assistance, the Low-Income Housing Tax Credit program, and the mortgage revenue bond program administered by state housing finance agencies is highlighted in the closing of the report “not only to ensure quality of life for cost-burdened individuals and families, but also to repair the social fabric of entire communities damaged by the recession.”