What’s the biggest weakness of the multifamily market in the United States today? Brokers across the Midwest frequently point to the lack of affordable apartment units in their cities. The new apartment buildings rising throughout the region, they say, boast a slew of amenities and great locations in the heart of urban areas. But they also come with monthly rents that are too high for most of the population.
A new survey from Randstad US and Apartment Guide highlights just how difficult it can be for people to afford housing in their neighborhoods of choice. A key finding from the survey? 44 percent of respondents said that their annual residential expenses – including everything from rent and mortgage payments to utilties and household maintenance – increase more than their salary does each year. This is especially troubling for Gen Z workers, with 53 percent of these younger adults reporting that their annual living expenses rise faster than their earnings do every year.
A total of 42 percent of respondents said that they could not live in their desired neighborhood if they didn’t earn at least $60,000 a year, while 31 percent said they’d need to earn $100,000 or more.
This shows just how expensive it can be to live in the neighborhoods that so many desire. The lack of affordable housing only excerabates this problem
The high cost of rent across the country is forcing renters to get creative. The survey said that 39 percent of house renters, 38 percent of room renters and 33 percent of apartment renters have a roommate because they can’t afford to rent without the additional financial help.
Jim Link, chief human resources officer with Randstad North America, said that while young adults have traditionally faced tight budgets as they get their starts in the workforce, the financial crunch is more challenging today.
“Today’s increasingly high cost of living coupled with slow wage growth meants that, despite low unemployment, Millennials and Gen Zs are faced with at least two variables negatively impacting their financial well-being,” Link said in a written statement.
Emily Williams, senior data analyst for Apartment Guide, said that average national rent prices have increased by more than 4 percent during the past year. There are some cities, though, in which increases have been much higher.
“There are deals to be found in almost every city, but some renters might need to compromise certain amenities or locations, or even add a roommate, to live the lifestyle they want in areas where they want to be,” Williams said.