Renters Face a Housing Squeeze via Businessweek

The housing market may be recovering, but for many renters, things aren’t looking up. Owning a home has become more affordable, renting less so. From 2008 to 2011, renters’ housing costs increased almost 6 percent, while their income fell 3.2 percent, according to a recent report from the Center for Housing Policy. More than 26 percent of working renters spent at least half their income on housing in 2011, up from about 23 percent in 2008. One reason: There just aren’t enough affordable rental units to go around. In 2010, there were 5.1 million more low-income families than there were affordable units.

Federal policy has long focused on supporting homeownership, most notably with the mortgage interest tax deduction. In about two-thirds of the country’s largest cities, owning a home is less expensive than renting within three years or less (accounting for the upfront costs of buying), Zillow says. Down payments and other upfront costs, combined with tight lending standards, put owning out of reach for many lower-income families. And President Obama’s proposed budget reduces funding for construction of affordable housing and put restrictions on public housing vouchers, the Wall Street Journal reports.

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