US Rents Rise on Excess Demand; Eviction Increase
Demand for rental units in the United States has spurred a drastic increase in rental rates across the country which in turn is seeing a lot of tenants being evicted from their homes.
Rents in the United States have gone up seven percent in this year alone, but incomes are barely matching the rate at which rents are increasing. A report by Zillow, this year, found that Americans are spending almost 25 to 30 percent of their income on rents. But missing one single payment could mean receiving a termination of tenancy notice from the house owner.
According to CNN Money, evictions have increased to 28,000 a year in Wisconsin, while more than 200,000 eviction filings have been made over the last one year in Georgia. In San Francisco, the rental board reported 2,064 illegal evictions - a figure that ballooned 45 percent since 2011.
"Rents have skyrocketed to the point that an Ellis Act eviction is tantamount to an eviction from the city. People who are not wealthy cannot afford to stay. This effects, naturally, the most economically vulnerable people more profoundly," Evan Wolkenstein, a teacher and activist from San Francisco, told CNN Money.
The problem here lies in the fact that landlords are either upping the rent or getting it vacated and selling it to developers who are converting these spaces into condos. But that's not just it. More Americans today prefer renting than buying. A recent survey by the Federal Reserve Bank of New York explained why the trend of renting is so hot right now.
One of the major reasons was availability of mortgages. Almost two thirds of the people surveyed said that they would find it difficult to qualify for or obtain a home loan. Also, student loan debt is major factor that is holding back buyers from taking the property plunge.
Also, buyers are now waiting it out for a better crop of homes, lower prices and mortgage rates. They now prefer to rent than to buy out of choice and not just out of financial constraints.
"We are seeing a more mature renter, somebody to whom price is not a large decision-making factor, but we're also seeing the type of renter who just wants to live in an environment that feels much more like a neighborhood," Stephanie Williams, a senior vice president at The Bozzuto Group, was quoted by CNBC.