Rising Rents Are Squeezing Older Adults

rising-rents-are-squeezing-older-adults

By Richard Eisenberg, Next Avenue

getty

Sharon Greenfelt Kersten, a 70-year-old publicist, loved the $1,900-a-month Fort Lauderdale, Florida, two-bedroom rental house where she lived and worked. But in November 2021, her landlord told her he planned to raise the rent by roughly 40%, to $2,800 monthly.

“I absolutely could not afford that,” says Kersten.

So, she wound up moving to a nearby $1,400-a-month, one-bedroom apartment without a washer/dryer or dishwasher. “I’ve downsized substantially,” Kersten says. But at this point in my life, she notes, “it’s a question of want versus need.”

‘Please Don’t Raise My Rent’

Kersten is already strategizing what she’ll say to her new landlord when the lease is up in January. “I plan to call him in October and do a little begging,” she says. “I’m just going to say: ‘I want to be here forever. Please don’t raise my rent.'”

About 225 miles northwest, in Bradenton, Florida, freelance writer Sandra Gurvis, 71, has a similar story. She sold her house in Columbus, Ohio, in January 2020 and relocated to a two-bedroom, $1,625-a-month apartment in the small city next to Sarasota she “fell in love with.”

But Gurvis’ monthly rent rose to $1,675 at its renewal and she recently learned it would go up by at least $300 a month in November, for a roughly 20% increase since she arrived. “I hope to God I’ll be able to deal with this,” Gurvis says. “It’s terrible.”

Their stories are all too similar for many renters in their 60s and 70s struggling with huge rent hikes, although rental housing experts offer a few suggestions, as you’ll see below.

“It’s got to be really, really hard for some folks,” says Kate Terhune, director of brand marketing for Rent.com, the engine behind Redfin Rentals. Housing costs represent the greatest expense, and biggest share of household budgets, for Americans 55 and older, according to the National Council on Aging.

The Rent Surge Across America

The median monthly rent in America’s 50 largest metro areas hit $1,876 in June, a new record after 15 consecutive months of increases, according to Realtor.com. It’s over $3,000 in places like New York City and San Francisco, where tenants routinely spend more than 30% of their income on rent (more than what financial advisers typically recommend).

Rents in America have risen 14%, overall, since June 2021, going up much more than wages. And they’re now 28% higher than in 2019.

In many popular Sun Belt retirement spots, rents have soared even more: by more than 30% over the past year in Sarasota/Bradenton, Miami, Fort Lauderdale and West Palm Beach in Florida and in Tempe, Arizona.

“There’s a lot of people who are moving into cities that seem to be cheaper to live, but the more people that move there, the more the prices go up,” says Terhune. “We’re seeing it all over the place.”

Tight Vise on Low-Income Renters

As Harvard researchers noted in The State of the Nation’s Housing 2022, “job and income losses over the past two years have left many lower-income households and households of color unable to cover their rents and potentially at risk of eviction.” More than 14% of renters are in arrears.

“One third of older adult households have no money left each month or are in debt after meeting essential expenses,” Mary O’Donnell and Naomi Stanhaus of the RRF Foundation for Aging wrote in the July-August 2022 edition of “Generations Today.”

The current rent ruckus stems partly due to landlords making up for their inability to raise rents early in the pandemic and today’s vacancy rates at their lowest point in 35 years.

A recent edition of HBO’s “Last Week Tonight With John Oliver” quoted the Monarch real estate company’s owner talking about the prospect of rent hikes this way: “We have an unprecedented opportunity, at least in my working lifetime, to really press rents on renewals…. Where are people going to go? They can’t go anywhere.”

Since prospective renters now often have few places to choose from, that’s led to rental bidding wars. Some are even writing “love letters” to landlords, hoping their personal notes will help them snag housing.

The steep rise in rents has moderated a bit lately, but housing analysts expect rents to keep going up due to severe constraints on the supply of apartments and rental homes. Although there’s strong growth in construction of apartments, most of those are high-end buildings.

“For lower-income households … the pressure of high housing costs is unlikely to relent,” wrote the Harvard researchers.

Giving Up on Renting

Some older renters are giving up on renting altogether.

A few months ago, Boca Raton, Florida, retirees Ed and Lucy Gruvman were told their $2,220 monthly rent would jump by about 15%. That would’ve been tough, Ed says, since they live on Social Security. So, the couple moved into a condo Ed’s late parents had owned.

“I told my wife, ‘Why do we have to pay $30,000 a year when we have my parents’ apartment?'” says Ed. “Landlords are taking total advantage of the situation.”

Their Boca apartment has since gone on the market for $3,000 monthly.

In 2021, Abe and Laurie Gorelick, a marketing consultant and interior designer in their mid-60s, learned their landlord planned to raise the rent on their one-bedroom townhouse in Sudbury, Massachusetts, by 10%, to more than $3,000 a month.

“I said, ‘That’s not gonna happen,'” says Abe. “I’m not paying that.” After getting the landlord to hike the rent by just 5%, the Gorelicks spent the next year looking for a more affordable place. Good thing, too. Their landlord recently announced plans to hike the couples’ rent by 29%, to $4,017.

The Gorelicks moved out in July and into a three-bedroom house about two hours away on Cape Cod costing them about $2,600 monthly.

Advice to Combat Soaring Rents

Relocating to a less-expensive area is one way to tackle rising rents. Here are other suggestions from experts:

  • Call The HOPE Hotline (888-995-HOPE). The National Council on Aging says this line offers free renter counseling and education.
  • See if you qualify for state or local rent subsidies. The National Low Income Housing Coalition has an online list of over 300 state and city funded rental housing programs. Some of these programs, however, have long waiting lists. Others run out of money quickly; when Tampa, Florida offered $5 million in rental assistance recently, the relief money was gone in two days.
  • Ask your landlord for a two-year lease. This would help you lock in a rent amount for longer than the standard one-year lease. “Sometimes, longer lease terms can come with a nominal deduction from the monthly rent,” says Terhune.
  • Try to negotiate the size of your rent hike. You may be able to get a smaller percentage increase by asking. Or your landlord might reduce your cost if you give up an amenity such as a parking space. “Say, ‘I don’t need this amenity and I’m not going to be using it. Can I have a slightly reduced rent because I don’t need it?'” suggests Terhune.
  • Consider relocating to a less expensive region. These days, the nation’s lowest rents are in North Dakota, South Dakota and Montana, according to the Consumeraffairs.com site.

The Biden administration in May 2022 announced a series of actions to make renting more affordable, especially for low- and moderate-income Americans. They include offering builders’ incentives to construct apartments and rental homes as well as expanding the Low-Income Housing Tax Credit. But some of these proposals will take time; others will require Congress’ approval.

For now, Terhune offers this guidance for renters: “The name of the game is: Figure out where you can save money and just buckle down and hold on, because the housing market will normalize again. I think we are just past our peak of seeing tremendous rate increases.”

Leave a Reply

Your email address will not be published. Required fields are marked *

student-loan-borrowers-should-write-down-these-critical-dates-for-loan-forgiveness-and-repayment

Student Loan Borrowers Should Write Down These Critical Dates For Loan Forgiveness And Repayment

crypto-markets-see-flood-of-queen-elizabeth-memecoins-and-nfts

Crypto markets see flood of Queen Elizabeth memecoins and NFTs