Affordable rental homes hard to find

Affordable rentals are few and far between. By Tami Luhby, senior writerApril 26, 2011: 6:20 PM ET

NEW YORK (CNNMoney) — Can’t afford to buy a home? You might have a tough time finding a cheap place to rent too.

A record number of renters are spending more than half their income on housing, according to a report released Tuesday by the Harvard Joint Center for Housing Studies.

One in four renters — or about 10.1 million households — spend half their paychecks on rent and utilities, the study found. Another 26.2% spent between 30% and 50% of their income on housing. This is due in large part to rising housing costs and weak income gains.

The center defines “affordable” as less than 30% of household income.

“In the last decade, rental housing affordability problems went through the roof,” said Eric Belsky, managing director of the Harvard Joint Center for Housing Studies. “And these affordability problems are marching up the income scale.”

Though most renters are low-income, more middle-income renters are feeling the pinch, too. One in five of those in middle-income quintile are paying between 30% and 50% of their pay in rent, up from 9% a decade ago. The middle-income quintile are those making between $42,000 and $62,900.

The number of renters is also expanding as the housing crisis drove many people out of their homes and prevented others from securing mortgages to buy houses. An additional four million people were renting in 2010, compared to 2005, Belsky said.

Making matters worse, the supply of affordable rental housing has been shrinking. Nearly 12% of low-cost market-rate rentals that existed in 1999 were demolished or lost from the housing stock by 2009. And there is little new multi-family buildings being built in the wake of the housing crisis. 

First Published: April 26, 2011: 4:31 PM ET