Freddie Mac Multifamily has released an analysis showing Rental Affordability Is Worsening. The study compares rent increases in specific units over time by examining loans that Freddie Mac financed two times between 2010 and 2016, comparing the exact same rental units and how affordability changed. Of approximately 100,000 units, 11.2% were deemed affordable for very low-income households at the time they were first financed. Only 4.3% of the same units were determined to be affordable for the same group after the second financing because rents had increased significantly. “Very low-income” (VLI) is defined as households making 50% of the area median income, and “VLI affordable units assumes that housing accounts for no more than 30 percent of income.”
The study noted that increasing rents, combined with lethargic household income increases, potential changes to public subsidies, and newly-constructed rental units serving higher income levels, severely limit availability for lower-income renters. According to the study, in seven of the nine states where Freddie Mac financed a significant number of rental units, there was a sizable drop in the percentage of affordable units over time.