As the crisis of the U.S. rulers’ capitalist system deepens, they are stepping up efforts to place the burden on the backs of working people. One punishing expression of this is the growing shortage of housing working-class families, the young and the elderly can afford.
In the last quarter of 2024 a paltry 6,700 units with monthly rents that average $1,332 were under construction nationwide, compared to about half a million “luxury” apartments, according to CoStar, a real-estate company.
Landlords have taken advantage of this housing crisis to raise rents on working people, which have increased by 47% over the past five years. And prices to buy a home have shot up by 26%, to record-high levels.
Under capitalist rule the availability of adequate housing, like just about everything else, is sharply class-divided. In search of profits, construction bosses have churned out a glut of “upmarket” apartments, which now have a vacancy rate nationwide of 11.4%. In some cities with sizable upper-middle-class populations, like Austin, Texas, it’s at 15%.
For the wealthy and their cronies who can afford hefty monthly rents for digs that fit their lifestyles, landlords have been offering special deals to keep generating income on these properties, like two or three months of free rent on a one-year lease.
But no such deals are available for the working class. Far less housing is built for the likes of us, and landlords take advantage of the small number of available apartments to keep raising rents. This is the case in New York City, where the vacancy rate is just 2.8%. In fact, nationwide there’s a shortage of 7.3 million “affordable” housing units available to those with low incomes, the National Low Income Housing Coalition says.
In Los Angeles, where catastrophic fires have displaced tens of thousands of people this year, corporate landlords, looking to seize on the opportunity, are jacking up rents. Nearly 60% of those renting in the city before the fires already paid more than 30% of their household income on rent, cutting deep into funds families need to cover the sky-high costs of food, gas, medical care and child care.
Median rent in Los Angeles before the fires was about $3,000 a month, unless you were well-heeled enough to rent in Pacific Palisades, where median rent was $10,000 a month.
Similarly, in Maui, Hawaii, many households who were hit by the 2023 wildfires there ended up paying over 50% more in rent for places with the same number or fewer bedrooms than they had before.
With home-insurance premiums soaring — up 33% from 2020 to 2023, according to the National Bureau of Economic Research — increasing numbers of homeowners are being forced to give up their coverage. At the same time, big insurance companies like State Farm are refusing to renew hundreds of thousands of policies, particularly in areas they consider “high risk,” like in California, the Carolinas and Florida where fires and hurricanes have hit hard.
Mortgage rates rose to over 7% in January for the first time in six months. The rates are now more than double what they were at the beginning of 2022. This, together with high rents, places huge obstacles in the way of young workers hoping to get out of their parents’ place to live on their own and raise a family.
The monthly mortgage payment and maintenance cost on a starter home is $1,091 more than the cost of renting the same property, reports John Burns Research and Consulting. This forces workers who can’t get a mortgage to keep paying high monthly rents.
Increased eviction and homelessness
The rising cost of housing has also led to increased evictions and more workers thrown onto the street. Over the past year landlords have filed more than 1 million eviction notices in 10 states and 36 cities, from New York to Las Vegas. In addition, more than 200,000 rural families face eviction every year.
This has led to a huge jump in the number of ordinary workers and their families in the homeless population, up 30% over the past two years. And that’s just for those that government officials have been able to find and count.
Families with children saw the largest increase in homelessness. In New York City the number of homeless students has topped 100,000 for nine straight years.
What’s needed is a fight led by the unions for a federally funded public works program to build millions of decent, low-rent housing units, as well as hospitals and child care facilities, and to repair roads, bridges and other basic infrastructure.