Faced With Soaring Costs, Tight Supply, Renters Tap Crowdsourcing, Government Aid

Charity begins at home, and home is often the endpoint as well. In a rental housing market that’s got millions feeling frantic, desperation is yielding to innovation and improvisation.

Anyone who’s gone on the hunt for a regular rental lately is aware of the price increases and shortages in the market now. It’s been trending since at least the start of the year.

In its report “America’s Rental Housing 2022,” the Joint Center for Housing Studies of Harvard University (JCHS) said this began last year, noting that the on a “resurgence in demand, the overall rental vacancy rate dropped to just 5.8 percent—its lowest reading since the mid-1980s.”

JCHS added that “strong demand also caused rents to increase; asking rents for all professionally managed apartments spiked in the third quarter last year, led by a 13.8 percent jump for units in higher-quality buildings.”

Rent.com reported on May 13 that prices are up by double digits year over year with one-bedroom units rising 26.5%, and two-bedroom rents up 25.7% so far in 2022.

For added context, on Wednesday (May 18) vacation rental data firm AirDNA said short-term rentals (STRs) in New York City controlled by Airbnb and Vrbo now number 22,000 compared to 7,500 rental listings in the area.

See also: NYC Has More Airbnb, Vrbo Rentals Than Apartments

A Local and Global Problem

With the National Association of Realtors (NAR) reporting in early May that “The first quarter of 2022 saw more markets reach double-digit annual price gains,” with 70% of 185 measured metros spiking — a four percentage point increase in one quarter — homeownership is not an option for tens of millions, and with rents spiking, renters are between a rock and hard place.

NPR Marketplace reported in April that “before the pandemic, rents were generally going up about 3% from one year to the next,” compared to an average 15% hike nationwide now.

To pull together standard first, last and one month’s security deposits native to apartment renting — and in many cases, to meet high rent payments — some are using crowdfunding.

For example, on Wednesday (May 18) The Guardian Australia reported that “local fundraising campaigns on the platform related specifically to providing basic housing and accommodation needs” rose 327% since May of 2021.

GoFundMe Australia Director Nicola Britton told The Guardian that the uptrend in using the platform to fundraise for housing is “a clear picture of those falling through the cracks of traditional support. The response we are seeing to the housing crisis is reflective of a much deeper systemic issue that requires special attention.”

In a blog post, GoFundMe posted a comprehensive guide to crowdfunding and other resources for accessing emergency rental assistance from an assortment of public and private sources.

See also: FinTechs, Issuers Rally to Ease Rental Housing Crunch

Treasury’s Rent Assist Looks Ahead

After the U.S. Supreme Court ended the pandemic moratorium on evictions in August of 2021, and with most or all state-level extensions of that moratorium now expired, the federal government is moving with more urgency on Emergency Rental Assistance program funds.

On March 30, the U.S. Treasury Department said “through February 2022, state and local Emergency Rental Assistance (ERA) grantees have made over 4.7 million payments to households and spent or obligated approximately $30 billion in assistance of the program’s total $46 billion. Treasury expects the vast majority of the remaining funds to be deployed to households or paid to grantees by the middle of 2022.”

“Treasury is sharing its reallocation process for ERA2, the program’s expansion under the American Rescue Plan. Treasury’s approach to reallocating ERA2 funds is designed to ensure as many low-income renters as possible have access to this assistance during the pandemic”

Deputy Secretary of the Treasury Wally Adeyemo said, “In just one year, the Emergency Rental Assistance program built a national infrastructure for eviction prevention that never existed before and has helped keep eviction rates well below historic averages throughout the pandemic.”

“As these emergency funds run out, now is the time for state and local governments to leverage this infrastructure to provide services like right-to-counsel programs and housing counselors that will help families avoid economic scarring long after COVID-19 is in the rear-view mirror,” he said.