To Afford Rent, Teachers and Nurses Are Living in Smaller, Older Homes

Rhea-AI Summary

The Great Reshuffling presents both challenges and opportunities for housing affordability in the U.S., according to a new Zillow analysis. While remote workers benefit from lower costs in affordable areas, in-person occupations like teaching and nursing face escalating rent pressures. Over a decade of underbuilding has limited housing supply, fueling record price increases. The analysis highlights that teachers and nurses often pay significant portions of their income on rent, with many forced to choose smaller, older homes. Communities are urged to ease zoning restrictions to increase housing supply and improve affordability.

Positive

• Analysis shows remote workers can take advantage of more affordable housing markets.
• Research indicates easing zoning restrictions could significantly boost housing supply.

Negative

• Record rent growth presents challenges for teachers and nurses needing affordable housing.
• Only a small percentage of rentals are available to teachers and nurses at manageable rent burdens.

SEATTLE, Sept. 30, 2021 /PRNewswire/ -- The Great Reshuffling has the potential to improve housing affordability for millions of Americans able to work remotely from a less expensive market. But for occupations that require in-person work — teachers and nurses, for example — affordability is becoming more of a challenge as rent growth sets new records. Many renters in those in-person jobs are battling for a small slice of the rental market comprising smaller, older homes, a new Zillow® analysis shows.

The analysis highlights the impact that more than a decade of underbuilding has had on renters as well as the need for communities to make it easier to build homes. New construction in the U.S. has fallen behind by millions of homes since the Great Recession, helping fuel record home value growth and increasing pressure on the rental market.

"Many renters have been able to keep costs low even as prices have grown over the past several years, but merely affording rent does not mean they are thriving," said Zillow economic data analyst Nicole Bachaud. "A deeper look shows a big slice of the market is out of reach for workers looking to maintain a comfortable rent burden. That often means renting an older home with less space but a smaller price tag, or doubling up with roommates or a partner." 

While rent burdens — the share of income spent on rent — can appear low, especially when compared with recent growth in rent prices, renters often live with roommates or a partner, or target less desirable homes to keep housing costs manageable. The typical teacher spends about 22% of their income on rent, well below the widely accepted 30% rule for housing affordability. That's up only slightly from roughly 20% of income spent on rent five years ago, despite rent prices growing almost 24% over that period. To keep their rent costs this low, only a fraction of the rental market is available to teachers.

In Boston, for example, teachers on average only spend about 18.5% of their income on rent, down from about 20% in August 2016. But to do so, they must choose from only 6% of rentals in Boston that are priced low enough. Those homes are almost 300 square feet smaller and 33 years older than the typical Boston rental. While age does not always tell the whole story when it comes to quality, living in an older home increases the likelihood of living in unhealthy or unsafe conditions. 

Even in Tampa, where teachers spend almost 28% of their income on rent, just under the 30% affordability threshold and much higher than the 17.2% they spent five years ago, teachers are limited in their rental options. Only 2.2% of the Tampa rental market is available for teachers who don't want to exceed that share of income spent on rent each month. 

One way for communities to ease price pressures on renters is to make it easier to create new inventory, including relaxing zoning restrictions. Basic supply and demand is the primary driver of growing housing costs, so increasing the supply of affordable housing types can help meet demand. Zillow research has shown that even modest densification could exceed what is likely needed to meaningfully slow housing price growth over the long term.

"Boosting supply is the clearest path to improving affordability," Bachaud said. "Allowing for even small amounts of new density could have a big impact on prices." 

Nurses face similar hurdles in finding an affordable rental. While nurses who rent live affordably in all large metros according to the 30% rule, they are renting homes at least 100 square feet smaller than the typical rental in each market. In San Diego, where nurses spend about 24.5% of their income on rent, only 8% of rentals are affordable at that rent burden. 

Portland, Ore. is the most equitable rental market for nurses, with nearly two-thirds (63.4%) of the market available for nurses who spend 17.3% or less of their income on rent. The median rental available at that rent burden is 111 square feet smaller than the typical Portland rental, the second-smallest difference of any large market; affordable rentals for nurses in Washington, D.C., are 108 square feet smaller than a typical rental. 

Metro Area	Typical Rent Price in the Metro	Median Rent Paid	Median Rent Burden	Share of Rental Market Available at Current Rent Burden	Median Rent Paid	Median Rent Burden	Share of Rental Market Available at Current Rent Burden
New York, NY	$2,693	$936	18.5%	7.8%	$1,036	15.8%	5.2%
Los Angeles-Long Beach-Anaheim, CA	$2,630	$933	22.8%	8.2%	$1,374	20.3%	12.6%
Chicago, IL	$1,721	$675	19.0%	15.8%	$747	16.4%	19.3%
Dallas-Fort Worth, TX	$1,684	$807	18.0%	13.2%	$1,118	17.6%	23.9%
Philadelphia, PA	$1,705	$809	18.3%	7.3%	$1,358	21.0%	13.0%
Houston, TX	$1,519	$895	19.4%	29.5%	$912	15.9%	31.3%
Washington, DC	$2,125	$895	17.8%	18.3%	$924	16.2%	26.3%
Miami-Fort Lauderdale, FL	$2,343	$841	23.8%	3.8%	$909	21.7%	2.6%
Atlanta, GA	$1,827	$719	18.2%	0.9%	$1,056	22.2%	3.0%
Boston, MA	$2,532	$901	18.5%	6.3%	$895	14.2%	2.7%
San Francisco, CA	$3,092	$1,068	20.9%	13.3%	$1,686	17.0%	19.5%
Detroit, MI	$1,397	N/A	N/A	N/A	$649	14.4%	24.3%
Riverside, CA	$2,393	$927	27.1%	3.4%	$1,133	19.1%	8.1%
Phoenix, AZ	$1,806	$587	17.8%	2.8%	$910	13.4%	6.8%
Seattle, WA	$2,194	$971	21.7%	12.2%	$1,187	20.7%	25.4%
Minneapolis-St. Paul, MN	$1,590	$827	20.6%	28.6%	$899	19.3%	44.0%
San Diego, CA	$2,649	$1,224	24.5%	13.2%	$1,494	20.8%	8.4%
St. Louis, MO	$1,191	$541	12.0%	12.8%	$734	12.8%	38.5%
Tampa, FL	$1,876	$917	28.0%	2.2%	$1,025	19.5%	8.7%
Baltimore, MD	$1,775	$658	15.3%	13.5%	$934	19.4%	22.2%
Denver, CO	$1,903	$820	22.2%	32.6%	$1,152	26.9%	50.7%
Pittsburgh, PA	$1,218	$662	19.4%	17.7%	$987	18.5%	20.6%
Portland, OR	$1,773	N/A	N/A	N/A	$1,107	17.3%	63.4%
Charlotte, NC	$1,662	$590	16.0%	3.1%	$778	17.2%	6.5%
Sacramento, CA	$2,152	$768	21.3%	#N/A	$1,193	13.2%	17.4%
San Antonio, TX	$1,374	$791	15.8%	30.4%	$1,010	17.2%	40.0%
Orlando, FL	$1,798	$1,349	38.1%	6.1%	$838	18.2%	9.3%
Cincinnati, OH	$1,356	$571	14.2%	13.1%	$656	17.3%	14.7%
Cleveland, OH	$1,261	$407	9.6%	15.3%	$706	12.8%	11.6%
Kansas City, MO	$1,262	$597	13.9%	23.9%	$806	19.7%	45.4%
Las Vegas, NV	$1,718	$699	16.7%	4.4%	$981	19.6%	8.5%
Columbus, OH	$1,359	$736	16.8%	9.5%	$758	13.5%	14.9%
Indianapolis, IN	$1,391	$970	25.1%	19.4%	$634	13.8%	26.7%
San Jose, CA	$3,126	$1,175	20.1%	37.4%	$1,999	24.0%	53.4%
Austin, TX	$1,754	$744	20.9%	17.1%	$1,029	17.4%	25.7%
Virginia Beach, VA	$1,527	$588	16.6%	5.9%	$731	13.8%	5.1%
Nashville, TN	$1,768	$685	17.7%	6.6%	$792	19.3%	15.1%
Providence, RI	$1,785	$642	16.6%	5.3%	$1,088	23.6%	8.8%
Milwaukee, WI	$1,192	$431	12.6%	14.8%	$932	18.9%	14.9%
Jacksonville, FL	$1,629	$670	20.8%	10.3%	$874	17.0%	6.4%
Memphis, TN	$1,535	$764	19.8%	7.5%	N/A	N/A	N/A
Louisville-Jefferson County, KY	$1,145	N/A	N/A	N/A	$548	15.4%	8.2%
Hartford, CT	$1,604	$579	12.9%	3.3%	$982	25.2%	6.3%
Richmond, VA	$1,429	$1,094	26.6%	12.8%	$1,008	19.0%	31.6%
New Orleans, LA	$1,319	$517	13.4%	4.6%	$1,092	15.6%	27.4%
Buffalo, NY	$1,190	$426	14.6%	N/A	N/A	N/A	N/A
Raleigh, NC	$1,647	$561	14.6%	2.2%	$816	20.9%	8.5%
Birmingham, AL	$1,305	$427	25.4%	6.1%	$527	16.8%	11.0%
Salt Lake City, UT	$1,584	$484	12.9%	1.7%	N/A	N/A	N/A

*Table ordered by market size 

About Zillow Group
Zillow Group, Inc. (NASDAQ: Z and ZG) is reimagining real estate to make it easier to unlock life's next chapter. 

As the most-visited real estate website in the United States, Zillow® and its affiliates offer customers an on-demand experience for selling, buying, renting or financing with transparency and nearly seamless end-to-end service. Zillow Offers® buys and sells homes directly in dozens of markets across the country, allowing sellers control over their timeline. Zillow Home Loans™, our affiliate lender, provides our customers with an easy option to get pre-approved and secure financing for their next home purchase. Zillow recently launched Zillow Homes, Inc., a licensed brokerage entity, to streamline Zillow Offers transactions.  

Zillow Group's brands, affiliates and subsidiaries include Zillow®; Zillow Offers®; Zillow Premier Agent®; Zillow Home Loans™; Zillow Closing Services™; Zillow Homes, Inc.; Trulia®; Out East®; StreetEasy® and HotPads®. Zillow Home Loans, LLC is an Equal Housing Lender, NMLS #10287 (www.nmlsconsumeraccess.org).

 

View original content:https://www.prnewswire.com/news-releases/to-afford-rent-teachers-and-nurses-are-living-in-smaller-older-homes-301388607.html

SOURCE Zillow

FAQ

What is The Great Reshuffling in relation to housing affordability?

The Great Reshuffling refers to changes in housing dynamics where remote workers can move to more affordable markets, while in-person workers face rising rent challenges.

How has underbuilding affected the rental market in the U.S.?

Underbuilding over the past decade has led to limited housing supply, contributing to record growth in home values and escalating rental prices.

What percentage of income do teachers spend on rent?

Typically, teachers spend about 22% of their income on rent, which has increased slightly from 20% over the past five years.

What challenges do nurses face in finding affordable housing?

Nurses often encounter difficulties as they typically rent homes that are at least 100 square feet smaller than the average rental in their markets.

What solutions are proposed for improving housing affordability?

The report suggests that easing zoning restrictions and increasing new housing inventory could significantly improve affordability.