America is building more apartments than it has in decades, yet renters continue to feel the pinch of high housing costs. Despite cranes dotting city skylines and developers racing to add new supply, affordability remains out of reach for millions. Rising rents, climbing energy bills, and reduced federal housing assistance are leaving many households struggling to cover even the basics.
A recent analysis by Harvard’s Joint Center for Housing Studies, highlighted in Bloomberg, reveals a sobering reality: while more units are being built, they are often targeted at higher-income households. For low- and middle-income renters, the gap between income and housing costs is only widening. (Bloomberg)
The Building Boom: A Double-Edged Sword
The U.S. has seen an unprecedented construction surge, with tens of thousands of new apartments completed and even more in the pipeline. On the surface, this should be good news more supply theoretically reduces competition and slows rent growth.
However, most of these new developments are luxury or market-rate units, often designed for higher-income tenants. Developers argue that high construction costs, zoning restrictions, and financing realities make it difficult to deliver truly affordable housing. As a result, the benefits of the boom are unevenly distributed, and the renters who most need relief are left waiting.
Who’s Feeling the Squeeze
The affordability crisis isn’t hitting everyone equally. Harvard’s data shows three key groups bearing the brunt:
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Low-Income Renters
Those earning under $30,000 per year are overwhelmingly cost-burdened, often spending more than half their income on housing. For these households, rent hikes can mean choosing between paying the landlord or putting food on the table. -
Middle-Income Renters
A growing share of households earning between $45,000 and $75,000 are also slipping into cost-burdened status. This marks a troubling shift: what used to be considered a stable income bracket now faces financial stress from housing. -
Working-Age Renters
Perhaps most concerning, Harvard found that 65% of working-age renters cannot cover their non-housing expenses like groceries, transportation, and healthcare after paying rent. Even full-time employment is no longer a guarantee of stability.
Beyond Rent: The Other Costs of Shelter
Rent is just one part of the housing equation. Other expenses are compounding the squeeze:
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Energy and Utility Bills: Rising fuel and electricity costs are increasing monthly housing-related expenses, particularly in regions with extreme weather.
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Housing Assistance Cuts: Reductions in federal support programs mean low-income households lose a vital safety net. For many, even a small reduction in aid makes housing unaffordable.
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Insurance and Fees: In certain markets, rising property insurance premiums and added fees (for parking, amenities, or maintenance) pile on additional burdens.
When combined, these costs often push households well beyond the “30% of income” affordability threshold.
Why the Boom Isn’t Delivering Affordability
Several structural issues explain why supply growth isn’t solving the crisis:
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Mismatch in Supply: Developers prioritize higher-end units, where profits are more reliable, leaving affordable housing underbuilt.
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Wage Stagnation: While rents and costs rise, wages for many households have not kept pace.
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Regulatory Barriers: Zoning laws, lengthy permitting processes, and neighborhood resistance slow down efforts to build diverse, affordable housing types like duplexes, triplexes, or small apartments.
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Geographic Inequalities: Housing challenges vary by region. In booming metros like Austin, Phoenix, or Miami, rapid population growth is outpacing even strong construction. Meanwhile, smaller markets also lack affordable options but receive less policy attention.
The Human Impact
Behind the numbers are millions of stories:
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Families doubling up with relatives to make rent.
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Young adults delaying homeownership because they can’t save while renting.
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Seniors on fixed incomes being forced out of longtime communities.
The stress isn’t just financial it’s emotional and social. When rent consumes most of a paycheck, renters have little left for education, healthcare, or savings. This erodes long-term stability and perpetuates cycles of poverty.
What Needs to Change
Experts suggest a multifaceted approach to address the crisis:
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Expand Housing Assistance
Restore or increase federal rental aid programs so the lowest-income households aren’t left defenseless. -
Incentivize Affordable Development
Tax credits, subsidies, or zoning bonuses can encourage developers to include affordable units in new projects. -
Reform Zoning and Permitting
Allow more flexible housing types like accessory dwelling units (ADUs), smaller multifamily buildings, and mixed-income projects that expand affordability. -
Control Non-Rent Costs
Policies that address rising energy bills, insurance premiums, and hidden housing fees can ease the burden without directly targeting rent. -
Wage Growth and Economic Policy
Housing affordability cannot be solved in isolation. Ensuring wages keep pace with living costs is critical.
Conclusion
The U.S. may be building more apartments than ever, but without deliberate policy action, millions of renters will remain trapped in a cycle of high costs and limited options. Affordability is not just about increasing supply it’s about building the right kind of supply, supporting renters through assistance programs, and addressing the broader economic forces driving costs upward.
Until then, the so-called building boom risks becoming little more than a mirage for the households who need affordable shelter most.
Source “US Renters Face Storm of Rising Costs.” Bloomberg, June 24, 2025. Read the full article here.