College seniors and senior citizens will suffer the more than other groups with rising rent burdens.
A recent study from Harvard projected what rent burdens could look like over the next few years, and young millennials looking to get out on their own and senior citizens will likely become the most rent burdened people in America.
Graduating college in May 2015, an education major from Millersville University moved back home with his parents after living on-campus and renting with friends for the last four years.
“High rent prices played a huge role in me moving home,” Niko Metricarti said. “Having to pay for loans is just as much as a rent payment so I’d rather stay home and pay loans than pay for both.”
One in four renters struggle to pay high rents as approximately 11.2 million renters spend half or more of their income on rent according to the Harvard study. These 11.2 million people are forced to compete for 7.3 billion units that are affordable, even if the cost is strenuous on their budgets.
Millennials are expected to face a lot of challenges because of living right after the Great Recession, and rent burdens are no exception. This generation is less likely to buy a home than previous generations were, which causes them to deal with high rents longer.
Metricarti lived in the dorms and then lived in apartments with friends throughout his time in college.
“I called college my home away from home,” Metricarti said. “I had a sense of family through my network of friends while there so it felt like home to me.“
Now that Metricarti is without that support system, it would be much more difficult to live on his own.
It will be even harder for the elderly to afford housing as the number of individuals aged 65 or older is expected to increase by 33 million in 2030. The average older renter could not afford one month in a nursing home compared to the 42 months for the average homeowner could afford.
An Engagements in the Common Good course that is offered at Cabrini titled ‘Growing Old Together’ focuses on the way that different cultures treaty the elderly. Each culture will face an aging population as birth rates lower and people live longer.
“Nobody’s sure what to do about it,” Dr. John Cordes, professor of the course, said.
Cordes mentioned that many elderly want to stay at home because there’s a sense of familiarity for people, but when they only receive 35 to 45 percent of their income from when they were working from Social Security, that’s not always possible.
“If you are a retired butcher at the Acme with a pension and a wife, and you want to move to a place [like White Horse Village], you would probably have to opt for a lower end accommodation,” Mary Kay Burke, president and CEO of White Horse Village, said. “But you have to have a pension, you have to have saved well, and you have to be able to afford the monthly fee.”
According to Burke, this type of continuing care retirement community is directed mostly at upper middle class to high income elders because of the high costs for care.
The dangers that high rent costs create for renters are scary for both the Millennial Generation and aging Baby Boomers, but the Millennial generation has an opportunity that their older counterparts do not.
They have time to make changes that lead rent trends in a different direction.
While there are millennials who have made the move to living on their own after college, Metricarti seems to see that this is the less likely scenario.
“If somebody moved from home it was because they found a job immediately after college that caused them to move,” Metricarti said. “For all of my friends that haven’t found a steady job in their career, most if not all of them are living at home and still looking for a career.”
