Renters also facing sticker shock
San José, CA – Gas stations, grocery stores and car dealers are not the only places people are facing sticker shock, as anyone looking to rent can tell you. Prices to rent an apartment are up around 20% over the last year.
While it is true that the biggest rent increases are for new tenants, and most tenants don’t face such large increases, the burden of rising rents is the single biggest factor in the 40-year high inflation rate cutting working people’s purchasing power. Almost one-fifth of inflation comes from rent increases, more than the more widely mentioned gasoline or cars.
Working-class and oppressed nationality/national minority (African American, Chicano, Latino, Native American, Arab American and Asian American) households are hardest hit by rising rents. We are more likely to rent and tend to pay a greater part of our income on rent than others.
An important reason for rising rents is soaring home prices. As homes become less affordable, landlords can more easily raise their rents, knowing that their tenants have less of an option of buying. With home prices up almost 20% over the last year, it is no wonder that rents are rising too.
Another factor in the rise in rents is the growth of corporate landlords. This is a hot new investment for Wall Street. One such firm, Blackstone, made $6 billion in profits over the last year, a sixfold increase. About half of these profits came from real estate.
Not only are these corporate landlords raking in massive profits, but they are also more likely to evict tenants behind on their rent. Evictions did fall from the 3.7 million per year before the pandemic because of the moratorium on evictions by the federal government. This has now expired, and even those states that extended their own eviction bans are ending. A few cities have introduced their own eviction ban, but landlords are pulling strings at the statewide level to stop these local eviction bans.
In many states, including New York, landlords can evict at will, without having to show any cause. New York renters owe the most in back rent of any state, and with their eviction moratorium having ended in January of 2022, more tenants are at risk of eviction than any state.
A needed change is rent control, which caps rent increases. Berkeley, California which had a strong form of rent control that limited rent increases to the rate of inflation plus any documented repair costs. But this law, along with a handful of other smaller cities, was overturned at the state level by landlord-backed politicians.
Despite the difficulties, tenants and their supporters are fighting evictions and rent increases across the country. These struggles will only grow as tenant are squeezed by rising rents and wages that are not keeping up with inflation.