Homeowners aren't the only ones facing a major housing crunch. Nationally, the number of working families paying more than half their income for rental housing (both multifamily and single-family) more than doubled from 1 million to 2.1 million between 1997 and 2005, according to The Housing Landscape for America's Working Families 2007, a study by the Center for Housing Policy. Almost 40 million households in America meet the study's definition of working families—households that work the equivalent of a full-time job and earn at least the annual minimum wage of $10,712, but no more than 120 percent of the median income in their area.
What caused the huge spike? Most likely a lack of rental supply combined with the subprime mortgage crisis, says Maya Brennan, lead study researcher for the report. “It's quite a catch-22 for renters,” Brennan says. “There's both more competition and fewer units [available].”
The study, published every two years, uses the most recent American Housing Survey data from the Census. A new feature in this year's edition examines the critical housing needs in 31 metropolitan areas. Some of the sharpest increases were in Denver, where the need shot up 162 percent between 1995 and 2004, and Charlotte, up 86 percent between 1995 and 2002.