More renters are expected to have trouble finding affordable apartments as demand outpaces supply in New Jersey, according to housing groups.
The problem developed following the 2008 housing-market collapse, which drove bankrupt people and owners of foreclosed homes into the rental pool. And damage from Hurricane Sandy knocked some rental properties off the market indefinitely.
“The storm made a bad problem worse. There is a lot more competition for rentals, let alone affordable rentals,” said Nina Arce, a spokeswoman for the Housing and Community Development Network of New Jersey, based in Trenton.
New Jersey annually ranks among the states with the nation’s highest rents, she said. It ranked No. 4 last year behind only New York, California and No. 1 Hawaii, according to her group’s annual housing survey published this month.
A renter in New Jersey needed to make an hourly wage of $24.84 last year to afford a two-bedroom apartment at the state-average monthly rent of $1,292, the group said. By its measure, housing is affordable if it costs no more than 30 percent of one’s income.
North Dakota had the nation’s lowest rent, requiring an hourly wage of just $12.06 to find affordable housing. The state’s average rents are half as much as New Jersey’s.
While it is too early to say what long-term effects a tougher rental market will have on New Jersey, Arce said, she suspects it will hit two groups hardest.
“It’s really challenging for retirees who are living on a fixed income and for people who just graduated from college,” she said. “The governor has talked about brain drain, retaining college grads. But if they can’t afford to live here, they won’t stay. We’ll lose the work force.”
Chimobi Wokocha, a naturalized citizen from Nigeria, said high rents in New Jersey have made him consider leaving the state for North Carolina. He recently found a new roommate for the townhouse he rents in Galloway Township. Wokocha, a truck driver, had shared the house for three years with his brother, who moved out in December after getting married.
“I can’t afford the place all by myself. The monthly bill is $1,150, plus utilities,” he said. “It hasn’t been easy. Having a roommate would take some pressure off.”
Wokocha said family members who live in North Carolina pay as much as 50 percent less in rent than he does. But leaving the state is not a great option, because his children are here, he said.
“I’ve thought about it. But the thought of being far from my kids keeps me around,” he said.
A drop in household income since the 2007 recession means more people are paying more of their income than ever in rent, according to a Harvard study published in December.
Nationally, more Americans are becoming renters, up from 31 percent in 2004 to 35 percent in 2013 — or 43 million people, according to the Joint Center for Housing Studies of Harvard University. Foreclosures drove much of this increase, displacing millions of homeowners across the country.
The recession, coupled with higher unemployment, also created a greater demand for rental homes.
People 75 and older represented the only age group that did not see a rise in renting from 2004 to 2013. All other age groups increased, particularly those ages 35 to 39, among whom renting increased by 11 percent. Historically, this age group represented a more stable demographic of homeowners before the recession.
Not surprisingly, affordable housing is hardest to find for low-income renters, whose numbers surged by 3.3 million people since the recession, the Harvard study found. Those receiving publicly subsidized housing increased by just 225,000 over the same period.
The number of unassisted very-low-income renters who paid at least half of their income toward housing jumped by 2.6 million people to 8.5 million people nationwide.
Demand for rental housing makes shared housing more appealing. Local want ads are filled with requests for rooms and roommates.
Kevin Mays, 31, a teacher’s assistant in Mullica Township, advertised for a roommate for his Hamilton Township apartment. The rent there is $1,500 per month plus utilities.
Mays estimates 40 percent of his take-home pay goes toward paying the monthly rent. To cut costs, Mays said, he cooks a lot of meals at home and curtails his travel.
“I’ve been searching for somewhere cheaper. If you go too cheap, you have to worry about your safety and being in a good neighborhood,” he said.
He is looking for a roommate to share the rental burden. He is confident he will be able to find a good candidate.
“I’ve gotten lots of calls. People are looking for places,” he said. “This place has a pool and a gym.”
High rents in New Jersey effectively put many workers in poverty, said Gordon MacInnes, president of New Jersey Policy Perspective, a public-policy group based in Trenton. These workers earn incomes high enough to be considered moderate, but excessive rent means they have less for other household expenses.
“These are people who are not in poverty, but because they’re living in New Jersey, they are living as if they were,” he said.
Cumberland County has the highest rate of income-to-rental disparity in New Jersey. But the problem extends far beyond the impoverished parts of South Jersey, he said.
“Even in those counties that are considered high wealth, over 25 percent of households are in these dire straits,” he said. “The numbers are pretty revealing — and a bit scary. In this high-income state with high wealth, so many families are spending 30 percent of their household income on rent. You’ll quickly see that a huge percentage are near 50 percent, which leaves nothing for anything else.”
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