Some push efforts to help renters

Government rental assistance, a boon during the pandemic, has dwindled. Some states are working on their own solutions.



January 2, 2024 - 2:20 PM

When pandemic rental funding and protections ended rents soared across the country and many people became homeless for the first time. New programs proposed by states and Biden administration aim to reverse that trend. Photo by Joe Raedle/Getty Images/Kansas Reflector

Maine’s housing authority received $35 million in 2023 — the first time in 54 years it has received a direct appropriation from the state budget — to help build more affordable rental housing for communities that have struggled to keep up with high housing prices.

The state’s program provides funding to developers for affordable housing projects with between five to 18 units, a size that housing advocates say is sorely needed in many rural communities. That includes construction for new housing, reuse of buildings for housing, and rehabilitation of existing housing.

Mark Wiesendanger, director of development at MaineHousing, said that as the Federal Reserve raised interest rates it was difficult for the independent state agency to support itself at the level the program needed, but that political leaders saw the value of their work and were able to make the historic investment because of a $141 million budget surplus.

Wiesendanger said there’s a lack of housing across the income spectrum in the state, which has some of the oldest housing stock in the nation. He said some of the housing needs to be condemned and replaced, and that much of it is inefficient to heat. To make matters worse, when the pandemic began and many people with the ability to telecommute moved to the state, the population shift drove up housing prices and wages didn’t keep up.

“(The coast of Maine) is a very expensive place to live,” he said. “Folks that work there as fishermen or people who work in the local restaurants, local mechanics and firefighters, have a hard time paying to live in those towns.”

The scenery may be different from state to state but the housing landscape is much the same across the country: People are struggling to find a home they can afford. Legislators, state agencies and the Biden administration this year proposed a raft of legislation and programs to tackle the problem. Advocates say states need to do even more to prioritize housing needs.

The problem renters are facing

From January 2019 to January 2023, the average rent in a U.S. city shot up 19.38% according to St. Louis Fed data. In 22 states and the District of Columbia, people need a wage above $26 an hour to afford a two-bedroom rental home, according to the National Low Income Housing Coalition. According to rental data from CoreLogic, a company that analyzes property, financial, and consumer information, the median renter household pays $500 more than it did in 2020.

The combination of high mortgage rates and low housing inventory contributed to those soaring rental prices which hit just as the federal programs and protections put in place during the COVID-19 pandemic ended.

Andrew Aurand, senior vice president for research at the National Low Income Housing Coalition, said long-standing problems in the housing market were exacerbated by rental inflation in 2021 going into 2022.

“We saw that massive increase in rental inflation that fortunately has flattened now and rent prices have stabilized, but the damage has been done in terms of higher rents for those lowest income renters,” he said.  “… General demand for rental housing has increased quite significantly over the past decade. And so that has squeezed the lowest income renters even more as demand for rental housing has been pretty significant. It’s taken quite a while for supply to catch up.”

As rents went up, the number of people without a home also increased. U.S. homelessness, as measured by a single night in January 2023, rose 12% from last year, according to a U.S. Department of Housing and Urban Development report released on Dec. 15.

But as Aurand noted the situation is starting to show signs of improvement.

There has been an increase in privately-owned housing units under construction this year, from 932,000 in January 2023 to 988,000 in November 2023. In 2022, the Biden administration released a plan to increase the housing supply, which included expanding federal financing of loans for affordable multifamily development homes and removing a cap for larger loans to build and rehabilitate certain homes.

But Mari Castaldi, director of state housing policy at the Center for Budget and Policy Priorities, said that it’s up to states and localities to prioritize housing. States have recognized this, with lawmakers introducing more than 2,500 bills related to housing and homelessness this year in 49 states and D.C., Puerto Rico, the Virgin Islands and Guam, according to the National Conference for State Legislatures.