More Americans Struggling to Pay the Rent
As the portion of Americans renting rather than owning their homes has grown in recent years, so has the number of Americans for whom the monthly rent check has become a burden.
In 2013, almost half of all renters were spending more than 30 percent of their income on housing, with more than a quarter paying half their income to their landlord, according the "State of the Nation’s Housing 2015" report issued today by the Harvard Joint Center for Housing Studies.
Rising rents aren’t just impacting low-income consumers. One in five renters earning $45,000-$75,000 is paying at least a third of their income in rent.
Related: There’s Only One Way Rents Will Go: Sky High
The increase in rental rates represents a byproduct of the falling home ownership rate, which dropped to 63.7 percent in the first quarter of this year, the lowest level since 1989. The rate has fallen for the past eight years and appears poised to continue its decline.
That puts the 2010s on pace to be the strongest decade for rental growth in history, and the national vacancy rate fell to just 7.6 percent, its lowest level in 20 years, according to the Harvard report. The trend reflects increased demand from millennials, as well as a growing preference for renting in households aged 45-64 and higher-income households.
Rents rose 3.2 percent last year, twice the rate of overall inflation, spurring builders to begin construction on more multi-family units than in any years since 1989. “And if job growth continues to pick up, we could see even more demand, as young adults move out of their parents’ homes and into their own apartments,” Joint Center senior research associate Daniel McCue said in a statement.
Map of the Day: Navigating the IRS
The Taxpayer Advocate Service – an independent organization within the IRS whose roughly 1,800 employees both assist taxpayers in resolving problems with the tax collection agency and recommend changes aimed at improving the system – released a “subway map” that shows the “the stages of a taxpayer’s journey.” The colorful diagram includes the steps a typical taxpayer takes to prepare and file their tax forms, as well as the many “stations” a tax return can pass through, including processing, audits, appeals and litigation. Not surprisingly, the map is quite complicated. Click here to review a larger version on the taxpayer advocate’s site.
A Surprise Government Spending Slowdown
Economists expected federal spending to boost growth in 2019, but some of the fiscal stimulus provided by the 2018 budget deal has failed to show up this year, according to Kate Davidson of The Wall Street Journal.
Defense spending has come in as expected, but nondefense spending has lagged, and it’s unlikely to catch up to projections even if it accelerates in the coming months. Lower spending on disaster relief, the government shutdown earlier this year, and federal agencies spending less than they have been given by Congress all appear to be playing a role in the spending slowdown, Davidson said.
Number of the Day: $203,500
The Wall Street Journal’s Catherine Lucey reports that acting White House Chief of Staff Mick Mulvaney is making a bit more than his predecessors: “The latest annual report to Congress on White House personnel shows that President Trump’s third chief of staff is getting an annual salary of $203,500, compared with Reince Priebus and John Kelly, each of whom earned $179,700.” The difference is the result of Mulvaney still technically occupying the role of director of the White House Office of Management and Budget, where his salary level is set by law.
The White House told the Journal that if Mulvaney is made permanent chief of staff his salary would be adjusted to the current salary for an assistant to the president, $183,000.
The Census Affects Nearly $1 Trillion in Spending
The 2020 census faces possible delay as the Supreme Court sorts out the legality of a controversial citizenship question added by the Trump administration. Tracy Gordon of the Tax Policy Center notes that in addition to the basic issue of political representation, the decennial population count affects roughly $900 billion in federal spending, ranging from Medicaid assistance funds to Section 8 housing vouchers. Here’s a look at the top 10 programs affected by the census:
Chart of the Day: Offshore Profits Continue to Rise
Brad Setser, a former U.S. Treasury economist now with the Council on Foreign Relations, added another detail to his assessment of the foreign provisions of the Tax Cuts and Jobs Act: “A bit more evidence that Trump's tax reform didn't change incentives to offshore profits: the enormous profits that U.S. firms report in low tax jurisdictions continues to rise,” Setser wrote. “In fact, there was a bit of a jump up over the course of 2018.”
