Maryland Continues to be Not Affordable for Many

Recent census data indicates that the cost of housing in the Baltimore area and the Maryland is increasing at a slower rate than the US. However, The increase of Maryland's housing costs is over 15% higher than the national average and a larger percentage of renters are cost burdened. The median Maryland renter pays around $1,600 a month in rent and utilities, about $100 more than the average Baltimore-area renter. Renters’ costs have increased 22.5% statewide and 24% in the Baltimore region compared with 32% nationally.

Nationally, the number of cost-burdened renter households hit yet another record high in 2023. In 2023, the number of renter households spending more than 30% of their incomes on rent and utilities was an all-time high of 22.6 million. A record-high 12.1 million severely burdened households spent over half of their incomes on housing costs. About half of all renter households were cost burdened in 2023. This rate was essentially unchanged compared to 2022, but rose 3.2 percentage points from pre-pandemic levels and 9.0 percentage points since 2001.

Nationally and within Maryland, renters are more likely to spend more than 30% of their income on housing. Statewide more than 46% of renters are cost burdened compared with a quarter of homeowners. In the Baltimore area (including Queen Anne’s County, Baltimore City, and the five surrounding counties) the same share of renters are cost burdened while the rate for mortgage holders is over a percentage point lower.

Baltimore City

The City has a mismatch between rental costs and the kind of rental units being constructed. Despite the growing unaffordability of housing in Maryland and especially the Baltimore area, luxury apartment buildings continue to be built. Since 2020, 80% newly constructed apartment buildings in Baltimore were luxury housing, according to real estate data firm the Costar Group. Most housing development worldwide is higher-end because of the higher profit potential for developers. 

Some areas of Baltimore have a particularly high cost burden for renters. Tract 907 in Baltimore’s Coldstream-Homestead-Montebello neighborhood, for example, 70% of households are cost burdened. Rental units are just over half of the housing stock. The Community Development Network of Maryland said incomes were not rising to meet the costs of rent, emphasizing the mismatch between the high number of luxury units versus what Baltimoreans can afford.

Anne Arundel County

In Arundel's tract 7305.11 in the Glen Burnie area, 67% of households are cost burdened. County Executive Steuart Pittman said the disparity was part of a “housing crisis.” “Affordability is more important than just supply,” Pittman said. “The affordability problem doesn’t get any better when all you build is luxury housing.”

Current housing developments across the county are not required to have affordable housing, but new projects will be. Under the Housing Attainability Act, becoming effective in July, new housing developments over 20 units will be required to have 15% of its units for affordable rentals and 10% for affordable homes for sale.

Howard County

Maryland’s most expensive jurisdiction for renters and mortgage holders, Howard - where 28% of housing units are rented - has the largest affordability gap between homeowners and renters. Some 44% of County renters were cost burdened compared to 20% of homeowners. The median rent in the county is $2,040 a month, while median monthly housing costs for homeowners was $2,950.

The County has recently made investments to stabilize the housing situation in the area, such as $2 million invested to subsidize rentals and security deposit guarantees for the families of county students experiencing homelessness. The County’s Moderate Income Housing Unit Program requires a percentage of housing built to be affordable to households of moderate income - with moderate income level defined as “household income less than 80% of the Howard County median income (AMI) for units for sale and household income less than 60% of the Howard County median income for rental units."

Read the December 12, 2024 Baltimore Sun article.

Harvard Rental Study Finds 50% of Renters Have Housing Affordability Problems

A 2024 report from the Joint Center for Housing Studies (JCHS) of Harvard University reveals that although the rental market is cooling, evictions and homelessness are rising. The rental housing affordability crisis has deepened across all income groups and now affects half of all U.S. renters.

It was found that:

(1) Rental costs have stabilized following historic increases in 2021 and 2022. As of 2023's  third quarter, rental growth slowed to rates of less than 1%, down from 15% in early 2022. Although these reduced growth rates have offered relief for some households, asking rents still exceed pre-pandemic levels. The report finds that 50% of all renters are now cost burdened, paying more than 30% of their income on rent and utilities.

(2) The supply of lower-cost units has diminished; over 2.1 million units renting for less than $600 per month have been lost since 2012. From 2012-2022, higher construction costs and increased demand from high-income renters resulted in an increase of 8.4 million units renting for more than $1,400, which is unaffordable for most renters.

(3) As of January 2023, more than 653,000 people were experiencing homelessness, which was the highest number on record. 

(4)  Although multifamily housing construction increased during the pandemic, it began to slow in late 2023. In October 2023, new multifamily housing starts were down by 30% from 2022, and the reduced starts could have lasting effects on the current shortage of multifamily housing. 

(5) Property insurance premiums have skyrocketed by 30 or 40% in some areas, which can limit the number of affordable units a property owner can provide. In some cases, borrowers opt for reduced coverage to bring down their insurance costs, but this strategy can place properties in an insecure position if a natural disaster occurs. In addition, these increased insurance costs also can lead property owners to compensate by cutting back on maintenance and necessary upgrades.

(6) The report indicates that the country's rental housing stock is aging, with a median age of 44 years in 2021 compared to 34 years in 2001. This aging housing stock requires substantial upgrades in habitability, energy efficiency, and accessibility standards, and it also faces a heightened risk of damage from climate change and extreme weather events.

Read the March 19, 2024 PD&R Edge article.