Researchers at the Rutgers Center on Law, Inequality and Metropolitan Equity (CLiME) have released a comprehensive study answering the question on every New Jerseyan’s mind: “Why is the rent so damned high?” The report, authored by Associate Director Katharine Nelson, highlights a staggering 30 percent increase in housing costs between 2021 and 2023. While many pundits point to a simple lack of supply, the Rutgers team argues that the crisis is far more complex, driven by four converging forces:
• Stagnant Wages: Real earnings for low-wage workers have actually declined by 5% over the last four decades.
• Income Inequality: The gap between the wealthy and the working class continues to widen.
• Corporate Consolidation: Large-scale investors and professional landlords now own over half of all rental units nationwide.
• Affordability Gaps: A critical shortage of units priced for “very low-income” households (those earning 30% or less of the Area Median Income).
The “Supply” Myth and the Need for Multi-Front Action
“Yes, [undersupply] is a problem. But there is no single individual solution to the rental affordability crisis,” says Nelson. The report suggests that while building more homes is necessary, the type of housing matters most. The current market is failing to produce starter homes and low-rent units, focusing instead on high-end developments that are out of reach for the average Newark resident.
The Newark Disparity
In Newark, the crisis is particularly acute. Because federal “affordability” standards are based on regional median incomes, units labeled as “affordable” often require incomes far higher than what local residents actually earn. The report also found that corporate landlords in Newark—who outbid local families for small residential properties—tend to set rents roughly $200 higher per month than individual “mom-and-pop” landlords.
Key Findings at a Glance:
• Rent vs. Income: Over the last 40 years, rents have risen three times faster than incomes.
• Starter Home Collapse: In the 1970s, 400,000+ starter homes were built annually; today, that number has plummeted to fewer than 100,000.
• The “Cost Burden”: Nearly 22 million U.S. households pay more than 30% of their income on rent.
• Supply Gap: Nationwide, there are only 35 available homes for every 100 extremely low-income households.
