Americans outraged over rent hikes: "Legal thievery" (2024)

Americans are calling out decisions by landlords to raise rent prices as inflation remains high and the country faces an uncertain economy.

Landlords routinely increase rent prices because of inflation and changing housing and rental markets. However, the last few years have been especially difficult on renters, and the uptick in prices often forces people to moves in search of better prices or get priced out of the market.

Roughly one-quarter of American renters said they can no longer afford to pay their rent, and around one in five said they'll have to move back in with parents or friends, according to a new study from Intuit Credit Karma.

And while rents have fallen on an annual basis over the last eight months, the median rent in the U.S. is just 3.5 percent below its 2022 peak. So that means while rental prices aren't generally climbing nationally, renters haven't seen much relief from the pandemic-era climb in prices, and rents are still 22 percent higher than four years ago, according to Hannah Jones, a senior economic research analyst at Realtor.com.

"A continued increase in rental supply and a more favorable buying environment would each relieve some of the upward pressure on rents," Jones told Newsweek. "As the housing market remained largely unaffordable through 2023, many would-be buyers opted to keep renting, preventing any significant decline in rental prices."

In a report from Harvard University's Joint Center for Housing Studies, half of all U.S. tenants spend more than 30 percent of their income on rent and utilities. And even among middle-income renters, the percentage had risen 5.4 points from 2019 through 2022.

Roughly 60 percent of all Americans rent, meaning the United States is officially a "renter's nation," realtors say.

"It has become harder and harder for first-time buyers and the younger generations to buy and own a home," Brooks Merkle, a realtor at Ansley Real Estate The Stowe Group, told Newsweek.

"I think most people understand that they would rather be paying down their own mortgage and not their landlords, but for some people, finding the funds for a down payment on a house as well as enough cash flow to make their payments and continue their typical life that they love is a struggle that would spread them too thin."

'Legal Thievery'

Rose McCluskey, a Fayetteville, Arkansas, resident, said she became one of many victims to the skyrocketing rental prices because of the lack of rules regarding how landlords can adjust prices in her area.

With so many expensive apartments being specifically designed for college students, it can be challenging to find an affordable place to live. She said in many cases, rent prices grew by 50 or 100 percent in the aftermath of the COVID-19 pandemic.

"Where are families supposed to live, or single parents?" McCluskey told Newsweek. "The enormous rent hike after COVID I think is disgraceful to all the people who paid rent the whole time. Screw the little people, the rich get richer."

While McCluskey said she can understand the difficulties landlords face if renters weren't paying for a period and they still had mortgage payments to make, she believes big-time landlords are simply taking more "because they can."

"So rent is insane...like flushing money down the potty," McCluskey said. "You aren't getting ahead."

McCluskey said the sky-high prices aren't the only challenge renters face in her town. Many landlords don't fix essential utilities, including heat during the winter. And because renters are often unable to afford mortgage payments or get approved to purchase a home, they can easily themselves in seemingly impossible situations.

McCluskey, a single mom who has known her landlords ever since she was a child, said she was "so hurt" when her rent payments increased by $300 after the pandemic. She had lived in the unit for more than 13 years.

"People can't move up and buy a house," McCluskey said. "You can't save because rent is robbing you. The high rent is legal thievery. Landlords could help the poverty level in our town by not ripping off their renters.

"The rich get richer. I believe people are meant to take care of one another," she said, adding that there should be a rental cap across America based on location and size of the unit.

Another renter, Polly DeCesere said her monthly payment was $1,000 in 2021 and increased by $323 due to the "greed" of her landlord.

"We are looking to move and even find that very difficult," DeCesere told Newsweek. "We are on Section 8 and always being harassed by our landlord to move."

While DeCesere's roommate has been on oxygen since they first moved into the rental unit, she says the landlord wants to boot them to make a profit on higher rent.

DeCesere, 71, lives off Social Security and disability benefits, making the rent increase even more difficult to bear. Soon enough, DeCesere anticipates being priced out of the unit.

"I have been looking but my roommate is not educated so I find myself doing all of it, and it's overwhelming and dropping me into deeper depression," DeCesere said. "I'm really nervous of living out of my car with two cats and a person who relies on oxygen whom I care for."

While New York and California boast some of the highest rents nationwide, the problem is emerging even in smaller towns like Fayetteville because of what experts say is a supply and demand problem.

New construction largely hasn't kept up with demand, pushing real estate prices and interest rates to a point where landlords often feel forced to charge more.

And high-cost coastal cities, college towns and tourist destinations often see the hardest hits on renters, especially when inflation is stubbornly still over 3 percent and home interest rates remain high.

"Real estate is changing everything," Alicia Sanchez, the budgets educator and rentals investor at Mamas Dinero, told Newsweek. "High upfront costs, such as security deposits and first month rent, can be barriers for individuals and families with limited savings."

Possible Solutions to Crisis

While there might not be one end-all solution to the renting crisis in America, Sanchez said zoning and land use reform could be a good start to offering more affordable rental housing options.

"Could we please turn in these nationwide shopping malls that went bankrupt into affordable house communities?" Sanchez said.

She added that tenant protections like rent stabilization rules and eviction prevention programs have worked to help residents find and keep affordable housing in the past.

Altogether, though, the crisis will likely require employers to increase wages and offer better economic opportunities for low-income families.

"Simply put, reality is starting to set in," Alex Beene, financial literacy instructor for the state of Tennessee, previously told Newsweek. "Through a combination of slightly higher wages and credit card debt, many Americans have been able to keep their heads financially above water for the past few years, but now salaries are once against stagnant, some businesses are downsizing, and bills are coming due."