Rentals at a premium in Macomb County and metro area – The Macomb Daily

Christi Watkins is grateful for her parents and their basement.

After losing my business in Las Vegas to COVID I had to move back home to Michigan, said Watkins, who is a government employee and a Wayne State University grad student working to complete her masters degree in psychology.

Her rent there was $1,800 but it was a three bedroom home near the strip and it had a pool and spa.

I moved home to find squatters in the house I had rented in Hazel Park, Watkins said.

So, she ventured out into the storm of Michigan residents, individuals and families, searching for homes to buy or houses, apartments, studio flats, and rooms to rent during a shortage of inventory and high costs.

Rents have exploded across the country, causing many to dig deep into their savings, downsize to subpar units or fall behind on payments and risk eviction now that a federal moratorium has ended. Rental costs rose a half percent in January from December, according to the United States Labor Department.

That may seem small, but its the biggest monthly jump in 20 years, and will likely accelerate.

Plus, many of the landlords are not only asking for security fees and first and last months rent but pet fees, and a complete credit check. Watkins earns a fair wage with her government job and also brings in extra money driving for Shipt but due to her student loans does not have the best credit score.

I looked at over 200 apartments, Watkins said, and while she did find a studio flat with a rent she could afford she could not justify the $7,000 in fees they were asking for an apartment that had no bedroom.

I gave up, Watkins said. I moved in with my parents and gave them the money I would have paid for rent, which helped them with their mortgage.

According to data from the U.S. Department of Housing and Urban Development (HUD), a two-bedroom rental unit averages $877 per month in Michigan. Thats a nearly 10% increase from 2018.

In some places the rent has skyrocketed.

Before I moved to Las Vegas I was paying $700 for a two bedroom house in Ferndale, Watkins said. That same house is now renting for $1,900.

At the same time, Michigans affordable housing stock, rental units that rent for less than $800 per month, have been dropping significantly year-over-year, according to the U.S. Census Bureau data. Between 2015-2019, the number of affordable housing units statewide has decreased by 18% from 541,677 units in 2015 to 443,079 in 2019, the most recent data available.

In Macomb County, affordable housing stock dropped by 27% during that time period while that same number dropped in Oakland County by 37% and 12% in Wayne County.

Ashlee Campbell and her four children were homeless for a while because she was unable to find anything she could afford.

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I was working, Campbell said. In fact, shes been working for the past seven years as a medical biller for Binsons Medical Equipment and Supplies in Center Line. But I wasnt able to afford much.

She and her boyfriend were renting a home together but after they broke up she and the children had to move into a one bedroom apartment, which cost her $800 a month.

She once thought about becoming a partner with Habitat for Humanity, but the requirements have changed and she is no longer eligible for the program.

After a long search, Campbell gave up on the idea of renting and instead found a manufactured home, which she was able to finance on her own with the help of Macomb Charitable Foundation (MCF), a nonprofit organization that helps county families with a variety of needs.

Leah McCall, executive director of the Alliance for Housing-Oakland County, said due to limited resources, the amount of subsidized housing is not making up for the shortfall in non-subsidized housing.

Without appropriate government subsidies to make up the difference, there is a shortage of affordable housing and an increase in rent, she said.

All of southeast Michigan has seen significant increases in median rent prices over the past four years, including government-set fair market rent, which are used primarily to help determine assistance amounts for individuals living in Section 8 housing and flat rent for public housing.

Due to the rapid rise in rent, McCall said that the amount of rental housing across metro Detroit that meet fair market price standards is decreasing. Fair market rents vary by metro area and by county.

This means that even when income-eligible households are able to secure rental assistance or housing vouchers, they are unable to use them, she said.

This combination of increased rent and scarce affordable housing options has put Michigans 1.4 million renters, especially the nearly 700,000 renters making less than $35,000 per year, in a bind as the economy continues its recovery from the height of the pandemic and inflation drives up prices for basic daily necessities.

In February, around 218,000 Michigan renters were not confident at all that they would be able to pay their March rent while over 283,000 renters said they were not caught up on their rent, of which around 26,000 said eviction was likely by the end of April, according to the U.S. Census Bureaus Household Pulse Survey. These numbers represent 15% to 20% of Michigans 18 and older renter population.

David Allen, chief market analyst at the Michigan State Housing Development Administration (MSHDA), said there seems to be a number of factors at play pushing median rent prices upward.

One is the fact that the supply of rental units is low relative to the demand for it, he said. This reflects the fact that housing production in the state is way below pre-Great Recession levels.

Allen said another primary factor pushing rent costs higher and higher is the lack of for-sale homes, which is driving some who would otherwise be buyers into renting.

This tends to increase the prices on the rental units being sought in the market, he said.

According to federal data, nearly 30% of rental units in Michigan are priced between $1,000 and $1,500 per month. And 38% of Michigan renters report their rent is at least 35% of their household income.

In Macomb, Oakland, and Wayne counties, between 15% and 38% of all rental units are priced between $1,000 to $1,500 per month with 35% to 47% of renters reporting that their rent costs total at least 35% of their household income.

Households that spend more than 30% of their income on rent are referred to as cost burdened, according to HUD. In 2019, 37.1 million households, or 30.2% of all U.S. households, fit this category.

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Although the situation has worsened since the pandemic, Allen said half of the states renters pre-pandemic were paying more than 30% of their incomes on housing costs.

He added the pandemic has exacerbated these affordability issues for renters.

The effects of this are most felt among lower-income workers and racial/ethnic minorities, he said. These are the very households that were already having a hard time making ends meet.

The financial burden of the increasing cost of rent falls hardest on the half of workers in the U.S. who earn less than $35,000 each year.

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Even if they find housing they can rent, after paying rent along with security deposits and other fees, about 80% of renter households with incomes under $30,000 have between $360 and $490 left to cover all other expenses, including food, health care, transportation and child care.

Weve helped 40 families in the last year with first months rent or security deposits, who exhausted all other resources available to them, said Shelly Penzien, founder and CEO of Macomb Charitable Foundation, which has also helped families such as Campbells with food and other basic needs.

Penzien said shes noticed that since the pandemic landlords are asking for a lot more in terms of security deposits and added fees.

Ernest Cawvey, director of Macomb Community Action, believes the housing market overall has added to the pressures of finding affordable housing but there is help for residents.

Even though the federal moratorium protecting renters against eviction for non-payment of rent expired last August, a Michigan Supreme Court order continues to require district courts to temporarily halt the eviction process for renters applying for financial assistance through the Michigan COVID Emergency Rental Assistance (CERA) Program.

The CERA program has made over $700 million in federal dollars available to renters needing help paying their rent or utility bills. Michigan renters have received, on average, $4,470 in assistance while the average household has received $5,727.

Its important for everyone to know that we are here to help, Cawvey said.

Over $533 million has been spent on rent assistance while another $86 million has been spent to help renters pay their utility bills.

Over 138,000 Michigan renters have received assistance including over 9,000 in Macomb County, totaling $49 million, 12,000 in Oakland County totaling $70 million and a total of $193 million in Wayne County.

There is still over $100 million in assistance available through the Michigan CERA program with many renters having been approved for financial aid multiple times.

Currently, there is no state law that caps or restricts rent charges, but MSHDA does have some ability to impact the percentage of rent increase that can be charged at properties that have a state or federal housing subsidy or housing choice voucher attached to it.

The Housing Choice Voucher Program, which serves 28,000 Michiganders, allows renters to lease a unit of their choice provided that it meets federal quality standards. The owners requested rent is then determined reasonable based on HUD and MSHDA requirements.

If the rent is determined not to be reasonable, based on specified standards, MSHDA must deny the request and the owner must either lower the rent to conform with the requirements or the family must select another unit, said Katie Bach, a spokesperson for MSHDA.

Generally, landlords are being encouraged to charge rent based on the percentage of the homes market value. Typically, the rents that landlords charge fall between 0.8% and 1.1% of the homes value.

Landlords are also recommended to consider what others are charging for similar rentals in their area.

Having found a place to buy Campbell she said she will never go back to renting.

I might upgrade to a bigger place, she said, noting that once she raises her credit score she might even look at upgrading to a bigger place. Right now, Im confident where Im at. The house has new carpeting, a new stove, new paint. Its a home and I live in a cul de sac, so I dont have to worry about the kids playing outside with cars going by. Im very content.

As is Watkins who has one tip for renters and that is to remain diligent and dont be afraid to try sources you might not otherwise consider.

I looked every month to find a place and finally tried something I would normally not do, I looked on Craigslist, Watkins said.

As it turns out, a family thought outside the box as well and posted a listing on the classified advertisement for a mother-in-law suite for rent.

The family built this for their mother and she passed, Watkins said.

It came furnished and look at the view I have, Watkins said, from the kitchen in her one bedroom suite in St. Clair Shores.

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Rentals at a premium in Macomb County and metro area - The Macomb Daily