Harris County Housing Affordability Gap Widens As Rents Outpace Income Growth

The gap between what is considered an affordable home in Harris County and the median price of a home grew 41% from 2021 to 2022, pushing more people into long-term rentership as those expenses are rising sharply as well, according to a study conducted this summer by the Kinder Institute for Urban Research.

“Even if homeownership is a good investment, it's becoming increasingly untenable locally,” Kinder Institute research scientist Steve Sherman said during a webinar Wednesday to discuss the results and possible solutions.

Last year, an affordable home in the region should have cost $127K, yet the median home price was $317.5K, he said. That has stymied would-be buyers, leading the Kinder Institute's fourth comprehensive State of Housing in Harris County and Houston study to focus on renters.

Fifty-eight percent of Houston residents reside in rentals, while Harris County as a whole counts about 45% renters — a proportion that is climbing, Sherman said at the event. 

“What is also climbing besides the sheer number of rental households is the amount of rent itself, which increased 30% in only six years in the city of Houston and about the same percentage [in] the county overall,” he said, adding the hike significantly outpaced the rise in local wages. 

The median rent in Harris County jumped from $906 in 2015 to $1,164 in 2021, a 28.5% increase, the study showed, while median monthly household income increased 23.4%, from $3,017 to $3,724. Houston's median rent increased from $873 to $1,136 in the same time period, a 30% increase.

Countywide, more than 51% of renters are spending greater than 30% of their income on rent, meaning they are considered cost-burdened, per the study. The percentage of cost-burdened renters increased to 60.2% when accounting for adjustments like household size, income and costs of nonhousing essentials. 

The renter affordability crisis is hitting families with children at a higher rate, Sherman said. Nearly 300,000 renter households with kids are cost-burdened, per study results.

Communities of color are also taking the brunt. About two-thirds of Black renter households and about three-quarters of Latino renter households are cost-burdened, he said.

Panelists from organizations and nonprofits for housing affordability said they have struggled to encourage the development and upkeep of affordable housing.

That has taken on new importance in the face of obstacles like Houston officials last week ending a $60M program to develop affordable single-family housing using Hurricane Harvey disaster recovery funds. 

Libby Viera-Bland, director of neighborhood development for nonprofit developer Project Row Houses, said her organization lost funding that was supposed to be coming from that program. 

“That program has now been defunded and discontinued,” Viera-Bland said. “It's very difficult to make a plan for developing out more affordable housing without knowing where those partnerships can truly be formed for rental units.”

There should be more programs in place for small-scale developers, she said.

“It's simply not possible for us to compete … with the larger-scale developers who really have the funds to draw from,” Viera-Bland said. “Creating policies that would target developers or even small-scale homeowners who want to purchase additional homes that they can rent out, those sorts of solutions really answer a minute need in microneighborhoods that larger-scale developers are also not able to meet.” 

The Houston metro also suffers from a significant number of below-average quality rental structures, the panelists said. Out of 333,367 rental structures, more than 60,000 are considered below average, according to the study.

LISC Houston, a local office of the Local Initiatives Support Corp., is one organization looking at ways to encourage owners to improve the state of their properties, LISC Executive Director Laura Jaramillo said.

“When you think about some of the properties that are not well maintained, who are the owners there?” Jaramillo said. “Is there a way to graciously shame them into doing the right thing for the community?” 

LISC is in discussions to launch a funding initiative that would help established nonprofit organizations acquire properties when owners are unwilling or unable to improve them.

Owners currently face three choices when they are unable to afford property maintenance due to rising costs and taxes, Jaramillo said: raising rents, cutting services or evicting tenants.

“We’re trying to get out how to get the existing properties to lift up into a decent place to live. And if not, to move on and sell them to our other developers who will do that for the community,” Jaramillo said. “We're working on it, and it's not easy work.”