Rental costs rising beyond reach in Nashville
By Warren Duzak
11 January 2018
Rent increases that have made life almost impossible for working class families nationwide are a serious problem in Nashville, Tennessee. The rise in rental costs, which out-distance incremental increases in wages, can be traced to the financial feeding frenzy of investors, hedge fund operators and real estate speculators following the 2008 crash.
“Locals complain that the rents are taking a bigger bite out of their paychecks,” the Wall Street Journal reported, as far back as 2014, on rent increases in Nashville.
The real human costs—homelessness, lack of money for food, clothes and heat—were trivialized under the headline, “Nashville rent increases have residents singing the blues.”
“While apartment rents are up 18% since 2009,” the newspaper reported, “median household income in the Nashville metro area has grown by 5%, to $53,671, according to Moody’s Analytics. More than half of renter households in the Nashville metro area are considered cost-burdened, meaning they pay more than 30% of their income to rent.”
In its January 8 story, “Rising rents put low income US renters in severe jeopardy,” the WSWS outlined the plight of renters nationwide. “A December report on the housing crisis that appeared in a publication of the Board of Governors of the US Federal Reserve, called FEDS Notes, reports on the distress for families in the lowest US income quintile brought on by a squeeze in monthly income from rising rents and stagnant or falling wages.
“In general, these families earn under $25,000 annually. The lowest-paid fifth of US households includes workers making more than minimum wage (and) rent increases have rapidly and relentlessly outstripped stagnant or declining annual wages for workers at the lowest income levels.”
Written by researchers from the US Federal Reserve and the Brookings Institution, the December report notes that the portion of monthly income that low-income households must spend on rent has been rising through the last several business cycles. “Rent burdens have increased over the past 15 years, due to both increasing rents and decreasing incomes,” the WSWS reported.
In Nashville, the rent increases have been most dramatic. For instance, according to online RentJungle.com, rents in Nashville (with minor fluctuations each month) rose from about $648 a month for a one-bedroom apartment and $872 for a two-bedroom apartment in 2011 to $1,214 for one bedroom and $1,460 for two in December 2017.
Compounding the problem is Tennessee’s regressive tax system .
The Chattanooga Times Free Press reported in 2015 that it was the poor and working class who were paying for the “business friendly” atmosphere state and Nashville officials love to tout.
A study by the Federal Reserve Bank found that Tennessee had the most regressive tax system in the nation, forcing “poor and middle-class taxpayers, in most instances, to pay a bigger share of their income than do wealthy individuals,” the Chattanooga newspaper reported. “Tennessee boasts some of the lowest overall tax rates of any state, but its heavy reliance upon the sales tax for the biggest share of the state revenues means that a disproportionate share of the taxes paid comes from low and middle-income taxpayers.”
more...