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In a ""blog"":http://www.freddiemac.com/news/blog/ post, a ""Freddie Mac"":http://www.freddiemac.com executive revealed more than one-third of U.S. households are renters, the largest share since 1997, yet adequate, affordable rental housing is still out of reach for many.
[IMAGE]According to David Brickman, SVP of multifamily at Freddie Mac, the nation has seen 5.4 million new renter households between 2004 and 2011, and growth is expected to continue. Brickman named several factors driving the increase, including demographic trends such as baby boomers who no longer want to own, younger people waiting longer to buy, former homeowners who weren’t able to stay in their homes, along with other reasons such as higher credit standards to buy and changing attitudes toward homeownership.
John Tashjian, principal at ""Centurion Real Estate Partners"":http://www.centurionrealestate.com/site/ in New York City, explained the housing decline has ""left a deep and lasting impression on the psyche of Americans as potential homeowners.""
""This drop in consumer confidence has caused a rush toward rental housing which, in turn, has caused rents to rise nationwide and a decline in affordable rental housing stock,"" he said.
[COLUMN_BREAK]Citing data from a 2000-2011 survey from the U.S. Census Bureau, Brickman noted more than half of all renters in the country exhaust more than 30 percent of their income on housing, and 30 percent of renters spend at least 50 percent of their income on housing. Generally, if housing costs do not exceed 30 percent of income, housing is considered affordable. For renters, the cost would include rent plus tenant-paid utilities.
Brickman also highlighted efforts from Freddie Mac to support affordable housing, stating, ""adequate rental housing is in our DNA,"" whether economic times are good or bad.
""In contrast, private funding sources (such as life insurance companies, banks, and conduits) tend to focus mainly on high-end properties and top-tier markets along the U.S. coasts. And in times of economic stress, private sources tend to leave the market altogether,"" he added.
From 2005 through 2012, the GSE has financed nearly 2.6 million rental units. During those years, Brickman stated on average, more than 90 percent of the units were affordable to middle-income households and nearly 80 percent were affordable to lower-income households.
Brickman also added many of the properties financed would likely have trouble securing funding elsewhere, with a large majority more than 10 years old and in need of capital improvements.
David Lichtenstein, chairman and CEO of ""The Lightstone Group"":http://www.lightstonegroup.com/, also underscored the importance of offering affordable housing.
""Affordable housing has proven to be the bastion of the housing industry. With the record number of foreclosures and the coloratura decline in home ownership, Freddie Mac has emerged as the hero of America's working middle class,"" Lichtenstein said.
