CLEVELAND — Federal data released Wednesday shows inflation reaching a new 40-year high. The 9.1%, 12-month rate is the highest since December 1981.
President Joe Biden has called the figures, which reflect the state of the economy in June, “out of date.” He said that while the reading is “unacceptably high,” energy prices have dropped and given Americans breathing room.
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Northeast Ohioans tell News 5 they’re feeling the crunch of other rising expenses, including the burden of increasing rental prices.
“The fruits, the Pampers, the Similac, you name it—gas, everything’s gone up. And it’s definitely been hard for us,” said Aixa Carrillo.
The Cleveland mother of two was picking up food at a drive-thru distribution at the May Dugan Center Wednesday. The roughly $200 in groceries she receives helps offset other costs. Carrillo said her rent has not gone up, but she worries it’s an inevitability.
“We’re definitely stressed out at this point in time, but definitely it would stress us out even more, for sure,” she said, noting a neighbor has had her rent raised three times in the past year.
According to the U.S. Bureau of Labor Statistics (BLS), rent has risen 5.2% over the past year. The rent index jumped by 0.8% from May to June, which is the largest single month rate increase since 1986.
“I’ve seen where basically everyone in the complex is being pushed out and the rents are being doubled, sometimes tripled,” said Josiah Quarles, a housing justice community organizer at the Northeast Ohio Coalition for the Homeless (NEOCH).
He explained low-income families and individuals had been feeling the effects or rising rent prior to historic inflation rates. Now he worries inflation will compound their challenge of making ends meet.
“It’s just an extra stressor. So families and individuals are really feeling that crunch,” Quarles said. “When you’re looking at the lower end of rentals, it’s really impactful. Those $200-300 changes in rent can make it totally unaffordable.”
Data recently released by rental tracking website Dwellsy shows the median national rent is now higher than $2,000 for the first time ever. By contrast, the greater-Cleveland area’s median asking rent is now at $1,050.
“Hopefully other people from other parts of the country look at Northeast Ohio as a great place to move, as an affordable place to move,” said Bhavin Patel, principal at Harvest Green Capital, LLC and the treasurer of the Northern Ohio Apartment Association.
The Dwellsy report found Cleveland’s rent went up by 3.4%, or $35, from one year ago. Patel said based on Ohio’s median income of $60,000, anything below a $1,500 monthly rent payment is considered affordable.
He explained property managers are also feeling the pinch of inflation, with skyrocketing labor, energy and material prices. But he said many landlords are footing much of the extra expense.
“As we see our costs increase by eight to nine percent, our rents are between four and five percent,” he said.
Patel said property managers are optimistic the market will stabilize in the near future, despite Wednesday’s grim inflation report.
The U.S. Federal Reserve is expected to issue yet another interest rate hike to rein in soaring inflation.
“It’s already hard enough to pay rent and now you’re paying higher gas prices, now you’re paying higher food prices. It’s just an extra stressor,” said Quarles.
Carrillo worries rising prices will soon outpace her income.
“It’s not enough money,” she said. “No matter how much we bust our butts, it’s not enough.”
The Central Bank will issue its next rate decision on July 27.
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