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Gas Prices Down, Rent Still Going Up

State and federal officials were quick to respond to rising gas prices earlier in the year. But some of households’ biggest costs, like housing, are still rising.

A person holding a gas pump nozzle.
Gas prices have fallen from recent record highs nationwide because oil prices and gasoline demand have declined and gasoline supplies have increased, according to analysts.
(Al Seib/Los Angeles Times/TNS)
The average price of gasoline in the United States peaked in mid-June at just over $5.00 a gallon. But well before it reached that dizzying height, lawmakers in both major parties and in every part of the country had snapped to attention, offering policies meant to offset the increasing cost of driving.

By the end of April, as Governing reported, many states had proposed pausing their gas taxes or offering tax rebates to their residents. Some sought to tie those rebates directly to car ownership. California Gov. Gavin Newsom initially proposed giving drivers a $400 rebate per car they owned, a suggestion that later evolved into an across-the-board rebate for taxpayers who met certain income limits.

Josh Shapiro, the Democratic candidate for governor of Pennsylvania, proposed sending residents $250 per car, up to four cars per household. President Joe Biden moved to open the country’s strategic oil reserves in late March in an effort to keep gas prices under control, and publicly urged gas station owners to lower their prices.

The price of gas has now decreased for two straight months, and last week it dipped below $4.00 a gallon for the first time since the beginning of March. What hasn’t dropped is the cost of housing, which already makes up a much bigger portion of a typical family’s budget than gas costs and is often the highest single cost a household carries each month.

The average rent is 12 percent higher now than it was this time last year, according to Apartment List, and rent prices in New York hit record highs this summer. Meanwhile, housing advocates are still struggling to get Congress and the Biden administration to commit to large-scale investments in housing production or voucher subsidies, or to pass new protections for tenants.

Why do rising gas prices motivate political leaders to act so urgently, while the crisis of unaffordable housing slowly grows out of control in the background?

One reason politicians respond to fluctuations in gas prices is because of how visible they are and how quickly people notice when the price goes up, says Jorge González-Hermoso, a research associate in the Metropolitan Housing and Communities Policy Center at the Urban Institute.

“You go to the gas pump and you see the number. You’re very familiar with how much filling up the tank costs, so for a consumer it’s something that really impacts the psyche,” González says.

On the other hand, he says, many people don’t experience the rising costs of housing on a weekly or even monthly basis. Homeowners may make roughly the same mortgage payment for years, and even the most vulnerable tenants don’t see rent increases every month. It’s also simpler for a state to temporarily remove a tax on gas — even if it will have a small impact on a typical resident’s budget — than to address the thicket of local regulations and labor and supply-chain costs that slowly push the price of housing upward.

“What is driving housing costs so high is a lot of very different, very macro-level trends, especially the shortage of housing supply,” González says. “And this is not something that you as a government can really address in a single year.”

Gas prices drive the conversation about costs because “the numbers are lit up in the sky and we have to stare at them every day,” says Tara Raghuveer, director of the Homes Guarantee campaign at People’s Action, a national progressive group. But there’s also a different set of expectations about housing.

“When gas prices are high, people recognize that as abnormal and bad,” Raghuveer says. But they “take for granted that the rent is not going to be affordable and that it’s always going to go up.”

It’s also the case that people across the socioeconomic spectrum feel the rising costs of gas, while rising rents fall particularly hard on poor people and people of color, who aren’t well represented in the halls of power, she says. Last week, People’s Action helped coordinate a delegation of tenants that traveled to Washington, D.C., to meet with the Federal Housing Finance Agency. The campaign is calling on Biden to declare a national housing emergency, and on the FHFA to impose rent regulations in properties with federally backed mortgages.

One of the tenants who went to Washington with the Home Guarantee campaign was Vanessa Armour, a 68-year-old retired U.S. Postal Service worker who lives in Las Vegas. Armour says the apartment building she lives in has a federally backed mortgage, and that the landlord has repeatedly squeezed the tenants with rent increases and unpredictable fees. She leased the apartment two years ago for $1,100 a month, but after increases and fees — including fluctuating sewer and trash fees, a pest-control fee, and mandatory liability insurance — she now pays over $1,500 a month. And she knows other tenants who have it worse.

Armour says she’s been hit by other inflationary price increases too, from food to gas. But the rent is by far the biggest cost, and she often finds herself with no more than $200 to spend in a month after her other bills are paid. She was told she makes too much between her pension and a part-time job as a cook to qualify for affordable senior housing. But she doesn’t make enough to afford a decent place on the private market.

“They have to do something about these landlords that have went buck-wild and are just gouging us,” she says.

Raghuveer notes that while the rate of inflation growth has recently slowed, it’s not going to get substantially lower while rents continue to increase. As gas prices soared, Biden and other political leaders made the case that gas companies were profiteering on the inflation trend, charging more than they had to because they knew they could. They haven’t used the bully pulpit in the same way against landlords, the biggest of which are raking in larger profit margins than before. In order to prevent many more renters from sliding into homelessness, Raghuveer says, officials may have to try something new.

“My question is how motivated they are to do something that will inevitably feel risky, will inevitably break ground, and may inevitably be legally contested, but that would provide material relief for people today,” she says.


Jared Brey is a senior staff writer for Governing. He can be found on Twitter at @jaredbrey.
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