WASHINGTON — After 18 months of rigorous data collection funded entirely by a coalition of property owners, researchers at the Institute for Housing Outcomes Research announced Thursday that American renters should be paying more rent, a finding the authors called “genuinely surprising” and the funders called “on schedule.”
The 214-page report, Rent Is Too Low: A Longitudinal Assessment of Untapped Tenant Capacity, was underwritten by Landlords For Rigorous Science, a nonprofit whose 1,140 members own a combined 2.3 million units and, according to its bylaws, “no opinion on the outcome.”
“We followed the data wherever it led,” said lead author Dr. Preston Holloway-Kemp, who holds the institute’s Fennimore Property Group Chair in Rental Economics. “And it led, with remarkable consistency, to an 11 percent increase at renewal.”
Central to the study is a new metric the authors call “unrealized rent”: money tenants currently spend on groceries, prescriptions, car repairs and their children. Researchers estimate that renters nationwide are sitting on $412 billion in unrealized rent, which Holloway-Kemp described as “a staggering amount of housing revenue being diverted into food.”
The study is careful to ground itself in independent research. It cites Harvard’s Joint Center for Housing Studies, whose 2025 report found that a record 22.6 million renter households, half of all renters, spend more than 30 percent of their income on housing, and that 12.1 million spend more than half. Where Harvard saw a crisis, IHOR saw proof of concept.
“Half of America’s renters have already demonstrated that they can pay more than 30 percent,” Holloway-Kemp said. “Millions have proven they can pay more than 50. At that point the 30 percent guideline isn’t a ceiling. It’s a participation trophy.”
The report singles out what it calls the “residual leasing opportunity”: the roughly $250 a month that, according to the Harvard researchers, America’s lowest-income renters have left over after housing costs. “That’s $3,000 a year just sitting there,” said co-author Dr. Lynne Abernathy-Shaw. “No one can tell us what it’s for. When we asked, they said ‘everything else,’ which is not a line item.”
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The methodology section has drawn the most attention. Researchers surveyed 1,140 landlords about what their tenants could afford. Tenants themselves were not surveyed “to avoid response bias,” according to a footnote, “as tenants have a documented financial interest in the outcome.” The study’s confidence interval was measured by asking landlords how confident they felt.
- Rent is too low.
- Renters spend an estimated $412 billion a year on things that are not rent.
- The 30 percent affordability guideline is “outdated, arbitrary and, in many markets, exceeded, which proves it can be.”
- Tenants who can still afford to complain about rent can, by definition, still afford rent.
- More research is needed, and has been funded.
The report was peer-reviewed by a panel of three property managers, a leasing agent and an anonymized rent-pricing algorithm. The algorithm abstained. Under the Justice Department’s November 2025 settlement with RealPage, the software may train only on nonpublic data at least a year old, and the company paid no damages and admitted no wrongdoing. IHOR said the algorithm’s silence “should not be read as disagreement,” adding that it had “agreed with the findings a year ago.”
For context on housing costs, the study leans heavily on a 2022 analysis by the National Multifamily Housing Council and the National Association of Home Builders estimating that regulation accounts for 40.6 percent of apartment development costs, a figure drawn from a survey of 49 developers. The authors praise its rigor. “Forty-nine developers,” Abernathy-Shaw said. “That’s nearly 50 people who build apartments agreeing on why apartments are expensive. You can’t buy that kind of consensus. We checked.”
Critics have raised concerns about the study’s independence, noting that every author, reviewer and funder owns, manages or leases rental property. Holloway-Kemp said he was “genuinely baffled” by the objections.
“We asked everyone who matters,” he said. “If you wanted to know whether fish need water, you’d ask the people who own the water. That’s just expertise.”
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The institute pointed to public opinion as further validation, noting that California voters in 2024 rejected Proposition 33, which would have let cities expand rent control. Opponents, led by the California Apartment Association, spent roughly $125 million against the measure, more than double what supporters spent. “That’s the free market of ideas,” Holloway-Kemp said. “One side had more ideas. They were worth $125 million.”
Renters reached for comment were not, the institute stressed, part of the sample. “I read the whole thing,” said Marisol Teague, 31, a tenant whose building is owned by one of the study’s funders. “The appendix says my $250 is ‘underperforming.’ It’s my bus pass.” Teague later received a renewal notice citing the report by page number.
The report closes with a set of recommendations for policymakers, including annual increases of 8 to 14 percent, the reclassification of rent as “a contribution to housing,” and a long-term “stretch goal” of a 100 percent rent-to-income ratio, which the authors note “would greatly simplify budgeting.”
IHOR’s offices are in a downtown tower it shares with a workplace research group that recently concluded people should go to offices more. Both pay rent to the same landlord, which declined to comment on either study, saying it had not finished reading the second one.
At press time, the institute had announced its next project, again funded by Landlords For Rigorous Science, examining whether security deposits should be refundable. Preliminary findings were described as “unclear.”
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