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Photographer: Victor J. Blue/Bloomberg Photographer: Victor J. Blue/Bloomberg

In big, expensive cities such as New York and Los Angeles, rising rental costs are straining middle-class budgets. Historically, though, rents have hit low-income tenants the hardest. New research from the Federal Reserve Bank of New York shows just how hard.

From 1993 to 2013, the cost of the cheapest 20 percent of U.S. rental units has increased more than 10 percent a year, according to the New York Fed analysis of data from the Census Bureau's American Housing Survey. Meanwhile, the rents of apartments and houses in the priciest 20 percent were flat over time.

Richard Peach, who wrote the blog post with Jonathan McCarthy, said in an interview that the rent inflation findings were an unexpected result of their research on how the Bureau of Labor Statistics factors in housing costs for renters and homeowners when it calculates inflation. So the researchers spend more time identifying the trend than examining its root cause or possible policy solutions.

QuickTake Gentrification

One idea they do float: Housing costs rise more slowly at the top of the market because most new construction tends to target affluent renters, mitigating rent inflation on existing high-end apartments.

The chart below shows that for households in the top quintile of income, most additions to the new rental and owner-occupied housing stock created between 1989 and 2013 came from new construction. Those households occupied 10.8 million new units, while 4.7 million units were "converted" (essentially, displaced by the new construction) to serve households earning incomes in the next quintile down. At the low end of this income distribution, there was less new construction and more apartments trickling down from the higher tiers.

A popular theory of real estate development in hot housing markets is that you meet demand for new units by building at the high end. Affluent renters move up into nicer, newer apartments, vacating units that are in turn filled by renters on the next rung of affluence.

But "as one moves down the rent level distribution," Peach and McCarthy write, "increases in the supply of housing increasingly come from previously higher-rent units, which may still have rents above the average of the incumbent units, pushing up rents more in such segments."

In other words, based on the data they examined, building luxury rental apartments is a good business model for developers, but it doesn't really help with housing affordability down the line.