If a more renter-centric economy is the solution to America's housing woes, policymakers and developers will have to tackle two issues first — falling incomes and rising rents, housing experts say.

So far, the meteoric rise in multifamily permitting and construction is mostly geared toward the middle and higher-end markets, not affordable housing units in lower-income neighborhoods, where more supply is needed.

Research from Fannie Mae's economic and strategic research group found  the percentage of renters paying at least 30% of their income for housing grew from 49.8% in 2006 to 53% in 2010.

Meanwhile, renters with severe affordability problems — or those spending at least half their income on rentals — grew from 25.1% to 27.4% during the same period, according to Fannie's data.

Fannie Chief Economist Doug Duncan essentially says the dynamics of today's market is creating more renters who are "experiencing housing cost burdens." Based on Fannie's data, 35 states saw increases in the growth rate of rental cost burdens between 2006 and 2010.

This assessment strikes a chord with Ryan McMaken, an economist with the Colorado Division of Housing.

"It is definitely a trend here," McMaken said. "I was looking at some of the numbers this morning, comparing early 2008 to now, and the average rent in the Denver metro area in that time has gone up about $100."

McMaken said rents in the metro Denver area rose 4.5% from the first quarter of last year to Q1 of 2012.

He added that Colorado rental prices are increasing across all property types as renters leave Class A multifamily complexes for cheaper units. In the process of this transition, cheaper rentals see their values rise, which essentially leads to price increases across the board.

In Chicago, low-income renters feel the pinch of today's market cycle, said Geoff Smith, executive director for the Institute for Housing Studies at DePaul University. He sees dwindling income levels as the primary cause of the heavier rental cost burdens.

"In Cook County (where Chicago is located) over 75% of the renter households making less than $30,000 were cost burdened in 2009," Smith said. "I don't have the 2010 number immediately handy, but I doubt the percentage went down."

The recession "was particularly hard on lower-income and younger households, those that are traditionally renters," he said. "At the same time, most of the rental housing production has been oriented to higher-income developments and communities. The rental housing stock in many lower-income communities has been destabilized by the foreclosure crisis."

Both McMaken and Smith see the expansion of rental housing stock as the solution. "There is not enough multifamily housing construction on the horizon," said McMaken of Colorado. "Statewide 20,000 new households formed recently and only 4,000 new housing permits were pulled."

Chicago's Smith says creating more housing for rental families is difficult to pull off, but views the potential conversion of REOs to rentals as promising if handled appropriately.

"I think converting REOs to rentals has promise in terms of creating affordable rental," he said in an email exchange with HousingWire. "Probably more so than new multifamily development. In Chicago, for example, much of the affordable market-rate rental stock (in other words, rental units that offer affordable rents, but are unsubsidized) are in two to four-unit buildings. Units in these types of buildings make up nearly 40% of the rental housing stock in Chicago and this percentage is higher in lower income areas. The two- to four-unit building stock in Chicago's low-income communities has been devastated by foreclosures."

While these buildings are ideal for rehabbing and renting, investors struggle to get financing on these smaller multifamily properties. Smith hopes if the REO-to-rental concept moves forward that financing options for smaller investors will emerge.

"Owner-occupants who might buy a two- to four-unit building, live in one unit, and rent the others also have a difficult time getting a loan," Smith said. "Underwriting ... is tricky. More access to credit for these types of properties might help create more affordable rental."

The Commerce Department reported that new privately owned multifamily structures (five or more units) authorized in the permit process shot up 40% in April from year-ago figures, but two- to four-unit structure permitting was up only 4.5%.

Multifamily housing starts grew 3.2% in April from the previous month, according to the data.

The National Association of Home Builders recently predicted that multifamily starts would continue on an upward trajectory. They rose 55% in 2011 compared to 2010. NAHB called for a 22% increase in multifamily starts this year to 216,000 by year-end.