A new report from Enterprise Community Partners and Harvard’s Joint Center for Housing Studies (JCHS) calls for policymakers to prioritize the preservation and development of affordable rental housing, based on projections that the number of cost-burdened renters will grow substantially from 2015 to 2025. We agree. If anything, we think the challenge is even bigger.

As noted in the introduction to the Enterprise-JCHS report, our June 2015 report, Headship and Homeownership: What Does the Future Hold?, projects that rental housing demand will outpace growth in homeowners in the 2010s and 2020s. Millennials, who are currently 20 to 35 years old, will dominate housing markets for the next 10 years. Compared with previous generations, they’re racially more diverse; getting married later and at lower rates overall; starting families later and having fewer kids; carrying higher college debt; and less interested in owning homes. Many African American and Hispanic millennials also will be kept out of homeownership by the evaporation of their parents’ home equity in the 2007-10 crisis. Furthermore, while mortgages are more available now than they were two or three years ago, they remain difficult to obtain.

As a result of all these forces, the number of renter households already grew from 2010 to 2014 by an estimated 4.4 million, according to the Census Bureau’s Current Population Survey; meanwhile, the number of homeowners grew by less than 200,000. The increase in renters came in spite of low household formation, which has been suppressed for millennials by high rents and the weak economy. As the economy recovers and millennials get a little older—the bulk of millennials are just now reaching their mid-20s—household formation will increase substantially and the pressure on rental markets is likely to grow.

Based on recent trends, current demographics, and the policy landscape, we project that renter households will grow by 6.5 million from 2015 to 2025. That estimate is 2.8 million higher than JCHS’s projection of renter growth over the same period.

If our projection is right, then the number of cost-burdened renters would grow by over 2.2 million, assuming annual increases of 2 percent in both rent and income from now to 2025 (the JCHS baseline scenario). But torrid demand for rental housing, left unmet, will make it increasingly likely that rents will grow faster than incomes.

In a more extreme scenario, with rents up 3 percent but income up only 2 percent, cost-burdened renters would grow from 28 percent to 31 percent of the total. This translates into over 4 million new severely rent-burdened households, up more than 34 percent from now to 2025.

With low vacancy rates and high rents, federal support for low-income renters is critical. The need goes beyond subsidized housing, though. As long as land-use regulations, financing, and other constraints slow expansion of the rental housing supply, middle-income renters will crowd out low-income renters. The United States therefore needs not only to redouble support for rental housing subsidies, but also to find new ways to stimulate housing construction for all renters who need it. Otherwise, annual rent increases are likely to exceed 2 percent in many markets, cost burdens will increase even more, and scarce subsidy budgets will be stretched even thinner than they already are.

A note on methods: For the Urban Institute series, we used the Census Current Population Survey to estimate the number of renter households in 2014, extrapolated this estimate to 2015, and then extended the projection to 2020. For 2025, we took the midpoint of our “average” 2020 and 2030 renter household projections from Headship and Homeownership: What Does the Future Hold? Our projections of rent-burdened households in 2025 are based on the Enterprise-JCHS scenarios, which indicate that 28 percent and 31 percent of renter households in 2025 will be cost-burdened in the middle and extreme scenarios, respectively. If the same proportions of our projected 6.6 million new renter households are cost-burdened, then the growth in cost-burdened households would be between 2.2 million and 4.0 million.