| NEARLY A THIRD OF A NATION: TWENTY-EIGHT
YEARS OF RENTAL HOUSING DATA
Nearly one-third of American households are renters. These families and individuals have been the focus of the American Housing Survey (AHS)1 since 1973. In this article we look at a few indicators of rental housing culled from AHS publications and note how the data have changed in the 28-year period between 1973 and 2001. The number of rental housing units has increased slowly over the past three decades with even less growth and increasing vacancy rates in the past decade. Most rental units were in buildings with 2 to 49 units, and approximately one-third of rental units were single-family structures. The typical age of rental units during this period was approximately 29 years, although the median age has increased to approximately 34 years. Between 1973 and 2001 the location of rental units shifted from the Northeast and Midwest to the South and West and from areas outside metropolitan areas to the suburbs of metropolitan areas. Gross rents increased throughout the period, with the highest growth rates occurring in the earlier years. The percentage of households spending 35 percent or more of their income for rents have risen from one-fifth to over one-third of renter households. Rental units increased slightly in size during the period, which, combined with constant family size, has led to less overcrowding. Rental Units—Number, Type, Age, and Vacancy Status Figure 1 shows the estimated number of renter-occupied housing units from 1973 to 2001. During this period the number of occupied rental units increased 40 percent, from approximately 24 million to 34 million. Most of this growth occurred in the 1970s and 1980s. For the past decade the number of rental units has been fairly stable at approximately 33 million; this slow growth has contributed to the slow change in the physical characteristics of the rental stock. Vacancy rate is an indicator of the health of the rental housing market. Figure 2 shows that during the 28-year history of the AHS the vacancy rate has varied from a low of 5.1 percent in 1980 to a high of 8 percent in 1987, with an average rate of 6 to 7 percent. The lowest vacancy rates occurred in the later 1970s and early 1980s; since 1985 the rate has been above 7 percent. Even though the percentage dropped slightly in recent years, more than half of all renters lived in multifamily buildings with 2 to 49 units. As shown in table 1, the percentage of renters living in 2- to 49-unit buildings ranged from a high of 57.6 percent in 1979 to a low of 54.1 percent in 2001. The second most common rental structure type, the single-family unit, accounted for approximately one-third of all rental units, ranging from 30.9 percent in 1978 and 1979 to 34.1 percent in 1973. Within this category, the number of single-family attached units increased in recent years from 4 to 5 percent of all rental units in the 1970s and early 1980s to 10.5 percent in 2001. Large multifamily structures account for approximately 9 percent of all rental units; this share has remained fairly constant during the 28-year period. Finally, manufactured (mobile) homes accounted for approximately 3 percent of all rental units during the period, from less than 2 percent in 1973 to 3.9 percent in 1995.
The median age2 of rental units between 1973 and 1984 hovered around 29 years, as shown in figure 3. Multifamily building construction was quite high from 1984 to 1986 as investors tried to capitalize on changes in the tax treatment of real estate property income; as a result, the median age dropped to a low of 23 years in 1985. Since 1985 the median age increased by 11 years to 34 years, reflecting in part the slowing of multifamily construction (5+ units per building) since the latter half of the 1980s.
The location of rental housing units has changed considerably over the 28-year period. More units are now located in the South and West than in the Northeast and Midwest. There was also a shift from outside metropolitan areas to the suburbs of metropolitan areas. Table 2 shows the distribution of rental housing units in both regional and metropolitan areas in 1973 and 2001. In 1973 the Northeast and Midwest each possessed approximately one-fourth of all housing units, the South had approximately one-third, and the West had approximately one-fifth. By 2001 the proportion of all rental housing units in the Northeast and Midwest dropped to one-fifth, the South remained at one-third, and the West rose to one-fourth. Approximately 25 percent of rental housing units were located outside of metropolitan areas in 1973; by 2001 this percentage had fallen to approximately 15 percent. During this period the percentage of rental housing units in the suburbs of metropolitan areas grew from 29.9 percent of the total in 1973 to 41.6 percent in 2001. Rents and Housing Cost Burdens During the 28-year period that the AHS was conducted, gross rents increased from $133 per month in 1973 to $633 per month in 2001, as shown in table 3. On an annualized basis, rents increased from a low of 1.9 percent in 1987 to a high of 12.0 percent in 1981. In comparison, the overall consumer price index (CPI) ranged from 1.9 percent in 1999 to 13.5 percent in 1980. The highest increase in gross rents, ranging from 8 to 12 percent, occurred in the early half of the period; however, the second half of the period experienced lower rent growth rates of only 2–5 percent. The CPI followed the gross rent rate pattern with increases from 6 to 13 percent during the early part of the period and 2 to 5 percent in the later years; however, gross rents grew at a slightly greater rate than the CPI—5.7 percent versus 5.1 percent annually. Compounding this difference over 28 years leads to an 18 percent difference; that is, gross rents are 18 percent higher than they would be if they increased at the same rate as the CPI. The number and percentage of renter households carrying a heavy rent burden (defined as spending more than 35 percent of household income on housing) are shown in figure 4. In 2001 nearly 12 million households (34.8 percent) fell into this category. During the 28-year period this percentage was as low as 22.5 percent (in 1973) and as high as 35.6 percent (in 1995). Most of the increase occurred before 1981; from 1972 to 1981, the percentage of renter households carrying a heavy rent burden increased from 22.5 percent to more than 32 percent. After 1981 the incidence of heavy rent burden stayed above 30 percent and was nearly 35 percent during the past decade. These rates may be attributed to income growth being slightly lower than the growth in gross rents: Between 1973 and 2001 median family income rose at an annual rate of 5.3 percent, while gross rents grew at a rate of 5.7 percent. Size and Crowding The typical rental unit has increased in size slightly over the past 28 years, while the size of the typical renter household has remained nearly constant. As a result crowding has eased over the years.
The distribution of rental units by number of rooms is presented in table 4. The percentage of units with seven or more rooms increased from 5.0 percent to a high of 7.5 percent over the 28-year period, with much of the increase occurring between 1985 and 1995 followed by a falloff in 1997. (It should be noted that the AHS introduced a new set of questions for number of rooms.) The percentage of units with three or fewer rooms decreased from 34 to 26 percent during the period, with much of the decline occurring during and after 1985. The percentage of units with four to six rooms increased from 60.5 to 67.7 percent, with much of the increase also occurring during and after 1985. A modest increase can also be seen in the median number of rooms, which increased only from 3.5 to 3.7 during the period; much of that increase occurred after 1985. There was a drop in the median number of rooms after 1995, which might be linked to the change in AHS questions on number of rooms. The number of bedrooms in the typical rental unit was fairly constant during the 1973–2001 period, with the median moving slowly from 2.3 to 2.4 rooms as shown in table 5. The proportion of occupied rental units with three or more bedrooms increased from 21.7 percent to nearly 25 percent. The median number of persons per renter household was virtually unchanged during the 28-year period. As a result of constant family size and slightly increasing unit size, crowding has lessened over the period, as shown in figure 5. In 1973, 2.1 percent of renter households had more than 1.5 persons per room; this percentage decreased over the period to approximately 1 percent in 2001. Much of the decline occurred before 1985, with the percentage staying below 2 percent afterward.
Summary The information presented in this article is simply a sample of the large amount of information collected about rental housing in the 28-year history of the AHS. The housing stock grows very slowly over time, averaging approximately 1.2-percent growth per year. This slow rate of change explains the stability of rental stock in terms of the number of rooms, age of units, number of bedrooms, and type of structure. Other rental market conditions that reflect interaction with demand are not as stable. As a result, we can see changes in the vacancy rate, gross rent, rental burden, and crowding over time. Notes 1. The survey was called the Annual Housing Survey from 1973 to 1983 and the American Housing Survey from 1985 to 2001. Copies of reports from 1973 to 2001 can be found on the Internet at http://www.census.gov/prod/www/abs/h150.html. Information on the AHS can be found at the HUD USER Web site (http://www.huduser.gov/datasets/ahs.html) or at the Census Bureau Web site (http://www.census.gov/hhes/www/ahs.html). The latter two sites also provide information on ordering printed copies of the reports. 2. The median age is calculated as the difference between the survey year and the median year built.
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