Two new reports released by HUD find that the national housing market continued to shed deeply affordable and subsidized rental units between 2007 and 2009, even as the rental stock overall grew dramatically.
HUD’s Rental Market Dynamics, based on the biennial American Housing Survey released every two years, focuses specifically on the trends related to rental affordability and finds that the number of non-market units (no-cash rent and units with some form of subsidy) decreased by 1.5 million over the two-year study period, a decline of 18% of the 2007 rental stock. The number of extremely low rent units, affordable to renters with incomes of less than or equal to 30% of the area median income (AMI), decreased by 569,900 units during the same period, representing a decline of 25% from 2007. In all other rent categories, there was an increase in the number of affordable units.
The report finds these trends were due to the dynamism of the rental housing stock as the housing market crashed over this period. The study posits that this trend may be linked to gentrification and the upgrading of lower-cost rental units in older neighborhoods, what might be termed “upward filtering” to meet growing demand. To a lesser degree, the trend is due to a decline in new rental construction.
The rental market study attributed the majority (90%) of the losses in affordable housing stock to the rise in rents and the resulting movement of rental units into more expensive rent categories. Among units affordable to extremely low income tenants in 2007, the study estimates that 55% became less affordable over the two years. The report also found a net inflow of units from the owner-occupied and for-sale stock to rental. Upward filtering and the shift from owner to rental seems also to be behind a net increase in rental housing affordable to very low and low income households (earning over 30% through 80% of AMI).
The Components of Inventory Change (CINCH) report is also based on the AHS, but looks more broadly at the number of units lost and added to the nation’s housing stock. Across all occupied units, the CINCH report found that the highest loss rate was experienced by units occupied by welfare recipients. The authors tie this finding to higher rates of severe damage and condemnation among units occupied by welfare recipients.
Overall, the rental housing stock, including vacant rental units, grew by approximately 694,000 units between 2007 and 2009. There were a total of 40.6 million rental units in 2009. Over 800,000 rental units were lost through demolition or repurposed for non-residential usage.
Both Rental Market Dynamics and the Components of Inventory Change reports provide a clear indication of the worsening trend in rental housing affordability and some of its causes. However, they are also fairly technical reports that provide a range of estimates for the change in the stock based on whether the change is measured using the specifications of the 2007 or 2009 surveys. In addition, it is notoriously difficult to ask respondents in a general survey about whether their home is subsidized and as a result, the American Housing Survey definition of subsidized housing is somewhat broad and imprecise. Readers should keep these caveats in mind as they seek to use the specific data in their own work.
The 2007-2009 CINCH and Rental Market Dynamics reports can be found on the HUD website at: http://www.huduser.org/portal/datasets/cinch/cinch09/cinch07-09.html