3 - Rental housing dynamics and their affordability impact in the United States

Summary

Introduction

In the United States, the term ‘private rental housing’ is seldom, if ever, used. This is because most rented housing in the United States – unlike the UK and other European countries – is under private, for-profit ownership. Nearly all market-rate rental housing is privately owned, as is most subsidised low-income housing. This chapter provides an overview of rental housing in the United States, focusing on key changes that have occurred since 2000, especially in the wake of the foreclosure crisis that began in 2007 and extended to around 2012. The chapter begins with an overview of the rental housing stock, its ownership and management, and its inhabitants, followed by an examination of rental housing affordability. It then turns to key changes in rental housing since 2000. These include relative and absolute growth in renter households; the increasing presence of relatively affluent renters; and the growth of single-family rental housing, which is driven in part by institutional investors. The chapter concludes with a preliminary assessment of how COVID-19 has affected tenants and owners of rental housing.

As of 2021, there were 50.7 million rental housing units in the United States, accounting for 36 per cent of the nation’s total housing stock of 139.8 million units. Ninety-one per cent of the nation’s rental housing is occupied, and 9 per cent is vacant and available for rent. Nearly 90 per cent of all occupied rental housing is privately owned. The rest consists of various forms of social housing. This includes less than one million units of public housing owned by local housing authorities, and about four million units owned by various types of non-profit organisations, cooperatives and community land trusts (Bratt, 2020). While social housing overwhelmingly consists of subsidised housing for low-and moderate-income households, subsidised low-income housing is not confined to social housing. Well over two million units of subsidised low-income housing units are under private, for-profit ownership. In addition, more than 2.5 million low-income households receive tenant-based rental subsidies (Housing Choice Vouchers); most of them reside in privately owned housing. Perhaps because most rental housing is privately owned, nearly all statistical surveys of rental housing do not distinguish between housing under different forms of ownership.