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Although almost one-third of all American households rent their shelter, rental housing is the neglected child of American life. In fact, the number of renter-occupied housing units actually increased by 1.1 million from 2000 to 2005, though the nation’s total number of housing units (including vacant units) rose by 8.6 million in the same period (Census Bureau 2000, 2005a). Owning one’s home is fundamental to the American dream. Although millions of well-off households voluntarily choose to rent, rental housing is basically considered second class. Even more significant, America’s poor are concentrated in rental housing , further degrading its status. Among the 15.12 million poor households in America in 2005, 57.4 percent were renters, and they made up 25.6 percent of all renter households. In contrast, only 8.6 percent of owner-occupant households were poor (Census Bureau 2005b, tables 1A-1, 2-12). Of all poor households, 42.6 percent were owner-occupants, but they had substantially more accumulated wealth on average than poor renters. In November 2006 Harvard’s Joint Center for Housing Studies and the MacArthur Foundation sponsored a symposium focused on the nature and condition of rental housing in the United States. Over a two-day period, fifty academic and industry housing experts met in Cambridge, Massachusetts, to present papers analyzing every aspect of rental housing. This introduction presents an overview of the symposium’s general findings. 1 Introduction: Why Rental Housing Is the Neglected Child of American Shelter anthony downs Income Differences between Renters and Owners The concentration of poor households in rental housing is illustrated by the difference in incomes between renters and homeowners. In 2005 the median income among renter households was $27,051, just under half the $55,571 median among owner-occupant households (Census Bureau 2005b, table 2-12). Only 31.7 percent of renter households had incomes of $40,000 or more, compared with 64.4 percent of owner households (Census Bureau 2005b, table 2-12). Renters have lower incomes than owners because, on the average, it costs less to rent than to own one’s own home, and ownership requires amassing an initial down payment that many renters cannot afford. Also, renting households typically move much more often than do home-owning households. Renters can be transient, whereas homeowners must buy and sell their properties in order to move. “Moving up” usually requires having increased equity, but renters often lack that option. According to the 2000 census, 38.8 percent of all renter households moved from March 1999 to March 2000, compared with only 10.3 percent of all owner-occupant households (Census Bureau 2000). Households still on the move are more likely to rent than to own and more likely to have lower incomes and shorter employment records than those who have settled down. Among all those who moved between 1995 and 2000, about 58 percent remained in the same county (Census Bureau 2000). Housing is the single largest expense in the budgets of both renters and owners. According to the Consumer Expenditure Survey for 2005, conducted by the Bureau of Labor Statistics, homeowners spent an average of $54,126 on housing each year, while renters spent $30,462. Spending on all aspects of housing was 31.9 percent of all consumer spending for homeowners and 35.6 percent for renters. For shelter alone, homeowners spent 17.6 percent, and renters 23.95 percent (BLS 2005). Viewing housing spending as a share of total income is unreliable as a measure of housing cost burden, however, because the lowest-income households reported having spent far more than they received as income each year—which implies that their income reporting was erroneous, probably because they omitted credit card debt or gray-market receipts. According to the U.S. Census Bureau’s American Community Survey for 2005, 31.9 percent of all renter households had incomes of less than $20,000 a year, and among them, 86.2 percent spent more than 30 percent of their incomes on housing. In contrast, among homeowner households, 12.5 percent had incomes under $20,000 a year, and 68.0 percent of those spent more than 30 percent of their incomes on housing (Census Bureau 2005a). Locational Differences Renter households tend to be concentrated in central cities, while owner-occupant households are more prevalent in the suburbs. According to a 2005 American 2 anthony downs [18.218.184.214] Project MUSE (2024-04-24...

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