Panel Data Estimates of Age-Rent Profiles for Rental Housing
This paper provides estimates of the net depreciation rate for rental housing using a unique confidential data set from the Bureau of Labor Statistics that covers over 30,000 rental units from 1998 to 2009. Our data and econometric approach allow us to add to the literature in three main ways. First, we can control for unobserved quality (including cohort effects) by allowing for unit-specific fixed effects. Our results suggest that estimates of the depreciation rate for rental housing that ignore unobserved heterogeneity suffer from omitted-variable bias and potentially from selection bias, ...
Location, Location, Structure Type: Rent Divergence within Neighborhoods
Housing rents are a large share of household budgets and make a large contribution to overall inflation. Rent inflation rates for different types of housing units sometimes diverge, even in the same neighborhoods. We estimate during 2013 to 2016 apartment rents outpaced rents for detached housing in the United States by 0.76 percentage points annually after controlling for location effects. These rent dynamics imply a segmented housing market. They also suggest rent indexes need to be based on data structurally representative of their measurement objective. In particular, indexes based on ...
The portfolios and wealth of low-income homeowners and renters: findings from an evaluation of Self-Help Ventures Fund’s Community Advantage Program
The distribution of wealth in the United States is more highly skewed than the distribution of income. Nowhere is this clearer than in the case of homeowners and renters. Those who own their homes typically have about 20 to 40 times more net wealth than those who rent. ; Although home equity plays a role in this growing disparity, it does not fully explain why renters hold fewer assets than homeowners. Even excluding home equity, renters are more than twice as likely to be asset-poor as are homeowners. Renters also hold a smaller range of assets than owners, suggesting that homeownership ...
The effects of the real estate bust on renter perceptions of homeownership
After almost a decade of strong price appreciation, the housing market fell into a steep decline in 2007. By 2008, foreclosure filings on owner-occupied homes were surpassing record levels. Due to the housing downturn, fewer renters may aspire to own a home, which could have lasting implications for neighborhoods and household asset building. This study analyzes the impact of the housing downturn on renters? intent to purchase a home, their perceptions of the risks and benefits of homeownership, and their interest in information and advice concerning homeownership. ; Based on a survey of 400 ...
Low Income Housing Tax Credits: strategies for year 15
As the Low Income Housing Tax Credit 15-year compliance period begins to expire on affordable housing projects across the country, the Wyndham Financial Group?s William S. Hettinger examines how organizations are addressing this issue and offers strategies for success.
Preserving small rental buildings
Smart investment in small two- to four-unit buildings?for renewed owner occupancy or nonprofit ownership and management?stabilizes neighborhoods and provides affordable housing.
Challenges of the small rental property sector
Most rental housing in America is found in small multifamily buildings and this sector provides most of the options for low- and moderate-income (LMI) renters. With a growing wave of investors buying distressed properties in LMI neighborhoods, there are concerns about the ability of investors to properly maintain their investments. The author explores the small multifamily sector and suggests ways that policymakers can move beyond code enforcement and provide a combination of carrots and sticks to incentivize and increase the presence of ?good actors."
Buy a home or rent? A better way to choose
Knowing whether buying a home is a better financial move for a family than renting requires a consideration of costs and options that people often neglect to factor in. One aspect of the calculation that is almost always overlooked is uncertainty--the fact that no matter how good one's estimates of the future are, the future can turn out differently than projected. Incorporating uncertainty into the rent-or-buy calculation gives potential homebuyers information that can improve their decisions. While incorporating uncertainty is complicated, it's made easier with the Cleveland Fed's online ...
Low-income housing tax credits in Texas: achievements and challenges
As the LIHTC program faces the biggest challenges of its nearly 25-year history, it's imperative to look holistically at the evolution and distribution patterns of this housing production program. This issue provides a program overview, a current market-condition analysis and an update on recent regulatory changes.