Abstract
Housing affordability and potential sources of affordable housing remain national concerns. Using the 10 largest metropolitan statistical areas (MSAs), this study measures the degree to which a multifamily housing property’s age affects its affordability, hence examining the rate at which a necessary step in the filtering process is taking place. We find that a property’s affordability increases by about 2.7% during the first decade of its existence and by about 0.5–1% every following decade, with some variation across MSAs. While this indicates that filtering could be taking place at a relatively slow rate, we show that this can add up to significant rent savings for a low-income family. Lastly, we conduct two follow-up case studies of affordability in Atlanta and Philadelphia.
Notes
1 HUD defines families that pay more than 30% of their income for housing as housing burdened. For more information, refer to https://www.hud.gov/program_offices/comm_planning/affordablehousing
2 The ACS 1-year estimates show that approximately 37% of renters reside in a “5 or more” unit property, which is within the coverage of our data set (6- to 600-unit properties are in our data set from AXIOMetics). As a result, this 37% corresponds to 15.9 million units, which very closely aligns with the national coverage reported by AXIOMetrics.
3 Income data from the Census Bureau are pulled from Moody’s Analytics, which forecasted quarterly median income levels that are used in our analysis. The forecast goes through year-end 2017.
4 For a further explanation of this issue and why a fixed-effects model could not include both property and time effects while estimating the impact of age on housing burden, see Wooldridge (Citation2020, Ch. 14).