Analyzing housing affordability of U.S. renters during the Great Recession, 2007 to 2009

ABSTRACT

During the somewhat recent Great Recession, there was a popular notion that housing affordability for all renters had deteriorated. In this study, we investigate this notion by utilizing two national merged American Housing Survey (AHS) data sets from 2007 to 2009. We analyze housing affordability for renters, comparing and contrasting four subgroups in terms of their monthly average household incomes and housing costs, among other variables. We conduct descriptive statistics and multinomial logit analyses in order to predict the probability of a renter being in a given subgroup. We find that 62.90% of renters had increased household incomes but decreased housing cost burdens or decreased household incomes and decreased housing cost burdens, dispelling the notion that housing affordability has deteriorated. We also find that changes in average household income and staying or becoming employed or married translates into high odds of being in subgroups with increased household incomes.

KEYWORDS:

• Housing affordability
• rental housing
• Great Recession
• multinomial logit analysis

Acknowledgements

We would like to thank the U.S. Bureau of the Census for granting the first author Special Sworn Status (SSS) during the first phase of the project when nonpublic data were used. Tamara Cole and Matthew Streeter answered numerous questions and provided constructive feedback during this project phase. Also, we would also like to thank attendees of the American Housing Survey User Conference 2011 in Washington, DC and of the Housing Education and Research Association (HERA) 2014 Annual Conference in Kansas City, Missouri, including Martin Seay, for helpful comments. Finally, we would like to thank the editor and three anonymous reviewers for constructive comments, which improved this manuscript.

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1. We identified stayers through the variable MOVYR, which indicates the year the interviewee moved into the unit. In our case, MOVYR needed to be 2007 or earlier to identify a stayer.

2. The American Housing Survey (AHS) is conducted at the national level every other year. In addition, it is conducted in about five to six distinct metropolitan areas in each survey year. Thus, these different metropolitan samples cannot be merged to compare the multiple-year characteristics of the housing units and households.

3. Subgroup #4 was selected as base case because it matches the popular notion that housing affordability for all renters had deteriorated and was thus left out of analyses. Thus, we focus on other groups, contributing to knowledge.

4. The variable change in average household income (2007–2009; in $) is not based on the mathematical difference between the variable change in average household income in 2007 and 2009; it is based on responses to the income question in both survey years. The average in each year only reflects the responses provided in that particular year. As not every respondent answered the income question in both years, there is a difference that does not reflect the mathematical difference. The same explanation holds for each variable that reflects changes from 2007 to 2009 in this study.

Additional information

Notes on contributors

Katrin B. Anacker

Katrin B. Anacker is an Associate Professor in the School of Policy, Government, and International Affairs at George Mason University in Arlington, VA. She is the current North American Editor of the International Journal of Housing Policy, and the editor of the book The New American Suburb: Poverty, Race, and the Economic Crisis (Ashgate, 2015). Her work has been published in the Journal of Urban Affairs, Housing Policy Debate, Housing Studies, the International Journal of Urban and Regional Research, and Urban Geography, among others.

Yanmei Li

Yanmei Li is currently an Associate Professor in the School of Urban and Regional Planning at Florida Atlantic University in Boca Raton, Florida. Her research focuses on housing policies, and the relationship between housing and neighborhood change. She teaches courses in planning methods, economic development, and urban revitalization.