The Shifting Demand for Housing by American Renters and its Impact on Household Budgets: 1940–2010

25 Pages Posted: 13 Jan 2017

Date Written: January 2017

Abstract

From 1940 to 1960 across 20 large U.S. cities, rental housing's price fell, renters' incomes rose, rent's share in household budgets fell, and, as expected, renters' real housing consumption increased. From 1970 to 2010, rental housing's price increased, renters' incomes decreased, but, unexpectedly, renters' real housing consumption increased. We find neither demographics nor housing supply factors account for the anomalous post‐1970 increase in renters' housing consumption. We conclude that after 1970 there was a nationwide increase in renters' preferences for housing consumption. With incomes falling, renters increased housing consumption by decreasing consumption of other necessities including food, clothing, and transportation.

Suggested Citation

DiPasquale, Denise and Murray, Michael P., The Shifting Demand for Housing by American Renters and its Impact on Household Budgets: 1940–2010 (January 2017). Journal of Regional Science, Vol. 57, Issue 1, pp. 3-27, 2017. Available at SSRN: https://ssrn.com/abstract=2898511 or http://dx.doi.org/10.1111/jors.12298

Denise DiPasquale (Contact Author)

City Research ( email )

111 Atlantic Ave., Suite 311
Boston, MA 02110
United States

Michael P. Murray

Bates College ( email )

Lewiston, ME 04240
United States
207-786-6085 (Phone)

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