In the past couple of years, rental housing affordability has surfaced as a key issue which not only affects the low-income population, but also millions of middle-class renters. A new threat to renters has emerged and is often overlooked.
A new study from Apartment List looked into the age of the rental stock on the market and discovered some issues that could affect the future of rental housing affordability.
The share of rental units less than 10 years old is currently at an all-time low, a surprising statistic given the recent boom in multifamily construction. Furthermore, Apartment List finds that since 2000, median rents have been growing fastest among the oldest cohorts of rentals. This is a big issue considering, in a healthy environment, the older units provide a bit of relief on rent prices. Since 1980, the share of rental units that are 10 years old or younger has been steadily declining, while the share that is over 30 years old has steadily increased.
Older buildings are making up an increasing share of rentals in all of the nation’s largest metros, but this is being strongly felt in the Sun Belt. In San Diego, for example, 40% of rental units were more than 30 years old in 2000. This share had dramatically increased to 67% by 2016.
As seen in the above chart, rental stock is getting older and older in some major California metros. San Diego sees the highest share of rental stock comprised of 31+ year old buildings, but Sacramento, Riverside, and Los Angeles are not too far behind. The below charts show the real median rent growth by building construction cohort for these CA metros.
Oldest Buildings Experience Fastest Rent Growth
Rental Housing Affordability Tied to Low Rate of New Construction
The relatively low rate of new construction has contributed to this issue and could pose a large threat to rental housing affordability for low and middle-income renters in the future. We are starting to see the effects of this with rising rental prices in the oldest of buildings.
For more information, and to view more local data, check out the full article here.
This is a collaborative post.