Examining the Spatial Distribution of Rental Housing


With disruption to home construction from the Great Recession and more recently, declining affordability of homeownership, the number of renters in the US has expanded, reaching 109 million in 2017 or 34 percent of the population (up from 89 million and 30 percent in 2007).

As renting becomes more common, it is important to examine the types of rental structures people live in and their spatial distribution. Using the 2017 American Community Survey (ACS), this post explores the distribution of renter-occupied housing in the U.S.

Detached Rental Housing

After the recession, demand for detached rental homes rose significantly. In fact, detached renter-occupied housing accounted for 40 percent of all rental stock added between 2007 and 2017, more than any other structure type.

Concentrations of detached rental housing are scattered throughout the country, but many metro areas in the Southeast as well as the West have higher concentrations (Figure 1). Of the 10 metro areas with the highest concentrations, five are in California – Merced (59.7%), Visalia-Porterville (53.8%), Modesto (53.2%), Stockton-Lodi (52.4%) and Bakersfield (51.7%). These five metro areas also had some of the highest foreclosure rates at the height of the downturn, indicating an association between areas with high foreclosure rates and detached rental units.

ACS data also show that metro areas with higher concentrations of detached rental units are negatively associated with family income, indicating that detached rentals are more common in areas with lower-income families who cannot afford to buy a home, but are looking for more space than what a typical rental apartment would typically provide.


Attached Rental Housing

Attached renter-occupied units (townhouses) are a small share of the rental stock (6.4 percent in 2017) and accounted for 10 percent of rental stock growth between 2007 and 2017 (2.1 million to 2.7 million units). They do, however, make up a large share of the new construction rental segment: single-family built-for-rent (SFBFR) homes.

Attached rentals are concentrated in metro areas in the Mid-Atlantic region (Figure 2). The metro areas with the largest concentrations are Lebanon, PA (28.4%), Philadelphia (27.7%) and Baltimore (27.1%). The southeast coastal areas and the west coast have moderate concentrations of attached rental units.

Attached units are more common in areas with land constraints. Behind New England, the Mid-Atlantic region has the most expensive lot prices, indicating a shortage of lots. Research also shows that Millennials want to live in medium-density, walkable developments. Going forward, areas with higher shares of millennials may see growth in this structure type.


Large Rental Housing (Buildings with 50 plus units)

Renter-occupied units in buildings with 50+ units make up 12.6 percent of the rental stock and accounted for 21 percent of the rental stock growth between 2007 and 2017, second only to detached renter-occupied units.

Like detached rentals, the concentration of 50+ unit rental structures are relatively dispersed throughout the country (Figure 3). However, the concentration of 50+ unit rental structures reaches 20 percent in only six metro areas – Minneapolis (29%), New York (28.5%), Washington, DC (28%), San Jose (22.8%), Honolulu (21%), and Seattle (20.9%). With the exception of Honolulu, these metro areas have large populations, with at least 2 million inhabitants.

50+ renter-occupied units are most concentrated in metro areas with large urban centers and renter populations.  These areas tend to have lot shortages, but possess zoning for high-density construction.


Manufactured Rental Housing

The manufactured housing share of the rental stock is small at 4.4 percent, and grew by 7 percent between 2007 and 2017. Going forward this segment may grow at a faster pace given ongoing housing affordability challenges.

Manufactured rental housing is concentrated in metro areas in the Southeast and the Southwest regions (Figure 4). The Midwest, Northeast and the coastal west regions have lower concentrations.

Manufactured rental housing is more concentrated in metro areas with lower incomes, many of which are in the South. It provides an affordable option for households who cannot afford to rent single-family structures or to own. Research also shows that demand for manufactured housing is growing among retirees, as it provides a low-cost option for this submarket. This may be why manufactured housing shares are higher in states such as Arizona and New Mexico.


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