I just read an interesting article about the rental housing market and the troubles that lay ahead. Challenges of the small rental property sector – N.E Community Development.
Here are some stats from the study:
As the homeownership rate in
the United States drops, more families are
becoming dependent on the rental market.
The number of renters has increased by
over 3 million households for the past four
years, whereas even with steady population
growth the number of homeowners
has remained relatively constant.
New England housing tends to be older than
housing in most other regions, and New England’s
small multifamily properties older still. In 2000,
the median two- to four-family rental property was
nearly 60 years old, while the median five- to 19-unit
building was 40 years old. More significantly, this
stock is not being replaced. Replacement of five- to
19-unit buildings has been going down since the
1970s. Between 1990 and 2000, New England lost
42,000 pre-1990 rental apartments in five- to 19-unit
buildings, or ten percent of the stock, but added only
23,000 new apartments.
The single-family rental housing stock is
constantly replenished, as new single-family homes,
townhouses, and condos are constructed and existing
ones fluctuate back and forth between owner-occupancy
and rental tenure. The same is not true of
small multifamily properties, whether triple-deckers
or small apartment buildings. With rare exceptions,
they can be replenished only through new construction.
As older units are lost, they are often not
replaced, for both regulatory and financial reasons. In
most parts of New England, as well as the rest of the
United States, local zoning ordinances do not permit
multifamily construction, or if they do, permit it only
under conditions that rule out modestly priced small
buildings.
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