America s Rental Housing

Transcription

1 America s Rental Housing The Key to a Balanced National Policy Bill Apgar Remodeling Futures Conference April 15,

2 The Mortgage Market Meltdown Collides with Ongoing Rental Affordability Problems Former Owners Add to the Number of Households Competing for the Limited Supply of Affordable Rental Housing The Eviction of Tenants from Foreclosed Rental Properties Further Contributes to the Number of Households in Distress

3 Serious Delinquencies Move Up Sharply 1,400 Loans 60+ Days Delinquent or Entering Foreclosure (Thousands), Seasonally Adjusted 1,200 1, Q4 1999Q4 2000Q4 2001Q4 2002Q4 2003Q4 2004Q4 2005Q4 2006Q4 2007Q4 Prime Subprime Note: Seasonally adjusted rate of delinquency and foreclosures started applied to the 4-quarter moving average of nonseasonally adjusted number of loans serviced. Source: Mortgage Bankers Association

4 Foreclosures Mount in States Across the Country Loans in Foreclosure (Percent), Not Seasonally Adjusted 2007Q4 Under 1.0% 1.0%-1.9% 2.0%-2.9% 3.0% and Over Source: Mortgage Bankers Association.

5 Larger Working Families Face Particularly High Housing Cost Burdens All Households Households With Wage/Salary Household Size Number of Households Share With Wage/Salary (Percent) Share Working 40+ Hours/Week (Percent) Share Unable to Afford FMR (Percent) 1 Person 14, Persons 9, to 4 Persons 9, or More Persons 2, All Households 36, Note: FMRs (fair market rents) are HUD estimates of the gross rent for a modest two-bedroom unit in 530 metropolitan areas and 2,045 non-metropolitan areas. Source: National Low Housing Coalition tabulations of the 2006 American Community Survey.

6 One Minimum-Wage Earner Cannot Afford a Modest Rental Unit Anywhere in the Country 1-2 Times the Minimum Wage 2-3 Times the Minimum Wage 3 or More Times the Minimum Wage Note: required to afford a modest two-bedroom apartment uses the local Fair Market Rent (FMR) in 2008 reported by HUD, and assumes 30 percent of pre-tax income spent on housing and working 40 hours per week for 52 weeks. The federal minimum wage in February 2008 was $5.85 per hour. Analysis is based on methodology developed by Cushing N. Dolbeare and the National Low Housing Coalition. Source: US Department of Housing and Urban Development, Fiscal Year 2008 Fair Market Rents.

7 The Collateral Damage of the Growing Number of Delinquencies and Foreclosures Reaches Deep into the Rental Market Foreclosures Help to Push Up Vacancies and Depress New Rental Construction The Concentration of Foreclosures Destabilize the Most Vulnerable Neighborhoods The Growing Inventory of Vacant and Abandoned Foreclosed Properties Will Accelerate Housing Abandonment and Disinvestment Tightening Credit Standards Further Undermine the Well-Being of Debt Burdened Renters

8 Rising Foreclosures Add to Housing Vacancy Housing Inventory by Tenure and Vacancy Status Thousands Annual Average Change (%) Occupied 105, , , Own 72,054 75,380 75, Rent 33,506 34,195 35, Year Round Vacant 11,631 12,459 13, For Rent 3,676 3,737 3, For Sale 1,308 1,836 2, Held off Market 5,672 5,778 6, Seasonal Vacant 3,643 3,978 4, Source: US Census Bureau, The Housing Vacancy Survey,

9 Multifamily Construction Has Fallen Well Below Historical Peaks Completions (Thousands) For Sale For Rent Source: US Census Bureau, New Residential Construction.

10 Foreclosures Destabilize the Most Vulnerable Neighborhoods 160 Index of Foreclosure Probabilities for Loans Originated in 2006 (100=National Average) Low Middle High Low Middle High Low Middle High Minority Mixed White Note: Loans are first lien owner-occupied loans originated for 1-to-4 family properties. Low income neighborhoods are defined as Census tracts with a median family income less than 80% of the MSA/MD, Middle income neighborhoods are % of the MSA/MD, and high income neighborhoods are greater than 120%. Minority neighborhoods are defined as a census tract with a minority share of the population greater than 50%. Mixed neighborhoods are 10-50% minority, and white neighborhoods are less than 10% minority. Source: JCHS Tabulations of using 2000 Decennial Census and 2006 Home Mortgage Disclosure Act Data.

11 Inventory Losses Focus on Smaller Properties Rental Units in 1995 That Were Permanently Removed From the Stock by 2005 (Thousand) 0 Site-Built Manufactured Single Family Housing 2-4 Unit 5-9 Unit Unit Unit 50 or more Source: Table A-X.

12 Renter Debt Has Grown Substantially Percent Change in Average Debt Outstanding, Bottom Lower- Middle Upper- Middle Top Under and Over White Minorities Quartile Age Race Notes: quartiles are equal fourths of all households sorted by pre-tax income. White householders are non-hispanic, and minority households are not non-hispanic White. Sources: JCHS tabulations of the 1995 and 2004 Surveys of Consumer Finances.

13 Assessment of the Consequences of the Current Mortgage Market Meltdown are Hampered by Lack of Data on the Location and Characteristics of Foreclosed Properties