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June 2015 Policy Study, Number 15-6


The Nanny State Is Expanding And Private-Property Rights Are Decreasing


Background on America's Housing and Rental Patterns



Owning real estate and renting houses and apartments has long been a profitable business for many people and a reasonable choice of housing for many households.  Renting allows greater personal flexibility in living arrangements – including ease of moving for job or personal reasons, increased cost controls to help manage expenses, and no responsibility for maintenance.  As of 2012, 35 percent, or one of three American households, rent – the highest percent in the last 30 years, with the most growth in the 30 to 39-year-old age groups.[1]  There has also been an increase in renting among those over age 70, for similar reasons.


In particular lower-income people are more likely to rent, whether younger or older.  Half of all renters are people with incomes under $30,000 a year.[2]  Many of these people also have children, whether as a single parent or as a couple.  However, the demographics of renters are changing.  Over the next ten years, according to the Harvard Center for Housing Studies, there will be significant growth in the number of people over age 65 wanting to rent and in minorities renting – especially Hispanics.  These groups of people will include both married couples with several children or extended families and singles – also with one or more children.  There are many types and qualities of rental property available to those choosing to rent.


In general the types of properties available for rent are broken out as follows:

4 of 10 units                Single-family homes
2 of 10                         Small buildings with 2-4 units
3 of 10                         Typical apartment buildings with 10+ units[3]


Property owners, on the other hand, typically live in single-family houses in homogenous neighborhoods, especially in suburban or exurban areas.  Few property owners live in condominium or their own apartment buildings.  Homeowner neighborhoods end up being homogenous as a developer will sell similar-sized lots and build similar-quality homes on them. 


Renters are spread about evenly between city or urban settings and more suburban settings.  Because many of those interested in renting are lower income, the areas where they live become lower-income areas, with a different mix of services than might be found in an upscale neighborhood.  This is an intuitive result, as the size, quality, and pricing of apartments within a building or complex are typically not going to vary widely between high-end and low-end units, just as they do not vary widely in single-family-home areas.  The mix of services needed may also be expected to vary between rental and owner-occupied property areas.  For example, renters typically do not need a hardware store close by, as they are not doing their own repairs and upgrades.




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