You probably get as frustrated as I do when trying to find good information on single family tenants: rent levels, tenure, income levels. Virtually all the data that is available lumps all renters into one pot, whether they live in high rise apartments, garden apartments, mobile homes or single family homes.
As we all know, single family rentals are undergoing an extraordinary boom. According to the U.S. Census Bureau’s American Community Survey, from 2005 to 2010 single-family rental units as a share of the renter-occupied stock grew from 30.8 percent to 33.5 percent, which was the largest increase among all rental property types.
The ACS (American Community Survey) also for the first time provides some statistical hints at how single family tenants differ from others, information that could be useful to you as you decide how you will manage your rental property, according to a report by Fannie Mae.
Single Family Renters
The single-family renting household differs from single-family owner-occupants and other renting households in household age, income, and household size. Renters in general tend to be younger than owner-occupants. In 2010, 35 to 64 year-olds made up 49.7 percent of renting households compared to 63.1 percent of owning households. However, tenants of single family rental tend to be older. Some 35- to 64-year-olds accounted for 56.8 percent of all single-family renting households.
Single-family rentals cost more to rent than apartments. Thus, single family tenants are just slightly more burdened by their rental costs than those in other types of rentals when comparing the share of renters with a high portion of their income going toward rent. The ACS 2010 data show that 43.8 percent of all renters pay more than 35 percent of their gross household income toward rental costs, including utilities. This compares to 44.1 percent for single-family renters, which is second only to renters of two- to four-unit buildings (44.6 percent). In general, however, rental affordability distributions are similar across the rental property types.
Not surprisingly, households renting single-family houses tend to be larger than those renting multifamily units. The largest share of single-family rental households have two members (25.7 percent) while the largest share of all renting households have one member (37 percent). Also, as can be seen in Exhibit 4, single-family renters with three or more members have a much larger share of the total when compared to all rental households.
Real estate is local, and that is no different in the case of the single-family rental market. Single-family units would be expected to capture a larger share of the rental market in some areas than others because of differences in factors such as foreclosure rates, or changes in employment and median income. This is proven by analysis of ACS data for the 100 most populous MSAs (Metropolitan Statistical Data).
More Statistics about Your Tenants
MSAs differ in the share of the renter-occupied stock that comprises single-family units. Below, we highlight MSAs with the largest and smallest single-family shares of the rental stock. Also highlighted are the MSAs where that share changed the most over the last five years. It is more useful to analyze ACS data over time with this methodology than simply measuring the growth in stock. Data of this nature can help analysts and decision makers narrow a broader trend geographically in order to bring better focus to research overall.
According to ACS estimates, the single-family share of renter-occupied units ranged from 57.8 percent in the Stockton MSA to only 9.8 percent in the New York City MSA in 2010. Simply drawing from the names on the list, the reader can draw some inferences between general housing market characteristics and the concentration of single-family rental housing. Many reasons could be at play as to why one MSA is more or less concentrated toward single-family rentals, including housing options (or supply) and housing preference (or demand). Housing options are a function of land scarcity, local development regulation, and home builder trends while housing preferences are a function of social trends, housing affordability/income levels, household demographics, and the historical timing of peak immigration.
The ACS data also give insight into how markets changed in single-family rental market share from 2005 to 2010. In the United States, single-family share of the rental market increased by 2.7 percentage points while small multifamily properties (5 to 19 units) lost nearly three points of market share. Meanwhile, many MSAs hardest hit by the recession have experienced above average growth in single-family rentership. For example, from 2005 to 2010 single-family rentals in the Phoenix, AZ and Las Vegas, NV MSAs gained 12.3 percentage points and 10.1 percentage points of rental market share, respectively.
Got some stats of your own? Comment below!
Photo: Stuart Richards