Property Management – San Fernando Valley

Study Reveals Shift in Attitude on Renting Vs. Owning
Digested From “Study Reveals Shift in Attitude on Renting vs. Owning”
Chicago Tribune (04/12/13) Podmolik, Mary Ellen

According to a recent Hart Research Associates and MacArthur Foundation survey, 57 percent of adults find that buying a house is less appealing, while 54 percent believe renting is more appealing. Moreover, 45 percent of homeowners say they could be renters at some point. Peter Hart, chair emeritus of Hart Research Associates, says, “The stigma of renting is no longer the case. When it comes to living the American dream, the overwhelming response (is) renting is just as appealing.” And Hart Senior Vice President Rebecca Naser says, “It’s not renting versus owning anymore. It’s a continuum through life.” Part of the shift has come from an increase in single-family rental properties, which have grown to 33.5 percent of all rental housing stock from 30.8 percent. Also improving the view of renting is the continued difficulty in getting a mortgage and the increased flexibility renting provides. Hart reported, “That is a change that is more important than anything else. You’re no longer seen as a second-class citizen. ‘Renting is acceptable’ is where we are headed.” The survey also indicated that nearly 67 percent of respondents said federal housing policy should be balanced between homeownership and renting.

Why Do Renters Move?

Understanding why renters move and why they choose a particular apartment offers valuable insight to apartment management firms and professionals for business strategy and operations. This data is collected nationally every two years in the American Housing Survey (AHS), conducted by the U.S. Census Bureau for the Department of Housing and Urban Development (HUD).

The survey covers a broad range of housing data in addition to information involving the moving processes. The same data is also collected for 47 metropolitan areas about every six years. The national sample covers an average 55,000 housing units. Each metropolitan area sample covers 4,100 or more housing units. Several metro areas are surveyed each year.

National data for the recently released 2003 survey and the 1999 survey are reviewed here. The surveys are not fully comparable in terms of numerical results because the Census Bureau rebased the data to reflect the 2000 Census for housing unit counts for the 2003 survey. Data in the surveys from 1993 to 2001 use the 1990 Census as a base.

Who Moved

A total of 11.9 million rental households moved into their units in 2003. Measured in share terms, about 35 percent of the renters reporting moved into their current unit in 2003, the same ratio was recorded in 1999. About 8 percent of homeowners moved in each of the same periods.

Reasons for Moving

The most often reported main reason for renters to move in 2003, was to establish their own household. It was the second most reported reason in 1999. In 2003, 11.7 percent of renters moved for this reason compared to 11.5 percent in 1999.

Among the 16 specific reasons presented in the reports, a new job or job transfer was the second most reported reason for renters to move in 2003, at 10.5 percent. In 1999, it was 12.5 percent. The weaker labor market in 2003 probably accounted for the change.

Survey respondents could give more than one reason for why they moved from their previous unit. Renters gave an average of 1.3 reasons per response. Homeowners gave an average of 1.9 reasons.

The need for larger units was third most reported main reason given among renter movers in 2003, at 9.5 percent. This was up slightly from 9.2 percent in 1999. Aging of the Baby Boomers generates demand for more space, because, as they move toward their highest income age cohorts, they feel that they need more space and they can afford it.

Choice of Location

Additional data related to the choice of residence for recent movers are also provided in the AHS, including choice of present neighborhood, neighborhood search, and choice of present home. Highlights include:

• The top four main reasons for choosing their present neighborhood included convenience to job (22.5 percent), convenience to friends or relatives (16.1 percent), looks and design of neighborhood (11.7 percent), and in the case of home buyers, the house was most important consideration (11.6 percent).
• Slightly less than half (49 percent) of renter movers looked only at the neighborhood to which they moved in 2003, compared to a little over a third (39.5 percent) of home buyers.
• A financial reason was the most reported main reason for the selection of current units among renter movers in the 2003 survey, at 32.2 percent, meaning they selected what they could afford. The next two most reported reasons among renters were size (14.3 percent) and room layout and design (14.1 percent).

American Housing Survey data for renters and owners is published for many demographic and geographic characteristics. The data may be compared with information that may be collected in move-out or move-in surveys of residents performed by onsite property managers. The findings could be used to refine these interviews.

From the National Apartment Association