Rented Units as a Share of the Housing Stock

The U.S. homeownership rate is a little less below 70%, indicating that a little more than 30% of occupied units are occupied by renters. If vacant units are taken into account, about 27 percent of all housing units in the country are occupied by renters. But this varies considerably from one metro area to the next. The metro areas where the rented share of the stock is greater than 40% are shown in Table 2.

The table contains a mix of different types of metros. A few large metros from the Northeast and California are near the top of the list. The conventional thinking is that these are places where housing costs are very high, making homeownership difficult and driving up the share of renters. But also on the list are some of the smaller metros--both Lawrence, Kansas, and Ithaca, New York, have populations less than 100,000.

Rented Units in Large Apartment Buildings

Nationally, much of the rental housing stock consists of smaller structures. A substantial share is even single family.  Fewer than 45% of renters live in buildings with at least five housing units, but the share is considerably higher in certain metro areas. The metros with the highest percentages are shown in Table 3.

Three of the metro areas in the table are in relatively high cost areas on the East Coast, where high land prices have traditionally led to more intensive land use and taller buildings. Despite the well-known high housing costs in California, there are no metro areas from that state in Table 3. Los Angeles comes the closest to making it, ranking 23rd out of 374 metro areas, with 58% of its renters living in five-plus structures.

Hot Areas for New Construction

Half of the renter-occupied housing units in the U.S. were built before 1972, but the units tend to be newer in some parts of the country, such as in fast-growing Sunbelt locations. Table 4 shows the metropolitan areas where half of the units were built in 1989 or later (indicated by the median year built being 1989 or later). Four of these are relatively small metros. 

There have been a lot of rental units built in each of these metros on a percentage basis in the past decade and a half, so they have been hot rental markets by that measure. In absolute terms, they are still fairly small markets, however. Las Vegas stands out as a metro area with both a large number of renter households (about a quarter of a million) and a fast pace of construction. Half of the renters in Las Vegas are living in units built since 1990. Although it didn’t make Table 4, Orlando is similar to Las Vegas in that Orlando also has about a quarter-million renter households, half of whom are living in housing units built since 1987. 

High Cost Rental Markets

Table 5 shows the metro areas with the highest average gross rents in the country. Gross rent includes most utilities (not telephone or cable services), whether it is the resident or the property owner who pays the bills.

Six of the eight metros in the table are located in California. The other two are on the West Coast. In all of these metros, average gross rent is over $1,200 per month. For the U.S. as a whole, monthly average gross rent is a little over $800.

Most Renters per Unit

Instead of showing a particular trait of the renter-occupied units, Table 6 shows a trait of the renters occupying the units—average household size, or number of persons per rented unit. The average rented housing unit in the U.S. contains 2.4 persons. Keep in mind that this includes single-family as well as multifamily renters.

For the metros in Table 6, the average is greater than 3.2. Some of these metros are in the Southwest, which has a large Hispanic population. Historically, Hispanic residents have tended toward above-average household sizes.

Areas with the Oldest Renters

Table 7 shows the metro areas with the largest share of renters age 55 or older. At first the percentages in the table may not look that large, but it’s important to keep in mind that in the typical case, a relatively small share of 55-plus households will be renters (the 55-plus homeownership rate tops 80%).

For the U.S. as a whole, the share of renters age 55 or older is about 22%. For the metros in Table 7, the percentage is equal to or greater than 33.3%. The metros in the table contain a mix of resort-type areas that are known for being vacation and retirement destinations, as well as areas that have become older primarily because younger households have tended to move out.

High Income Renters

Income is obviously a key market variable, signaling the ability of households to pay for housing of a particular type and quality. In 2005, average household income in the U.S. was about $62,556 overall, but considerably lower among renter households at $37,437. There are several measures of income. The average tends to be higher than the median, because the median is less sensitive to a few individuals with very high income (in this case, median household income is about $7,000 lower than average household income). Table 8 shows the metro areas where the average income of renters is highest.

There is some correlation between the high-income metros in the table and the high-cost metros in Table 5, although the correlation is not perfect. Although most of metros in Table 8 have relatively high rents, there are exceptions. Bridgeport Connecticut, for example, ranks third in terms of income, but ranks only 18th in monthly gross rent ($1,118).

A table showing all of the information discussed above for all 374 metro areas is available through this link.

About this Data

All of the data referenced in this article is derived from the new American Community Survey (ACS), which was first implemented in 2005, to replace the decennial Census long-form questionnaire, which is being discontinued. The ACS is designed to capture equivalent information to that in the decennial long form, but over a five-year period instead of 10. 

As a result, new benchmark data will now become available every year ,with a lag of one or two years. It will take five years to accumulate the same amount of data as in a decennial Census, so data from the 2005 ACS are not tabulated for many of the smaller areas. But the Census Bureau has provided summary tables for more than 300 different metropolitan areas across the country. 

If you’re interested in one of these areas, it’s now possible to go online and look up relatively recent demographic, income, and housing data on the Census Bureau’s website. This site contains a lot of information, and users sometimes find it difficult to locate a particular item quickly. Moreover, some items of interest require more than one piece of information from the website and additional calculation. For example, the site doesn’t provide averages and percentages, such as average gross rent or the percentage of rented units that have been built recently. For either of these numbers, users need to look up two different numbers in the tables and divide one by the other.

For definitions of the Metropolitan Statistical Areas (MSAs), which are aggregations of one or more counties based on commuting patterns, see the official list maintained by the U.S. Office of Management and Budget. Some MSAs are broken into separate Metropolitan Divisions.  In these cases, the tables presented in this article show results for each division separately.

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