AHS Based Analyses

The Destruction of Housing Capital: A Preliminary Exploration into Demolitions and Disasters

With the exception of fine art and jewelry, housing is the most durable of all consumer expenditures. According to the American Housing Survey (AHS), more than ten million units constructed prior to 1920 still survive in the United States. European cities and the surrounding countryside provide countless examples of structures built in the 17th, 18th, and 19th centuries that continue to furnish safe and comfortable habitats. Yet numerous housing units -- both old and new -- are torn down or otherwise destroyed every year in this country. Between 1999 and 2001, 1.5 million housing units disappeared permanently. Fires and natural disasters account for some of these losses but owners voluntarily demolished many other units.

We know little about this phenomenon. For example, how much capital is lost annually, which units are most susceptible to being loss, and what motivates owners to destroy housing capital? A better understanding of these issues could give us useful insights into important social questions. The price and tenure status of the units being lost affects the availability of affordability housing. The costs of regional economic dislocation include the impacts of declining population on the housing stock. Neighborhood transformations involve both people changes and structural changes. For these reasons, the Department of Housing and Urban Development (HUD) commissioned this exploratory study of housing loss.

This paper has two modest goals. First, we will examine how to use the AHS to study these questions. The AHS has features that make it well suited to an analysis of housing loss, particularly its large sample size, extensive information on the physical characteristics of the units, good neighborhood data, and the ability to track the same unit over time. However, researchers must first deal with a number of conceptual and data problems. Second, we will use the AHS to analyze, in a preliminary fashion, what units are destroyed and why.
Click here to download file (*.pdf, 66 KB). Updated 1/7/04

Rental Market Dynamics: Is Affordable Housing For the Poor an Endangered Species?

The market for housing differs from the market for other necessities such as food or clothing in that supply does not respond to demand quickly. The construction of new housing takes time and a variety of factors generally channels the supply of new housing into the high-priced end of the market. For one thing, building codes and zoning rules add to the cost of new housing. Also, it is impractical to build a "run-down" unit affordable to the poor in the same way that it is impractical to build a new "clunker" for the poor to drive. Just as the poor turn to the used car market for their cars, they turn to older units for their housing. The exceptions are if the housing was subsidized in its development.

As units age, housing units are said to "filter" down from serving higher income occupants to serving lower income occupants. But filtration takes time and is uncertain. Shifts in demand, such as higher income households being attracted back to the central city, can cause units to filter up. Rising land prices can push up rents even as the quality of a unit deteriorates.

This study uses American Housing Survey data to examine the changes in the rental housing stock in six metropolitan area (Chicago, Detroit, Los Angeles, New York, Philadelphia, and Northern New Jersey) over the period 1995-1999. It tracks the sources of new rental housing, the reasons for loss of rental housing, and changes in affordability of the existing rental housing stock.
Click here to download (*.pdf, 314 KB) file. Updated on 1/7/04.