Are Renters and Homeowners in Rural Areas Cost-Burdened?

by Sonali Mathur
Research Assistant

As our latest report and interactive map illustrate, housing affordability is one of the biggest challenges faced by owner and renter households in most metro areas across the US. However, maps that use metro areas to display the local-level story miss the fact that cost burdens are also a major concern in non-metro/rural areas and are severely high for millions of low-income rural households. To address this gap in visibility, we created a set of interactive maps (Figure 1) using 2010-2014 American Community Survey (ACS) estimates. In doing so, we found that housing cost burden rates in some rural counties are significant. We also learned that rural counties of the Northeast and west, that are adjacent to high-cost metros, have even higher cost burden rates than those in parts of the Midwest.

 (Click to launch interactive map; may take a moment to load.)

Housing cost burdens are particularly stark for rural renters. Indeed, fully 41 percent of all rural renters are cost-burdened (meaning they spend 30 percent or more of their income on housing), including 21 percent who are severely cost-burdened (spending 50 percent or more of their income on housing). Among owners, 22 percent are cost-burdened including nearly 9 percent who are severely cost-burdened. Overall, nearly 5 million rural households pay more than 30 percent of their monthly income toward housing and more than 2.1 million rural households spend more than half of their income on housing.

And cost burdens have been growing in rural areas (Figure 2). Since 2000, housing costs in rural areas have increased over 5 percent and one in every four rural households is now cost-burdened. Comparing burden rates from 2014 to those from 2000 in the maps above shows the increasing cost burdens in many rural areas over the last decade, including areas in and around the traditional Black Belt counties of the Southeast and areas in the west and Northeast that are contiguous to areas that had high cost burdens in 2000.

Source: JCHS tabulations of US Census Bureau, American Community Survey 2010-2014 and census 2000 for all non-metropolitan census tracts. 

Rural affordability issues tend to receive less attention due to a perception that housing costs are lower in rural areas, which is true as compared to metro areas. According to the 2013 American Housing Survey (AHS) the median monthly rent in metro areas is $800, while the median monthly rent in non-metro areas is $530. Monthly owner costs are also fully 43 percent lower in non-metro areas than in metro areas. However, low incomes and poverty are prevalent in rural areas. According to estimates from the American Community Survey, fully 15 percent of all households in non-metro area census tracts earn less than $15,000 annually and nearly 36 percent earn less than $30,000. Poverty is a widespread problem in rural areas, with 18 percent of population living in poverty compared to 15 percent in metro areas.

In addition to poverty and affordability, rural areas face several other major housing challenges. The share of housing stock that would be considered inadequate, as measured by the number of units lacking complete plumbing or a complete kitchen, is higher in non-metro areas. The share of units lacking complete plumbing is 4 percent in non-metro areas, compared to 2 percent nationally.

Among units in non-metro areas that lack complete plumbing facilities, 10.3 percent also have more than one occupant per room (compared to 8.2 percent in metro areas). This suggests that in non-metro areas there is likely to be overcrowding in the same units that lack adequacy. It is probable that the households facing affordability problems are dealing with it alongside other issues.

While it is true that cost burdens are high and a growing problem in most metro areas across the country, it is important to remember that non-metro areas also face increasing housing affordability issues, in addition to other housing-related challenges and should not be forgotten in policy discussions of a comprehensive approach to the escalating housing affordability problem.

Housing Inadequacy Remains a Problem for the Lowest-Income Renters

Irene Lew
Research Analyst

In the early 1970s, in response to growing concerns about the housing conditions of poor families, the US Department of Housing and Urban Development (HUD) developed a measure of housing adequacy for its American Housing Survey (AHS) that continues to be used by the agency today. This adequacy measure was originally designed to evaluate the extent to which the national housing stock met the standard of “a decent home and a suitable living environment” established by the Housing Act of 1949. While the condition of the housing stock has improved over the past several decades, the rental stock is still three times more likely than the owner-occupied stock to be considered inadequate. And problems persist among the most affordable rentals.

While fairly complex, the AHS adequacy measure factors in various housing problems related to plumbing, heating, electrical wiring, and maintenance. Using this AHS measure, the majority of the nation’s rental housing stock is in physically adequate condition. As of 2013, just 3 percent of occupied rental units were categorized as severely inadequate and 6 percent were moderately inadequate. In fact, the adequacy of the rental stock has improved over the past decade, with the share of rentals categorized as physically inadequate declining from about 11 percent in 2003 to 9 percent in 2013. 

Notes: Inadequate units lack complete bathrooms, running water, electricity, or have other deficiencies. 

Source: JCHS tabulations of HUD, American Housing Surveys.

Stricter building codes have certainly helped to encourage higher quality, particularly the construction of units with complete plumbing and heating systems. As a result, severe physical deficiencies have been rare among the rental stock, especially among newer rentals. Just 1 percent of rentals built 2003 and later was classified as severely inadequate, compared to 4 percent of those built prior to 1960.

It is noteworthy, however, that the AHS adequacy measure does not account for certain health-related quality issues such as the presence of mold or structural issues such as holes in the roof or foundation, so housing quality problems may in fact occur at higher rates than the survey reports. And although physical deficiencies have become less common among the nation’s rental housing stock, housing problems disproportionately appear in units occupied by the lowest-income renters. In 2013, 11 percent of units occupied by extremely low-income renters (those with incomes less than or equal to 30 percent of area medians) were physically inadequate, compared to just 7 percent of those with incomes above 80 percent of area medians.

Notes: Extremely low / very low /  low income is defined as up to 30% / 30–50% / 50–80% of area median income. Inadequate units lack complete bathrooms, running water, electricity, or have other deficiencies.

Source: JCHS tabulations of HUD, 2013 American Housing Survey.

The lowest-income households also accounted for the largest share of renters reporting overcrowded conditions and physical housing problems such as toilet breakdowns, exposed electrical wiring, heating equipment breakdowns lasting six hours or more and the presence of rats in the unit. 

Notes: Extremely low / very low /  low income is defined as up to 30% / 30–50% / 50–80% of area median income Overcrowded conditions refer to units where there are more than two people per bedroom. Holes in the floor are those that are about four inches across.  

Source: JCHS tabulations of HUD, 2013 American Housing Survey.

Matthew Desmond’s most recent book, Evicted, vividly captures these statistics, drawing attention to the grim housing conditions of families in low-rent units in inner-city Milwaukee who must live with the constant presence of roaches and other vermin, clogged sinks and bathtubs, holes in their windows, and broken front doors.

Rentals occupied by extremely low-income households in central cities have the highest physical inadequacy rates, especially those located in small multifamily buildings with 2-4 units. Indeed, 16 percent of these units were categorized as inadequate, compared to 12 percent of those in buildings with 50 or more units. As I pointed out in a previous post, small multifamilies are a critical source of low-cost housing because they tend to charge lower rents than those in much larger structures, but much of this stock is rather old and at higher risk of loss from the affordable stock due to deterioration.

As this recent NPR piece suggests, the narrow margins for mom-and-pop landlords operating in low-income neighborhoods do not provide sufficient incentive for landlords to make improvements or repairs in a timely manner. Indeed, according to the American Housing Survey, 13 percent of extremely low-income renters reported in 2013 that the owner of their unit usually did not start major repairs or maintenance quickly enough, compared to less than half that share (6 percent) among higher-income renters with incomes above 80 percent of area medians.

The prevalence of housing deficiencies among units occupied by the lowest-income renters highlights the importance of bolstering building code enforcement efforts at the state and local levels. However, municipalities are often faced with tight budgets that lead to dwindling code enforcement teams. Indeed, according to one estimate in 2013, Cleveland and Detroit, among others, have cut their code enforcement workforce by about half since the middle of the last decade. Cities like Baltimore, Portland, and the San Francisco Bay Area are also facing shortages of building inspectors that make it difficult to deal with building code violations. While increased code enforcement can identify landlords who are failing to maintain their properties, this could also lead to unstable housing situations for current tenants. Renters may withhold rent or call local building inspectors as a tactic to push landlords to make necessary repairs, but this could lead to eviction threats or the initiation of a formal eviction process due to nonpayment of rent.

At the federal level, budgetary constraints have also impacted efforts to address the physical deficiencies among the aging public housing stock, which was largely built before 1970. Federal appropriations for the public housing capital fund fell by 34 percent over the past decade and HUD is faced with an estimated backlog of $26 billion in capital maintenance and repairs (as of 2010). HUD’s housing choice voucher and project-based rental assistance programs, which subsidize rentals for low-income households in the private market, require landlords to pass annual or biennial inspections for housing quality. However, the public housing stock is not subject to regular inspections and has largely been prohibited from using private capital to finance capital needs and repairs. As a result, compared to other types of assisted rentals, physical housing problems are more common among the public housing stock. In 2013, over half (53 percent) of public housing units had more than two heating equipment breakdowns lasting at least six hours and 13 percent of units had water leaks due to equipment failures within the previous 12 months.

Living in unsafe, physically inadequate housing can lead to adverse health and developmental outcomes for low-income families. Indeed, recent research confirms that children exposed to defects such as leaking roofs, broken windows, rodents, and nonfunctioning heaters or stoves were more likely to experience emotional and behavioral problems. Among five housing characteristics studied—quality, stability, affordability, ownership, and receipt of housing assistance—poor physical quality of housing was the most consistent and strongest predictor of emotional and behavioral problems in low-income children and adolescents. Poor housing conditions such as mold, chronic dampness, water leaks, and heating, plumbing, and electrical deficiencies, are also associated with health risks like respiratory illness and asthma. These findings underscore the urgent need for cities to prioritize code enforcement and work collaboratively with nonprofit tenants’ rights groups to deal with landlords who are not responsive to requests for necessary repairs.

Housing Cost Burdens Weigh Heavily on Low- and Moderate-Income Renters Across the Country

by Ellen Marya
Research Assistant

The Joint Center’s new report – America’s Rental Housing: Expanding Options for Diverse and Growing Demand – highlights the now familiar trend of increasing affordability pressures facing renter households. As of 2014, just under half (49.3) of renters were housing cost burdened, spending more than 30 percent of income on housing costs. This share includes more than one-quarter (26.4 percent) of renters who were severely cost burdened, spending more than half of their income on housing. The burden percentage rates remain near their peaks reached in 2011. In total, 21.3 million renters were cost burdened in 2014, 11.4 million severely so, both all-time high numbers.

Notes: Moderately (severely) cost-burdened households pay more than 30% and up to 50% (more than 50%) of income for housing. Households with zero or negative income are assumed to have severe burdens, while households paying no cash rent are assumed to be without burdens.

Source: JCHS tabulations of US Census Bureau, American Community Surveys.

Our interactive map series, released in conjunction with America’s Rental Housing, illustrates that renters across the country are experiencing housing cost burdens at high frequencies. In the nation’s 917 metropolitan and micropolitan statistical areas, the cost-burdened share of renters ranged from about one-quarter to nearly two-thirds in 2014, with between 40 and 50 percent of renter households housing cost burdened in the typical metro. Over half of renters were housing cost burdened in more than 200 metro and micro areas. Among these highly burdened localities are some of the nation’s largest metros, such as Miami, Los Angeles, New York, Philadelphia, and Atlanta. Also highly burdened were many smaller areas either with particularly high housing costs, such as Santa Cruz, Key West, Juneau, and Olympia, or with significantly lower incomes, such as Laredo, TX, Monroe, LA, Las Cruces, NM, and Flint, MI.

The link between low incomes and high cost burdens is evident across the country, and for those with the lowest incomes, housing cost burdens were nearly unavoidable. Among renters with household incomes under $15,000 per year – equivalent to full-time work at the federal minimum wage – just under 84 percent were housing cost burdened nationwide in 2014. Rates reached upwards of 90 percent in over 100 areas both large and small – Denver, Los Angeles, Dallas, Milwaukee, Walla Walla, WA, Sheboygan, WI, and Grand Forks, ND – and were above 50 percent for all but two small micro areas – Beatrice, NE and Ardmore, OK.

Even among middle-income renters with household incomes between $30,000 and $45,000, housing cost burdens are widespread. Nationwide, about half (48.4 percent) of households in this income group were cost burdened in 2014. Burdens for this group were especially high in several pockets across the country, typically in areas with especially high-cost housing. Upwards of 55-60 percent of moderate income renter households were cost burdened in metro and micro areas along both coasts, near major interior population centers such as Chicago and Atlanta, and in areas across Texas and northern Colorado.

These data show that, across the country, housing cost burdens are no longer a problem only faced by renters at the bottom rung of the income ladder. Indeed, their prevalence among moderate income renters is growing rapidly. Between 2001 and 2014, a time of strong growth in renting, the number of renter households with incomes between $30,000 and 45,000 increased by just over 13 percent. At the same time, the share of renters in this income group with housing cost burdens rose 11.5 percentage points from 36.9 to 48.4 percent, the largest jump among any income group. As a result, the number of moderate-income renter households with housing cost burdens increased by over 48 percent between 2001 and 2014. This dramatic rise underscores the growing affordability challenges facing America’s renters during a time of increasing demand for rental housing.

The dynamics of this demand, along with the supply response, market conditions, and policy challenges facing today’s renters, are explored in more detail throughout America’s Rental Housing.

Most Inadequate Condition Manufactured Homes Were Built After the Introduction of Federal Building Code

by Matthew Furman
Gramlich Fellow

Since 2000, nonprofits and government entities have increasingly sought to diminish negative perceptions associated with manufactured housing by sponsoring programs that replace substandard mobile homes with state-of-the-art, energy efficient units. As national organizations, such as the Corporation for Enterprise Development and NeighborWorks America, consider scaling up these programs, it is important for housing professionals to ask: what has worked and what has not in this policy space?

As a 2014 Edward M. Gramlich Fellow in Economic and Community Development at the Joint Center for Housing Studies, I had the opportunity to explore one aspect of this question: whether or not nonprofits should focus on replacing manufactured housing built before the introduction of federal building standards in 1976. Some replacement programs exclusively target manufactured housing built prior to the advent of the national building code for manufactured housing (“the HUD Code”) under the rationale that pre-HUD code units are in the worst condition.

The 2011 American Housing Survey (AHS) suggests, however, that units built prior to the introduction of this code in 1976 are not the most likely ones in the manufactured housing stock to be inadequate. In fact, while 10.6 percent of units built between 1970 and 1975 are in inadequate condition, the figure is 10.8 percent of those built between 1985 and 1990. More manufactured homes that are now in inadequate condition were built after the HUD code but prior to the code’s 1994 update (approximately 280,000 homes) than were built prior to the HUD code (144,000 homes).

Source: American Housing Survey, 2011

As shown in Figure 2, pre-1975 units do not demonstrate significantly higher levels of physical inadequacy than 1975-1995 units across a range of features. There are several plausible explanations for this phenomenon. First, the construction standards enacted after the HUD code might not have ushered in an epochal shift. Substandard materials continued to be used in construction into the 1980s; problems with unit installation on sites and enforcement of building standards can undermine the effectiveness of the HUD code. Second, the worst conditioned manufactured homes built prior to the 1976 code might have already fallen out of the market. The units that remain are those that have benefited from weatherization or maintenance.

Source: American Housing Survey, 2011

Roughly 10 percent of manufactured homes, which is approximately the percentage of units in inadequate condition for homes built from 1965-1990, may also represent a natural level of inadequacy for manufactured housing after twenty years in use. Figure 3 compares 2011’s stock of inadequate manufactured housing by year built with the inadequate stock from 2001. A relatively small uptick in the percentage in inadequate condition is evident among units older than twenty-five years. Particularly striking is the sharp decline during the 2000s in the number of inadequate units from 1960-1975: these units are leaving the housing stock. Meanwhile, the number of units from the 1980s in inadequate condition has risen sharply. What policymakers must consider is whether post-HUD code units built in the 1980s will soon leave the market at the same rate as 1960-1970s pre-HUD code units did during the 2000s. At present, the large number of inadequate condition units that were built after the HUD code suggests that the administrators of programs that aim to replace substandard housing should not limit eligibility to pre-HUD code units, which is a common practice. Instead, all inadequate manufactured units, regardless of the period in which they were built, should be eligible for replacement.

Source: American Housing Survey, 2001 and 2011

Read more in Matthew's Gramlich fellowship paper, Eradicating Substandard Manufactured Homes: Replacement Programs as a Strategy

Advancing Inclusive and Sustainable Urban Development

by Eric Belsky
Managing Director

Tackling urban poverty and attending to its spatial manifestations is vitally important. The speed with which many regions of the world are urbanizing, the haphazard spatial development of urban areas, and the deplorable living conditions of more than 800 million slum dwellers make the need to address urban poverty more urgent than ever. Climate change is only intensifying the necessity to act, as the urban poor tend to occupy land susceptible to physical risk, such as steep slopes, flood plains, or low-lying coastal areas made more vulnerable with extreme weather and climate variability. At the same time, however, government and business leaders are awakening to the potential to advance social and economic development by engaging the urban poor as consumers, producers, asset-builders, and entrepreneurs.

The Joint Center’s recent report, Advancing Inclusive and Sustainable Urban Development: Correcting Planning Failures and Connecting Communities to Capital, highlights the challenges of tackling urban poverty as well as promising strategies to do so. Obstacles to addressing slums and realizing the potential of slum residents include weak, non-participatory, and uncoordinated urban planning. National governments often establish regional authorities or public-private partnerships to plan major investments in urban infrastructure that fail to consider broader regional land use planning goals, community input, or the needs of poor communities. Local land use regulations and plans, to the extent that they exist at all, are not widely followed. Plans for slums seldom situate them in the context of broader plans for the urban region. And the non-governmental organizations that do much of the work to improve slums rarely coordinate their efforts. In addition, community-based organizations often are weak and not incorporated into the government’s urban planning process.  Finally, these governments, authorities, and partnerships generally fail to formulate specific strategies to improve or redevelop slums in ways that leave the poor better off.

Yet many examples of better planning practices exist around the world: efforts to develop national strategies for urban development and poverty alleviation, metropolitan regional planning and governance, anticipatory planning for urban growth and climate change, spatial planning and coordination of land uses and investments, participatory planning and community engagement, asset building for the poor, and institutional transparency and accountability through initiatives such as participatory municipal budgeting.

Drawing on these positive examples, several strategies emerge to improve urban planning and investment in order to spur inclusive and sustainable urban development. Most important, spatial planning must be fully integrated with investments in infrastructure, and the development of regional plans must involve participation by all stakeholders. A variety of practices can support inclusive, integrated planning such as funding for multi-stakeholder planning at the regional level and investment in community-based organizations and their intermediary supports. Government capacity can be built through national urban development commissions—spurred by intergovernmental, international bodies—charged with developing plans for inclusive and sustainable urban development. Technical assistance and capacity building can help national, regional, state, or local governments form and manage public-private partnerships, optimizing the use of scarce public resources while also introducing stronger and more rational spatial and participatory planning techniques into the process. A host of other tools described in the report can support more coordinated planning and investment as well as innovation in employment and small business, housing, and infrastructure programs in slums.

Taken together, these actions would greatly improve planning for inclusive and sustainable urban development and create an international movement to focus on these issues. With a growing list of examples of best practices to address urban poverty in effective ways (many summarized in the report), the Millennium Development Goals established by the United Nations still before us, and a chorus of globally-branded businesses (including McKinsey and JP Morgan Chase) calling for better urban planning and poverty amelioration strategies, there is a chance that these issues will gain the international attention they deserve and lead to concrete actions.

Read the new Joint Center report: Advancing Inclusive and Sustainable Urban Development: Correcting Planning Failures and Connecting Communities to Capital

A Housing Recovery, but Not for All Americans

by Eric Belsky
Managing Director

Driven by rising home prices and growing demand, the U.S. housing recovery is well underway, according to our latest State of the Nation’s Housing report released today. While still at historically low levels, housing construction has finally turned the corner, giving the economy a much-needed boost. But even as the recovery gains momentum, millions of homeowners are still delinquent on their mortgages or owe more than their homes are worth, and severe housing cost burdens have set a new record.

Driven by an increase of 1.1 million renter households, last year marked the second consecutive year of double digit percentage increases in multifamily construction. But the flip side of the strong rental market was the continued slide in homeownership rates. Even as historically low interest rates have helped make the monthly cost of owning a home more favorable than any time in the past 40 years, the national homeownership rate fell for the eighth straight year in 2012. The drop was especially pronounced for 25–54 year olds, whose homeownership rates were at their lowest point since recordkeeping began in 1976.

Note: White and black households are non-Hispanic; Hispanic households can be of any race.
Source: JCHS tabulations of US Census Bureau, Current Population Surveys.

Tight credit is also limiting the ability of would-be homebuyers to take advantage of today’s affordable conditions and likely discouraging many from even trying.  At issue is whether, and at what cost, mortgage financing will be available to borrowers across a broad spectrum of incomes, wealth, and credit histories moving forward.

And while the recovery is good news for many, the number of Americans shelling out half or more of their incomes on housing is at an all-time high. At last count, 20.6 million households were shouldering such severe burdens, including nearly seven out of ten households with annual incomes of less than $15,000 (roughly equivalent to year-round employment at the minimum wage). But, the report notes, even as the need has never been greater, federal budget sequestration will pare down the number of households receiving rental housing assistance.

Notes: Severely cost-burdened households spend more than 50 percent of pre-tax income on housing costs.  Incomes are in constant 2011 dollars, adjusted for inflation by the CPI-U for All Items.
Source: JCHS tabulations of US Census Bureau, American Community Surveys.

With rising home prices helping to revive household balance sheets and expanding residential construction adding to job growth, the housing sector is finally providing a much needed boost to the economy, but long-term vacancies are at elevated levels in a number of places, millions of owners are still struggling to make their mortgage payments, and credit conditions for homebuyers remain extremely tight. It will take time for these problems to subside. Given the profoundly positive impact that decent and affordable housing can have on the lives of individuals, families, and entire communities, efforts to address these urgent concerns as well as longstanding housing affordability challenges should be among the nation’s highest priorities.

Download the 2013 State of the Nation's Housing report.

Watch our webcast of the report's release.

The Return of Substandard Housing

by Kermit Baker
Director, Remodeling
Futures Program

The magnitude of the housing bust that began in the middle of the past decade is well documented, with a 75 percent plunge in housing starts, 45 percent decline in existing home sales, and 30–35 percent slide in house prices. Less well known is how the housing bust and the ensuing cutbacks in residential investment have eroded the condition of existing homes.

Reasons for concern over the potential for underinvestment in the housing stock are numerous, from the aging of the rental stock to the rising share of homeowners with underwater mortgages to the surge in foreclosures and short sales. In fact, there has been a significant decline in spending on homes during the housing bust. Average annual improvement spending by owners declined 28 percent between 2007 and 2011 after adjusting for inflation, totally erasing the run-up in spending during the boom years. Rental units never saw a run-up last decade, so per unit spending was down 23 percent between 2001 and 2011.

Figure 1

Sources: JCHS tabulations  of 2001-07 C-50; 2001-11 AHS; and Estimating National Levels of Home Improvement and Repair Spending by Rental Property Owners by Abbe Will, JCHS Research Note N10-2, October 2010.

There has been surprisingly little concern in policy circles that this significant reduction in housing investment might be producing deterioration in our housing stock. Thanks largely to the success of government housing programs and the increasing affluence of our population, the condition of the housing stock has largely dropped from policy makers’ radar screens in recent decades.

The first Census of housing in 1940 labeled 45.4 percent of owner-occupied units as substandard, which was defined as housing which lacked complete plumbing facilities or was dilapidated. This share dropped sharply over the next several decades, falling all the way to 6.1 percent in 1970 according to Clemmer and Simonson’s analysis in a 1983 article in the AREUEA Journal. Because measures of housing quality were dropped after the 1970 Census due to unreliability of data and the subjective measurement of structural quality, more recent statistics on the number of substandard units are not available from the Census.

However, beginning in the early 1970s, information from the American Housing Survey (AHS) points to the structural condition of the housing stock continuing to show slow but continuous improvement.  As of the 2007 AHS, just 2.27 million owner-occupied homes, or 3.0 percent of the total, were characterized as moderately (with fairly minor structural problems) or severely inadequate (with more major structural problems), down from 3.24 million or 5.1 percent of the total in 1995.

Figure 2

Notes: A housing unit is defined as inadequate through a combination of gross unit attributes such as lacking complete kitchen or bathroom facilities or running water, as well as signs of disrepair such as leaks, holes, cracks, peeling paint, and broken systems. For a complete definition, see the US Department of Housing and Urban Development’s Codebookfor the American Housing Survey, Public Use File: 1997 and Later.  Source: JCHS tabulations of the 1995-2011 AHS.

Since the housing market bust, however, this trend has reversed. By 2011, more than 2.4 million owner-occupied homes were classified as inadequate, an increase of 160,000 from the 2007 AHS. While this increase seems fairly minor in the big picture, the importance of it is not. Given available data, this appears to be the first significant increase in the share of homes with structural problems since the government was able to track them beginning with the 1940 census.

Now that the housing market is recovering and residential investment is increasing, this dip in the quality of the housing stock may well reverse as these homes are improved. However, recent Joint Center analysis concludes that once a downward cycle in housing quality is underway, for many homes it doesn’t get reversed. This analysis focused on owner-occupied homes that were characterized as inadequate in 1997, looking at their experience over the following decade but before the dramatic rise in distressed properties.

According to the 1997 AHS, 4.4 percent of owner-occupied homes were considered inadequate. By 2007, these units accounted for almost 8 percent of homes in this 1997 cohort that were no longer owner-occupied (vacant, or converted to rental or nonresidential uses), suggesting that they were less in demand. Even more telling is that these inadequate units accounted for almost 17 percent of all 1997 owner-occupied homes that were demolished within the decade.

The longer-term fate of the current slightly larger number of inadequate homes is unknown. Many of these homes likely will be renovated to provide affordable housing opportunities. However, many may not recover without extra help. Given the extraordinary circumstances that many homes have gone through in recent years, particularly foreclosed homes that often were vacant and undermaintained for extended periods of time as they worked their way through the foreclosure process, they may be more at risk than their inadequate predecessors. It’s probably time to put the structural condition of the housing stock back on the housing policy agenda.