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The User Cost of Low-Income Homeownership

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  • Riley, Sarah F.
  • Ru, Hong Yu
  • Feng, Qing

Abstract

Empirical research examining whether owning a home is less costly than renting for low-income households is largely lacking. We use detailed property information provided by a set of low-income homeowners who participated in the Community Advantage Panel Sur-vey, along with a matched sample of similar rental properties from the American Housing Survey, to determine whether low-income homeowners in the United States would have expe-rienced lower housing costs by renting between 2003 and 2011. We calculate the homeown-ers’ user costs directly from the survey data, and we derive hedonic measures of equivalent rent for these homeowners via pooled regressions of house prices and rents on housing char-acteristics, from which we obtain capitalization rates. For the median homeowner in our sample, we find that owning was less costly than renting a comparable property between 2003 and 2011.

Suggested Citation

  • Riley, Sarah F. & Ru, Hong Yu & Feng, Qing, 2013. "The User Cost of Low-Income Homeownership," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 43(2).
    • Handle: RePEc:ags:jrapmc:243953
    DOI: 10.22004/ag.econ.243953
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    Cited by:

    1. Wainer, Allison & Zabel, Jeffrey, 2020. "Homeownership and wealth accumulation for low-income households," Journal of Housing Economics, Elsevier, vol. 47(C).

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