IDEAS home Printed from https://ideas.repec.org/a/sae/urbstu/v55y2018i10p2106-2122.html
   My bibliography  Save this article

The impact of income inequality on rental affordability: An empirical study in large American metropolitan areas

Author

Listed:
  • Hongwei Dong

Abstract

American metropolitan areas have experienced rising income inequality and worsening rental affordability in the past few decades. Has the rise of inequality caused worsening rental affordability? This study conducts both cross-sectional and longitudinal analyses to examine the impact of income inequality on rental affordability for low-income tenant households at the county level in America’s largest 100 metropolitan areas. The cross-sectional analyses reveal that, everything else equal, an increase of Gini coefficient by 0.1 in a county was associated with 2.2 and 4.4 percentage points more severely rent-burdened low-income households in 2000 and 2008–2012, respectively. The longitudinal analyses confirm that rising income inequality caused worsening rental affordability for low-income tenant households in large American metropolitan areas between 2000 and 2008–2012. On average, counties that experienced a 0.1 greater increase in Gini coefficient from 2000 to 2008–2012 saw faster growth of severely rent-burdened low-income tenant households by 2.9 percentage points.

Suggested Citation

  • Hongwei Dong, 2018. "The impact of income inequality on rental affordability: An empirical study in large American metropolitan areas," Urban Studies, Urban Studies Journal Limited, vol. 55(10), pages 2106-2122, August.
    • Handle: RePEc:sae:urbstu:v:55:y:2018:i:10:p:2106-2122
    DOI: 10.1177/0042098017710380
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.1177/0042098017710380
    Download Restriction: no
    File URL: https://libkey.io/10.1177/0042098017710380?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Saiz, Albert, 2007. "Immigration and housing rents in American cities," Journal of Urban Economics, Elsevier, vol. 61(2), pages 345-371, March.
    2. Richard K. Green & Stephen Malpezzi & Stephen K. Mayo, 2005. "Metropolitan-Specific Estimates of the Price Elasticity of Supply of Housing, and Their Sources," American Economic Review, American Economic Association, vol. 95(2), pages 334-339, May.
    3. Elisabeth Arnold & Andrejs Skaburskis, 1989. "Measuring Ontario's increasing housing affordability problem," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 21(5), pages 501-515, October.
    4. John Landis & Kirk McClure, 2010. "Rethinking Federal Housing Policy," Journal of the American Planning Association, Taylor & Francis Journals, vol. 76(3), pages 319-348.
    5. John M. Quigley & Steven Raphael, 2004. "Is Housing Unaffordable? Why Isn't It More Affordable?," Journal of Economic Perspectives, American Economic Association, vol. 18(1), pages 191-214, Winter.
    6. Joseph Gyourko & Christopher Mayer & Todd Sinai, 2013. "Superstar Cities," American Economic Journal: Economic Policy, American Economic Association, vol. 5(4), pages 167-199, November.
    7. Amy S. Bogdon & Ayse Can, 1997. "Indicators of Local Housing Affordability: Comparative and Spatial Approaches," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 25(1), pages 43-80, March.
    8. Stephen Malpezzi & Richard K. Green, 1996. "What Has Happened to the Bottom of the US Housing Market?," Urban Studies, Urban Studies Journal Limited, vol. 33(10), pages 1807-1820, December.
    9. Thomas Piketty & Emmanuel Saez, 2006. "The Evolution of Top Incomes: A Historical and International Perspective," American Economic Review, American Economic Association, vol. 96(2), pages 200-205, May.
    10. Edward L. Glaeser & Joseph Gyourko & Raven E. Saks, 2005. "Why Have Housing Prices Gone Up?," American Economic Review, American Economic Association, vol. 95(2), pages 329-333, May.
    11. Edward Ludwig Glaeser & Joseph Gyourko, 2003. "The impact of building restrictions on housing affordability," Economic Policy Review, Federal Reserve Bank of New York, issue Jun, pages 21-39.
    12. Matlack, Janna L. & Vigdor, Jacob L., 2008. "Do rising tides lift all prices? Income inequality and housing affordability," Journal of Housing Economics, Elsevier, vol. 17(3), pages 212-224, September.
    13. Dietz, Robert D. & Haurin, Donald R., 2003. "The social and private micro-level consequences of homeownership," Journal of Urban Economics, Elsevier, vol. 54(3), pages 401-450, November.
    14. Leigh, Andrew, 2006. "Does equality lead to fraternity?," Economics Letters, Elsevier, vol. 93(1), pages 121-125, October.
    15. Glaeser, Edward L & Gyourko, Joseph & Saks, Raven, 2005. "Why Is Manhattan So Expensive? Regulation and the Rise in Housing Prices," Journal of Law and Economics, University of Chicago Press, vol. 48(2), pages 331-369, October.
    16. Paciorek, Andrew, 2013. "Supply constraints and housing market dynamics," Journal of Urban Economics, Elsevier, vol. 77(C), pages 11-26.
    17. Michael Stone, 2006. "What is housing affordability? The case for the residual income approach," Housing Policy Debate, Taylor & Francis Journals, vol. 17(1), pages 151-184.
    18. Ihlanfeldt, Keith R., 2007. "The effect of land use regulation on housing and land prices," Journal of Urban Economics, Elsevier, vol. 61(3), pages 420-435, May.
    19. Daphne Greenwood & Richard Holt, 2010. "Growth, Inequality and Negative Trickle Down," Journal of Economic Issues, Taylor & Francis Journals, vol. 44(2), pages 403-410.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Howard, Greg & Liebersohn, Jack, 2021. "Why is the rent so darn high? The role of growing demand to live in housing-supply-inelastic cities," Journal of Urban Economics, Elsevier, vol. 124(C).
    2. Gyourko, Joseph & Molloy, Raven, 2015. "Regulation and Housing Supply," Handbook of Regional and Urban Economics, in: Gilles Duranton & J. V. Henderson & William C. Strange (ed.), Handbook of Regional and Urban Economics, edition 1, volume 5, chapter 0, pages 1289-1337, Elsevier.
    3. Hongwei Dong & J Andy Hansz, 2019. "Zoning, density, and rising housing prices: A case study in Portland, Oregon," Urban Studies, Urban Studies Journal Limited, vol. 56(16), pages 3486-3503, December.
    4. Christian A. L. Hilber, 2017. "The Economic Implications of House Price Capitalization: A Synthesis," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 45(2), pages 301-339, April.
    5. Paciorek, Andrew, 2013. "Supply constraints and housing market dynamics," Journal of Urban Economics, Elsevier, vol. 77(C), pages 11-26.
    6. Christian A. L. Hilber & Wouter Vermeulen, 2016. "The Impact of Supply Constraints on House Prices in England," Economic Journal, Royal Economic Society, vol. 126(591), pages 358-405, March.
    7. Michael Manville & Michael Lens & Paavo Monkkonen, 2022. "Zoning and affordability: A reply to Rodríguez-Pose and Storper," Urban Studies, Urban Studies Journal Limited, vol. 59(1), pages 36-58, January.
    8. Hilber, Christian A. L. & Vermeulen, Wouter, 2012. "The impact of supply constraints on house prices in England," LSE Research Online Documents on Economics 59254, London School of Economics and Political Science, LSE Library.
    9. Molloy, Raven, 2020. "The effect of housing supply regulation on housing affordability: A review," Regional Science and Urban Economics, Elsevier, vol. 80(C).
    10. Darcy Rollins & Alicia Sasser & Robert Tannenwald & Bo Zhao, 2006. "The lack of affordable housing in New England: how big a problem?: why is it growing?: what are we doing about it?," New England Public Policy Center Working Paper 06-1, Federal Reserve Bank of Boston.
    11. Joseph Gyourko & Albert Saiz & Anita Summers, 2008. "A New Measure of the Local Regulatory Environment for Housing Markets: The Wharton Residential Land Use Regulatory Index," Urban Studies, Urban Studies Journal Limited, vol. 45(3), pages 693-729, March.
    12. Cai, Hongbin & Wang, Zhi & Zhang, Qinghua, 2017. "To build above the limit? Implementation of land use regulations in urban China," Journal of Urban Economics, Elsevier, vol. 98(C), pages 223-233.
    13. Arthur Grimes & Andrew Aitken, 2006. "Housing Supply and Price Adjustment," Working Papers 06_01, Motu Economic and Public Policy Research.
    14. Ritashree Chakrabarti & Junfu Zhang, 2010. "Unaffordable housing and local employment growth," New England Public Policy Center Working Paper 10-3, Federal Reserve Bank of Boston.
    15. Cheshire, Paul & Hilber, Christian A.L. & Koster, Hans R.A., 2018. "Empty homes, longer commutes: The unintended consequences of more restrictive local planning," Journal of Public Economics, Elsevier, vol. 158(C), pages 126-151.
    16. Raven S. Molloy & Charles G. Nathanson & Andrew D. Paciorek, 2020. "Housing Supply and Affordability: Evidence from Rents, Housing Consumption and Household Location," Finance and Economics Discussion Series 2020-044, Board of Governors of the Federal Reserve System (U.S.).
    17. Sharpe, Jamie, 2019. "Re-evaluating the impact of immigration on the U.S. rental housing market," Journal of Urban Economics, Elsevier, vol. 111(C), pages 14-34.
    18. Peter Neuteboom & Dirk Brounen, 2011. "Assessing the Accessibility of the Homeownership Market," Urban Studies, Urban Studies Journal Limited, vol. 48(11), pages 2231-2248, August.
    19. Liang, Wenquan & Lu, Ming & Zhang, Hang, 2016. "Housing prices raise wages: Estimating the unexpected effects of land supply regulation in China," Journal of Housing Economics, Elsevier, vol. 33(C), pages 70-81.
    20. Douglas J. Krupka & Kwame N. Donaldson, 2013. "Wages, Rents, And Heterogeneous Moving Costs," Economic Inquiry, Western Economic Association International, vol. 51(1), pages 844-864, January.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sae:urbstu:v:55:y:2018:i:10:p:2106-2122. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SAGE Publications (email available below). General contact details of provider: http://www.gla.ac.uk/departments/urbanstudiesjournal .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.