Rental Housing:

A National Problem That Needs Immediate Attention

CED-80-11: Published: Nov 8, 1979. Publicly Released: Nov 8, 1979.

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Although about 35 percent of American families live in rental housing, they are faced today with the Nation's lowest recorded rental housing vacancy rate and are finding it increasingly difficult to locate affordable rental units. The Department of Housing and Urban Development is the principal Federal agency responsible for administering programs designed to encourage the production or maintenance of multifamily rental housing. The Federal role has been primarily to assist in the financing of construction, purchase, or rehabilitation of rental housing, and to assist lower income families to obtain decent housing.

The primary factors responsible for the crisis are low levels of moderately priced new private construction, and losses of existing units through abandonments and conversions to condominiums. Other factors such as rapidly escalating operating costs, increasing age of existing rental stock, and the high costs involved in building new units are also having a detrimental effect. The proportion of multifamily rental construction starts which have been Federally subsidized has increased steadily from 22 percent in 1972 to about 44 percent in 1978, and an estimated 75 percent in 1979. Despite the increased dependence on the Federal Government to provide multifamily rental housing, the number of households in need of and qualified to obtain assistance far exceeds the number of subsidized units the Government is able to provide. The present rental vacancy rate of 5 percent is dangerously low because it interferes with the Nation's mobility possibilities. Furthermore, while renters have lower average incomes than homeowners, over 48 percent of all renters are paying more than 25 percent of their income for rent. There is limited potential for most renters to become homeowners due to the rapidly rising cost of buying and maintaining a house. The rental housing problem is so severe that it requires the immediate attention of, and action by, the Congress and the Administration.

Matter for Congressional Consideration

  1. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Matter: The Congress should establish a commission consisting of officials from Federal (both executive and legislative), State, and private organizations to: (1) develop alternative strategies to minimize the impact of the crisis which recognize, among other things, the preservation of existing stock as well as new construction of rental housing and identify incentives necessary for private industry to enlarge its role in the rental market; and (2) propose a national rental housing policy and plan of action to foster the availability and affordability of rental housing.

Recommendation for Executive Action

  1. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: The Director, Office of Management and Budget, should take the lead in developing executive branch alternatives and strategies which focus attention on the rental housing crisis. These alternatives and strategies should be presented to the commission for use in formulating a national rental housing policy.

    Agency Affected:


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