Rental Housing: The Dinosaur of the 1980's?

This article appeared in the GAO Review, Vol. 15, Issue 15, Fall 1980. Millions of American families cannot afford to buy a house, and rental units are no longer available. New rental construction is down by 50 percent nationally since the early 1970's. Few privately-financed rental units are being built because of the high costs of construction, land, and financing, and because of insufficient rents. The age of the Nation's rental units contributes to their high operating costs as older units cost more to operate and maintain. The greatest relative activity in rental housing construction seems to be occurring in the sun belt, areas where construction, wages, and fuel costs are lower than the national average, garden apartments predominate, and rentals are $300 to 350 per month. The demand for rental housing is increasing because the millions born during the baby boom are reaching their 20's. In 1980, an estimated 155,000 rental units will be converted to condominiums. Landlords sell to converters for the higher prices they offer, to get out from under their investment, and to escape the risks of ownership. Renters find that buying a condominium provides income tax deductions, a chance to build equity, a chance to realize substantial appreciation of their property, a voice in how the building is operated, and a guaranteed monthly housing payment. Most housing experts describe the future housing market as having virtually no single-family detached homes for persons of average income. Units will be in massive projects and high-rise towers. With an ever increasing proportion of Americans in transition, the tight rental market will be a major annoyance; for the poor, it could be a matter of life and death.