A Constant Quartile Mismatch Indicator of Changing Rental Affordability in U.S. Metropolitan Areas, 2000 to 2016

This article proposes a new measure of rental affordability to estimate the growing mismatch between changes in rent and income. Quartiles defined in 2000 for each area are updated for inflation and then used to describe rent and income distributions in 2016, comparing the 50 largest metropolitan areas with census and American Community Survey (ACS) data. The features and advantages of this constant quartile mismatch (CQM) indicator are compared with alternative indicators of affordability, including excessive rent burden and low-income housing supply gap. Unlike the other indicators, rent and income changes are separately identified, which explains the curious anomaly that the San Francisco or Washington, D.C., areas have been measured more affordable than the national average. The mismatch indicator in contrast measures growing stress on renters at both the high and low ends of the distribution. Strong upward shifts in rents are unmatched by increases in incomes in the top quartile, whereas losses of rentals in the bottom quartile leave low-income renters with much less opportunity than they had before. The new method thus conveys how the affordability problems in the lower end of the housing market are linked to shifts in the upper quartile and directly to losses in the bottom quartile. This broader characterization of affordability could help build broader based support for solving housing problems.