Increase in Rent of Dwelling Units from 1940 to 1950

Average rent paid by nonfarm tenants increased greatly from 1940 to 1950. This change is described by the respective censuses of housing. Increased consumption and increased price both played a part. This conclusion is based on evidence presented in this paper. It examines variation among places in increase in rent paid in relation to change in the quantity and quality of housing, change in the price of housing as measured by the rent component of the Consumer Price Index of the U. S. Bureau of Labor Statistics and by the importance of new construction entering the market in the late forties which was in large by measure free from rent control. The analysis presented in this paper indicates that the price of rental housing as measured by the price index was a highly significant factor explaining the change in average rent paid from 1940 to 1950. So also was change in stock. It was of two types: (1) units added by construction during the forties, and (2) change during the forties in the tenant stock of units in structures in existence in 1940. In addition, difference in the treatment of rent-free units in the two censuses had an important bearing on the rent change observed for rural nonfarm places. These factors account for a large part of the variation among places in the increase in rent paid between 1940 and 1950. The relationships observed indicate that the rent index was a fairly reliable measure of change in the monthly rent of dwellings of specified quality when allowance was made for the new-unit bias.