Constant Quality Rent Indexes for Affordable Housing

Jack Goodman

W05-4: This paper develops and applies a method for producing constant quality rent indexes and inflation estimates for different segments of the rental housing stock. In each of the five contrasting metropolitan areas, rent inflation since the late 1980s is found to have varied by market segment. In some metro areas, rental prices have risen most rapidly in the bottom third of the rent distribution, while in other metro areas rental price increases have been greatest in the top third of the rent distribution. The proportion of rent increase attributable to price change, and the estimated annual increase in housing quality, vary by metro area and, within metro areas, by market segment…