Residential Conversions

Julia Reade, Zhu Xiao Di

W00-5: The stock of residential units in the United States is constantly changing as units are added, demolished, or converted. This paper looks at the conversion of units: larger units split into smaller units; smaller units merged into larger units; and nonresidential facilities converted to residential uses. Using the Components of Inventory Change (CINCH) reports, it is estimated that about 170,000 housing units annually were adapted through conversions over the 1980 to 1993 period. Since splits and merges, as well as conversions to and from residential uses, largely offset each other, these activities have little impact nationally on the overall number of housing units, and therefore generally are not included in analyses of housing supply. However, they can influence the stock and availability of certain types of units in selected areas. Splits and merges typically occur in urban areas, and are concentrated in older structures in the Northeast. Conversions from nonresidential facilities most commonly occur in rural areas in the South. Conversions often are associated with changes in household composition, providing an affordable way of adapting homes. It is estimated that conversions generate about $2-3 billion a year in home improvement activity…