After 1970, people had to spend more on rent

(written by lawrence krubner, however indented passages are often quotes). You can contact lawrence at:, or follow me on Twitter.


From 1940 to 1960 across 20 large U.S. cities, rental housing’s price fell, renters’ incomes rose, rent’s share in household budgets fell, and, as expected, renters’ real housing consumption increased. From 1970 to 2010, rental housing’s price increased, renters’ incomes decreased, but, unexpectedly, renters’ real housing consumption increased. We find neither demographics nor housing supply factors account for the anomalous post-1970 increase in renters’ housing consumption. We conclude that after 1970 there was a nationwide increase in renters’ preferences for housing consumption. With incomes falling, renters increased housing consumption by decreasing consumption of other necessities including food, clothing, and transportation.

This is easily explained by racism and crime. By the late 1950s, the USA had signed trade deals that would send its textile industry to Asia. The textile industry was the largest employer of African Americans, outside of agriculture. As the cities lost their textile mills, and other forms of industry, a crime wave took hold. The crime wave intensified people’s need to live in particular neighborhoods. Whites were willing to pay more to live in non-black neighborhoods. Blacks were forced to pay more to escape the crime.

My understanding is that the crucial turning point was 1958, but perhaps that was only for particular cities.

Post external references

  1. 1