Rent burden determinants in hot and cold housing markets of Davidson and Shelby counties, Tennessee

Abstract

Rent burden is a situation when a renter‐occupied household spends a sizable portion of its income on housing costs. Using census tracts as the scale of analysis, this article examines rent burden determinants in Shelby and Davidson counties, the two largest of Tennessee. These counties differ substantially in terms of their housing markets, demographics, and the state of their economy. Mapping reveals distinct spatial patterns of rent burden and its geographic extent. Correlations and spatial regression analyses suggest that in both counties, a lack of access to an automobile, crowded living, and the presence of children in households similarly associate with higher rent burden. In contrast, educational attainment, race, and a lack of medical insurance do not demonstrate such consensus. Compared to Davidson County, race is a less crucial predictor of rent burden in Shelby County, likely due to its predominantly African American composition across different income groups. Besides, the positive effect of education is more pronounced in Shelby County. Results indicate that rent burden tends to be more of a socioeconomic class issue in Shelby County, whereas it is not as strongly associated with the socially disadvantaged in Davidson County.

A typology of U.S. metropolises by rent burden and its major drivers

“…However, another issue stems from that—whether the agreed upon definition has empirical support. While some scholars (e.g., Newman & Holupka, 2014 ) provide empirical support for the 30-percent threshold, its usage was questioned and challenged by others (e.g., Bramley, 2012 ; Samarin & Sharma, 2021 ) as crossing the 30-percent threshold may be quite common in numerous unaffordable locations (see examples in Metcalf, 2018 ). An alternative perspective on housing affordability is the residual-income measure which highlights the interaction among incomes, housing costs, and the costs of non-housing necessities (see Stone, 2006 ).…”

“…Higher housing cost and rent burden provoke worse health outcomes, since burdened tenants very likely postpone or completely neglect their health needs due to financial strains. In this regard, Samarin and Sharma ( 2021 ) documented that in Shelby and Davidson counties (TN), a lack of medical insurance was a common feature of rent-burdened households.…”

“…Housing costs and transportation costs combined together may provide a better picture of affordability as some households may be forced into longer commutes to reduce housing costs, whereas others might tolerate higher rents to mitigate transportation costs (Gober et al, 1993 ). Additionally, parking fees in America are often included in rents (Gabbe & Pierce, 2017 ), which further exacerbates rent burden; however, many low-income households, especially in inner-city neighborhoods, do not necessarily own automobiles (Samarin & Sharma, 2021 ).…”

“…Higher income inequality aggravates unaffordability among low-income families because the presence of high-income groups inflates housing prices and simultaneously reduces low-cost options (Matlack & Vigdor, 2008 ). Finally, educational attainment, often used in studies concerning multiple other phenomena, is one of the major drivers of housing cost and rent burden (Lee & Ahn, 2013 ; Samarin & Sharma, 2021 ; Susin, 2007 ). Generally, higher educational attainments in a metropolis and the greater presence of more educated cohorts both increase housing prices, thus making rentals less affordable for low- and moderate-income groups.…”

“…Despite informative findings in this scholarship, the effect of regional economic specializations on rent burden has not been acknowledged. In two recent studies, however, rent burden was analyzed in contrasting locations—hot/cold housing markets (Samarin & Sharma, 2021 ) and growing/shrinking cities (Seymour, et al, 2020 ). Samarin and Sharma ( 2021 ) attributed the difference in rent burden determinants in the cold housing market of Memphis and the hot/tight housing market of Nashville to the varying labor market conditions and economic specializations.…”