SAVI Reports | Page 25

Renting
In looking at housing affordability , it does not make sense to only look at the homeownership market ; more than 45 percent of the dwellers in Marion County ’ s occupied housing units are households who are renting .
There are several reasons why renting a place may make more sense for an individual or family than owning home ( e . g ., lower monthly costs , the time a householder plans to remain in that housing unit relative to transaction costs , and / or the willingness and ability of the householder to be responsible for maintenance of the unit ).
The idea of value maximization and the reduction of affordable units in the supply of available units spills into the rental market as well . If those who would prefer to be homeowners cannot access homeownership for any of a variety of reasons , additional pressure is placed upon the available stock of rental units , which reduces supply and drives up prices .
The dramatic national and local shift from homeownership to rentals in the wake of the 2007-09 recession has added additional pressure to the rental market . In Marion County , the share of all households renting increased 23 percent between 2005 and 2013 ( 38.1 and 47.1 percent of all households , respectively ) before data showed a shift back toward homeownership in 2014 .
This pressure in the rental market mirrors the value maximization concept of homeownership . Those of greater means often have access to pay the premium for the better located , higher amenity rental units ( even if they could afford to pay more ), and thereby reduce the number of units available to other renting families .
Challenges around assembling land and capital , the cost of construction in time and resources , and overcoming regulatory obstacles limit supply-side market responses and make it challenging to bring new units online to meet increased demand . Additionally , owners of rental units can adjust rents annually to adapt to changing market conditions , while it can take considerable time for the supply of units to be meaningfully increased .
In some areas , the rents that may be expected from a project may not be enough to satisfy debt service on the project without a subsidy , thereby making those projects infeasible . Even when new units are brought online , they are generally not affordable ; other units that are older , in less desirable locations , or with fewer amenities become affordable through the loss of their competitiveness relative to the new units ( a process known as filtering ).
As a result , households in the rental market may find their rents increasing and / or find themselves making trade-offs with regard to location , housing quality , proximity to employment centers , and access to amenities . This is especially true of the lowest of the low-income households that may no longer be able to find any rental properties that are affordable . Many lower-income families in Marion County end up facing the
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