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The Experience of OOH in the United States
Michael Hayes
Technical Workshop on Owner-Occupied HousingAstana, Kazakhstan
December 3, 2014
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Overview
Rental income of persons is similar in concept to corporate profits and proprietors’ income in that it measures the net income generated from the rental (actual or imputed) of property
Rental income of persons refers to the net income earned by landlords (including both actual landlords and owner-occupants) that are not sole proprietors, partnerships, or corporations
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Derivation
Rental income = gross revenue – current expenses
Gross revenue is revenue from gross rents plus revenue from other sources (such as interest receipts, current transfer receipts, and subsidies
Current expenses include mortgage interest payments, intermediate inputs, consumption of fixed capital (or depreciation), business transfer payments, and taxes on production
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Owner-Occupied Housing
Gross rental values of owner-occupied housing are imputed in the U.S. national accounts
This approach ensures that measures of GDP and national income are the same regardless of whether shelter is owned or rented
The imputation is derived using a rent-to-value ratio approach
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OOH Derivation
U.S. uses owner-equivalent rent approach
Imputation is the product of units, rents, and changes in quality
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Housing Units
Benchmarked to American Community Survey
Previously used the Decennial Census of Housing
Different definitions of vacant unit Seasonally occupied units Condominiums, townhouses,
timeshares
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Housing Units (continued)
Quarterly estimates from the Current Population Survey Housing Vacancy Survey
Removal Depreciation/consumption of fixed
capital Disasters’ impact on the capital stock
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Imputed Mean Rent
Rent-to-value ratio
Unpublished Census estimates Mid-point of available rent intervals
(12 or 8)
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Estimated Rent-to-Value Ratios
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Quality Adjustment
Owner- and tenant-occupied rent differential
Based on inflation-adjusted value of assets (CPI for residential rent)
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Estimated Rent-to-Value Ratios
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Intermediate Expenses
Mortgage interest Effective rate of interest
Maintenance and repair, insurance, taxes Other expensesAcquisition and (expected) disposal costs
(incorporated in 2013 to meet SNA guidelines) Expected ownership is twelve years Expenses moved to capital stock (impacting
CFC) Now recorded as Investment
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Source Data
Mostly Census surveys
Operating assumption of one household = one unit
Differing weighting schemes across Census surveys Table showing results of different weighting
approaches Standardization in 2016 to the Housing Vacancy
Survey 13
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Household Surveys Used
Basic CPS – Monthly labor force survey with occasional supplements (e.g., fertility, school enrollment)
CPS/ASEC – Current Population Survey Annual Social and Economic Supplement Conducted over a 3-month period Produces key income and poverty data as well as household and
family estimates
CPS/HVS – Current Population Survey Housing Vacancy Survey Conducted each month with results based on quarterly averages
ACS – American Community Survey Conducted each month with results presented on an annual basis
AHS – American Housing Survey Conducted in odd-numbered years (2007, 2009, 2011)
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Comparison of Units, Housing–Based Versus Population-Based Weights
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Comparison of units derived from housing-based weights and population-based weights(Thousands of units)
2002 housing weights 2002 population weights
Total housing units 119,297 123,318
Occupied units 104,965 108,539
Vacant units 14,332 14,779
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Source Data (cont.)
Space rent Contract rent- utilities-consumer durables Consumer price index for residential rent
Intermediate expenses Challenging because some sources no longer
available Residential Finance Survey Survey on maintenance and repairs (SOARAR)
Gradual rise of private-sector databases Mortgage data (Black Knight) Automated valuation models (AVMs) resulting
from qualifying mortgage rule16