Tanvi Misra is a staff writer for CityLab covering immigrant communities, housing, economic inequality, and culture. She also authors Navigator, a weekly newsletter for urban explorers (subscribe here). Her work also appears in The Atlantic, NPR, and BBC.
Everyone’s favorite internet bulletin board can give researchers insights into regional trends.
Usually, I’m on Craigslist to scout for free pianos, bunkbed roomies, or you know, love. But housing researchers can use the Internet bulletin board for a more worthy purpose: as a source of fairly accurate, real-time data on the U.S. rental housing market.
A new paper in the Journal of Planning Education and Research analyzed 11 million Craigslist rental listings posted between May and July 2014 across the U.S. and found a treasure trove of information on regional and local housing trends. "Being able to track rental listings data from Craigslist is really useful for urban planners to take the pulse of [changing neighborhoods] much more quickly,” says Geoff Boeing, a researcher at University of California at Berkeley’s Urban Analytics Lab, who co-authored the paper with Paul Waddell, a Berkeley professor of planning and design.
Here are a couple of big takeaways from their deep dive down the CL rabbit hole:
Overall, Craigslist listings track with HUD data (except when they don’t)
The researchers compared median rents in different Craigslist domains (metropolitan areas, essentially) to the corresponding Housing and Urban Development median rents. In New Orleans and Oklahoma City, the posted and the official rents were very similar. But in other metros, they diverged significantly. In Las Vegas, for example, the Craigslist median rent was lower than the HUD median rent, but in New York, it was much, much higher.
“That’s important for local planners to be careful with because there are totally different cultures and ways that Craigslist is used in different cities,” Boeing explains. “The economies of the cities could very much affect how rentals are being posted. If they’re posting it higher [on Craigslist], they may negotiate down eventually. Or, if they’re posting it low, they could be expecting a bidding war with a bunch of tenants coming in.”
In general, however, the Craigslist median rents for apartments up to four bedrooms were within 10 percent of the official ones (in graph below). In other words, “correlations between the Craigslist and HUD median rents are positive, strong, and statistically significant,” Boeing writes on his website.
The most expensive cities on Craigslist? Your usual suspects.
“Craigslist conforms to our geographic expectations of the U.S. housing market,” Boeing writes. Cities like New York, San Francisco, and Boston rank among the cities with the highest median rent in the country (in bar graph below)—way higher than the national median. Wait, what’s North Dakota doing at number two? As my colleague Mark Byrnes wrote in 2014, the oil boom attracted large numbers of workers and drove rents up.
The researchers also analyzed the proportion of listings below Fair Market Rent, the HUD-defined rent standard used in many housing assistance programs. Generally, this is the dollar amount of the rent for the 40th percentile of housing units in that area. On Craigslist, around 37 percent of rentals cost less than this amount, which is “quite close to the expected value,” Boeing writes. But regional differences were dramatic. In Phoenix and Las Vegas, over two-thirds of Craigslist listings are below this threshold. (Keep in mind that in Las Vegas, Craigslist rents skew lower than HUD rents.) In New York and Boston, it was less than 10 percent. That speaks to the dearth of affordable housing in these markets, for one. It also raises concerns about the effectiveness of Fair Market Rent, which is based on five-year averages, and therefore don’t keep pace with the rapidly rising rents in some places.
Not a lot of choice in weaker markets
In weak housing markets like Detroit, Craigslist rents were more “compressed,” meaning that the majority of listings were concentrated within a slim range of values. But in expensive cities like San Francisco, listings were much more spread out across the rent spectrum, so housing seekers have less choice at any given price point.
This has significant implications for the efficacy of housing voucher programs, Boeing explains:
Metropolitan fair market rent based housing vouchers–designed to unlock neighborhoods of opportunity to the poor–may work differently in high-cost versus low-cost areas. Wide variations in rents within a city might make it very difficult for voucher holders to “move the needle” and upgrade neighborhoods in a statistically dispersed market like San Francisco’s, especially when considering household size.
He adds :
Fair market rents might be insufficient for households trying to upgrade neighborhoods in metros with highly dispersed rents; they also appear to limit housing seekers in New York and Boston (among others) to very narrow slices of available housing units.
A housing market analysis based on Craigslist listings has some obvious limitations. It’s based on posted rents, which can be different from what people actually end up paying. And there’s also a selection bias in the dataset. Craigslist posters have the money to be digitally connected, the technological literacy to know how Craigslist works, and the ability to write English. In other words, “Craigslist is not representative of the entire housing market,” in the U.S., Boeing emphasizes. What it is, however, is a source of “far fresher and finer-grained” information to get a quick and dirty feel of rental markets across the U.S.