How Much of Every Rental Dollar Goes Toward Operating Costs?

In light of the ever-rising costs of rental housing and affordability, the National Apartment Association (NAA) has released new data showing that on a national level, on average, 93 cents of every dollar spent on rent goes towards essential operational expenses which support local communities. 

The data by the NAA accounts for 37 states and the District of Columbia. 

"Just like every sector of the economy and countless American households, the rental housing industry has grappled with escalating costs in the face of record inflation," said Bob Pinnegar, NAA President and CEO. "Rental housing is a narrow margin industry that is often mischaracterized, but the data shows the truth – 93 cents of every rent dollar keep apartments running and support the local community. As we continue to contemplate housing affordability challenges, it is vital to keep these necessary expenses in mind." 

This research was derived from federally mortgaged properties, provided in part by Thirty Capital Performance Group, to expand and improve upon NAA's previous Dollar of Rent analysis. 

Amongst the top expenses is the property's mortgage which accounts for 46 cents. Further, 27 cents cover operating expenses like maintenance, insurance and utilities. And importantly, 11 cents go back into the local community through property taxes, funding schools, emergency services and other critical local needs. 

"Our research helps bridge the gap between data and informed policymaking," said Leah Cuffy, NAA Director of Advocacy Research. "A nuanced understanding of the dollar of rent can help avoid policies that inadvertently squeeze rental housing providers and, in turn, jeopardize their residents, employees and communities." 

Click here to view the NAA’s research in its entirety.