Contract rent plus the estimated average monthly cost of utilities (water, electricity, gas) and fuels (oil, coal, kerosene, wood, etc.)to the extent that these are paid for by the renter (or paid for by a relative, welfare agency, or friend) in addition to the rent. Gross rent is calculated for "specified renter-occupied" housing units, which excludes one-family houses on 10 acres or mops. Gross rent is sometimes preferred to contract rent in comparing costs since contract rent may or may not include utilities.
While public-use microdata show gross rent in dollar amounts (up to $l, 000), the data are not that precise. One reason is that the basic component, contract rent, is reported by the respondent in terms of intervals. To calculate gross rent, the respondent report is converted to a dollar amount by taking the midpoint of the interval; for example, $55 is used for the interval "$50 to $59" ($35 is taken as the value for "less than $50"; $550 is taken as the value for "$500 or more"). To that figure is added the reported average monthly cost of electricity and gas, and one-twelfth of the reported yearly cost of water and fuels. Gross rent data are typically tabulated in the same intervals as are used for contract rent. A unit classified as "no cash rent" in contract rent is also classified that way in gross rent, even if the unit's occupants pay for utilities themselves. Gross rent is calculated on a sample basis.
Gross rent as a percentage of income
The ratio of gross rent to household income in 1979, converted to percentage form, reported for "specified renter-occupied" units, which excludes one-family homes on 10 acres or more. Data are reported as medians and in terms of the number of units in categories such as "less than 20 percent, "20 to 24 percent," "25 to 34 percent," and "35 percent or more" ', and these figures are typically cross-classified with household income. No-cash-rent units and units occupied by households reporting no income or a net loss are assigned to a "not computed" category. This item was computed on a sample basis.
In addition to the effect of using interval midpoints, noted above, gross rent data are affected by the tendency of respondents to overstate utility costs.
Gross rent data have been derived since 1940. In 1970, gross rent figures were somewhat more precise since exact dollar figures were available for contract rent. Also, in reporting a rent-to-income relationship, gross rent was computed as a percentage of family or primary individual income, not household income.
See also: "Energy Costs, Monthly Residential;" "Rent, Contract".