Home affordability crisis

Extracted Attributes

• Impact on Economy

  Reduced consumer spending, increased employee turnover, hindering businesses' ability to attract and retain talent

• Proposed Solutions

  Increases in any housing supply (affordable or market-rate) improve affordability; addressing zoning and regulation; removing minimum limits on lot sizes or density; changing zoning to include multifamily or Accessory Dwelling Units (ADUs); public-private partnerships; Earned Income Tax Credit (EITC), housing vouchers

• Primary Cause (Podcast)

  Student loan debt

• Primary Causes (Web Search)

  Significant gap between affordable homes and those who need them; incomes not keeping pace with home prices and mortgage rates; decade of underbuilding following the Great Recession; surging demand from millennials; high mortgage rates and soaring rents; restrictive zoning and regulation; shortage of income

• Cost-Burdened Households (2021)

  Nearly one-third of U.S. households (over 42 million) spent more than 30% of income on housing costs

• Definition of Affordable Housing

  Housing deemed affordable to those with a household income at or below the median, as rated by national or local government by a recognized housing affordability index. It exists along a continuum from emergency homeless shelters to homeownership.

• Average Age of First-Time Homebuyer

  40 years old

• Shortage of Affordable Rental Homes (US)

  7.3 million rental homes (both affordable and available to low-income renters)

• Availability for Extremely Low-Income Renters

  34 affordable rental homes for every 100 extremely low-income renter households

Timeline

• Article 'The Affordable Housing Shortage: Considering the Problem, Causes and Solutions' published, concluding a shortage of income is largely behind the problem. (Source: Web Search Results)

  2002-09-01

• The global financial crisis contributed to high rent prices, affecting even middle-income earners. (Source: Web Search Results)

  2008

• A decade of underbuilding contributed to the housing affordability crisis. (Source: Web Search Results)

  Post-Great Recession

• Before the COVID-19 pandemic, 4.9 million fewer households were cost-burdened compared to 2021. (Source: Web Search Results)

  2019

• Nearly one-third of U.S. households (over 42 million) were cost-burdened, spending more than 30% of their income on housing costs. (Source: Web Search Results)

  2021

• Home prices rose significantly, and affordability reached crisis levels as incomes did not keep pace and mortgage rates soared. There has been a substantive increase in focus on developing more affordable housing by governments. (Source: Web Search Results)

  Recent years

Affordable housing

Affordable housing is housing which is deemed affordable to those with a household income at or below the median, as rated by the national government or a local government by a recognized housing affordability index. Most of the literature on affordable housing refers to mortgages and a number of forms that exist along a continuum – from emergency homeless shelters, to transitional housing, to non-market rental (also known as social or subsidized housing), to formal and informal rental, indigenous housing, and ending with affordable home ownership. Demand for affordable housing is generally associated with a decrease in housing affordability, such as rent increases, in addition to increased homelessness. Housing choice is a response to a complex set of economic, social, and psychological impulses. For example, some households may choose to spend more on housing because they feel they can afford to, while others may not have a choice. Increases in any housing supply (whether affordable housing or market-rate housing) leads to increased housing affordability across all segments of the housing markets.

Web Search Results

• Digging Out of the U.S. Housing Affordability Crisis

  Home prices rose significantly in recent years and affordability has reached crisis levels as incomes did not keep pace and mortage rates soared. Median wage growth, by contrast, kept pace with apartment rent growth over the last six years on net even while significantly trailing the cost to buy, supporting rental demand. Rentals play a critical role in providing access to affordable housing options. [...] Housing affordability in the U.S. has reached a crisis level and is dominating U.S. residential market dynamics. In this piece we explore how the situation developed over decades and worsened in recent years, along with solutions to dig out of the housing supply hole and the implications for investors in the U.S. residential sector. ### Key call 1: Homeownership is increasingly unaffordable, rentals are a solution [...] In our view, the affordability crisis is nearing a tipping point and efforts need to be renewed to address zoning and regulation that have historically limited supply. An increasing number of states and municipalities are taking actions such as removing minimum limits on lot sizes or density within single-family zones or changing the zoning to include multifamily or accessory dwelling units (ADUs).

• How local governments can address the housing affordability crisis

  These trends are attributed to a significant gap between affordable homes and those who need them. According to the National Low Income Housing Coalition, there is a significant shortage of affordable rental homes across the United States. With a deficit of 7.3 million rental homes that are both affordable and available to low-income renters, only 34 affordable rental homes are available for every 100 extremely low-income renter households, affecting every single state and metropolitan area. [...] Until this housing affordability crisis is addressed, housing costs will continue to be one of the most pressing policy issues for society. That is why more governments need to act to address this crisis, with the past few years seeing a substantive increase in focus on developing more affordable housing. As more cities and counties begin to rethink how to build better cities and communities for the future, housing policy and public-private partnerships should be integrated. [...] Across the country, communities are facing a housing affordability crisis, with housing development stagnating and home prices skyrocketing. Local governments are continuing to look for solutions to address the lack of supply and promote quality housing. By combining data-focused analysis, public policy, and public-private partnerships, better urban communities can be built.

• The Affordable Housing Shortage: Considering the Problem ...

  Many observers claim that we are in the midst of an "affordable housing shortage" or, even worse, an "affordable housing crisis." The primary concern is that too many households live in "unaffordable" rental units. We hope to clarify the current debate by first measuring the size of the problem, then diagnosing its underlying causes and, finally, discussing treatments that policymakers should consider. While our review is hardly exhaustive, we conclude that a shortage of income is largely [...] Those calling current conditions an affordable housing crisis rely on community or social standards to determine that a unit is "unaffordable" even when a household has the resources to live in it. This approach has been rightly criticized for several reasons, including its obvious subjective nature (see Appendix 1 of the working paper). Despite these reservations, we use the "30 percent of income" definition because it is the most frequently cited standard and one used by the U.S. Department [...] # The Affordable Housing Shortage: Considering the Problem, Causes and Solutions The author's data analysis concludes that a shortage of income is largely behind the housing affordability problem. September 1, 2002 ### Author Ron J. Feldman Assistant Vice President ### Article Highlights Income shortage causing unaffordable housing crisis Owner-occupied market remains affordable EITC, housing vouchers best cost-effective response

• The State of Housing in America | U.S. Chamber of Commerce

  This deficit, rooted in a decade of underbuilding following the Great Recession and surging demand from millennials entering prime home-buying years, has driven up prices and worsened affordability. High mortgage rates and soaring rents have further exacerbated the crisis, which now impacts the broader economy by reducing consumer spending, increasing employee turnover, and hindering businesses' ability to attract and retain talent. Addressing this shortage is essential for stabilizing the [...] In 2021, nearly one-third of U.S. households—over 42 million—were cost-burdened, meaning they spent more than 30% of their income on housing costs, according to the U.S. Census Bureau. This marks an increase of 4.9 million households since 2019, right before the COVID-19 pandemic. The substantial rise in rent and home prices, coupled with elevated mortgage rates, has dramatically outpaced income growth for most Americans, leaving millions unable to keep up.

• How to Solve the Housing Affordability Crisis | CityChangers.org

  These and other phenomena, such as the global financial crisis in 2008, have led to a point where too high rent prices are not just a matter of concern to low-income groups. Even middle-income earners, like bus drivers, nurses, and teachers, can no longer afford to live in cities. We have reached a point where our cities cannot even provide affordable housing to those who run it. [...] The housing market is in crisis. Demand is increasing, rents are soaring, and even middle-income earners are struggling to afford to live in cities. What is the root of this housing affordability crisis, and how can we solve it? Barbara Steenbergen from the International Union of Tenants provided us with answers to these questions. To understand the scale of the housing affordability crisis, let’s look at some facts first: [...] To solve the housing affordability crisis, a holistic approach is needed. That means focussing on both the supply and the demand side of the market, bringing social responsibility into the discussion, and properly implementing the right to housing. But even more importantly, to solve this crisis, we need to stand together and have faith that things can and will change.