CRF Blog

The affordable housing crisis, explained

by Bill Hayes

Curbed explains The affordable housing crisis.

Nearly two-thirds of renters nationwide say they can’t afford to buy a home, and saving for that down payment isn’t going to get easier anytime soon: Home prices are rising at twice the rate of wage growth. According to research from the advocacy group Home1, 11 million Americans (roughly the population of New York City and Chicago combined) spend more than half their paycheck on rent. Harvard researchers found that in 2016, nearly half of renters were cost-burdened (defined as spending 30 percent or more of their income on rent), compared with 20 percent in 1960.

The National Low Income Housing Coalition found that a renter working 40 hours a week and earning minimum wage can afford a two-bedroom apartment (i.e., not be cost-burdened) in exactly zero counties nationwide. In other words, it isn’t possible.

Even as the economy continues to grow and the housing market rebounds from the Great Recession, Americans face widening inequality, and, for many, an inability to comfortably pay for housing as wage growth stagnates and housing costs continue to climb.

The simple answer to the rent being “too damn high” is, of course, to build more housing. But the reality is significantly more complicated than simply jump-starting construction. A variety of market forces, policy decisions, and demographic changes have converged to make building affordable housing a difficult, and politically fraught, proposition. [more]