This post is a companion piece to How Many US Households are Burdened by Unaffordable Housing and Where Do They Live?. To recap: housing is often considered unaffordable if it requires renters or homeowners to spend more than 30% of their income on housing costs. Housing wonks describe individuals who pay more than 30% of their income on housing as “cost-burdened”. Nationwide, most low-income, around a fifth of middle-income, and relatively few high-income US households are cost-burdened according to this definition. However, I’m not sure that paying more than 30% of one’s income on housing necessarily means one is suffering financial hardship. That 30% threshold came from the early 1960s when Americans spent almost a quarter of their monthly expenditures on food. Today we spend half as much on food, so shouldn’t we be able to spend more on housing? Spending no more than 30% of one’s income on housing may still be ideal for most low-income households but many better-off households could afford to pay more, especially households in the upper-half of the income distribution.
I’m still trying to figure out how generous the US social safety net should be. It’s one thing to say such-and-such is a right and quite another to determine who should get what and under what conditions, e.g., financial assistance for housing or childcare at some level of hardship. At the very least, more data is needed. For example, if the federal government wants to increase the availability of affordable housing and the effectiveness of housing assistance programs, it would help to know more about what distinguishes places with and without a sufficient supply of affordable housing, as well as the characteristics of households that are cost-burdened. Hence, the following tables and chart …
What the above table tells me is that housing affordably is not a big issue in several states. But it is clearly an issue in some metropolitan areas:
And housing affordability is definitely a problem for low-wage workers, even in low-cost states like Iowa:
Bottom line: housing affordability is not a national crisis - but there are still plenty of people suffering from a lack of affordable housing. Ok, that’s settled. The harder question is what to do about it.
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Reference:
Boeing, G. and P. Waddell. 2016. “New Insights into Rental Housing Markets across the United States: Web Scraping and Analyzing Craigslist Rental Listings.” Journal of Planning Education and Research. Online first. DOI: 10.1177/0739456X16664789 https://doi.org/10.1177/0739456X16664789