As a professional planner, I am concerned with many issues surrounding land use, development, and housing. This morning I heard a program on NPR (The Diane Rehm Show, for those who might be interested) where the current status of housing in the United States was discussed. While the economy appears to be on the mend, and the housing market has stabilized significantly since 2007-2009, there remain real and persistent concerns with access to adequate, affordable housing.
Part of the problem is regional in nature. "Affordable" means different things in different places. What the government usually uses to determine what is "affordable" relates to the average cost of housing compared to average income. The percentage typically used is 33%, or 1/3, of one's income is to be utilized for housing costs. So if you earned (take home) $3000 per month, the threshold for afford of what you could feasibly pay is $1000. Anything more than that is considered not affordable. Regionally, the expense of living where the jobs are does not keep pace with what the costs of living tend to be. You could live in the sticks, for example, but there are no jobs there.
Part of the problem continues to be a persistence in income inequality. People's wages simply aren't raising at the same rate of people's housing costs, or even with the way the economy has expanded. As the disparity in income continues, those people who can afford a home is decreasing.
Further exacerbating the problem is the influx of investment capital, which drives an overall increase of housing values, but does not lead necessarily to occupancy. House-flipping was a significant contributor to the housing bubble in the first place, because artificially inflated housing costs are not only unsustainable, but they have a chilling effect on those who might otherwise be able to get into a place that is affordable. Additionally, the real issues of gentrification and inflated taxes make it difficult for folks to get into a home.
Rents are not cheap. Buying a home can be an insurmountable task. And for those on limited incomes, the challenges are real and persistent.
What to do?
Income disparity needs to be addressed. If we had wages commensurate with regional standards the benefits would be immediate and dramatic, which would help people buy homes, which would help stabilize the market further.
Rent controls could also be looked at to ensure that folks have access to decent, affordable housing.
And incentives could be made for banks to fund smaller, more affordable places rather than the large, expensive homes to well-heeled buyers.
Just my $0.02 for a Thursday morning.
Part of the problem is regional in nature. "Affordable" means different things in different places. What the government usually uses to determine what is "affordable" relates to the average cost of housing compared to average income. The percentage typically used is 33%, or 1/3, of one's income is to be utilized for housing costs. So if you earned (take home) $3000 per month, the threshold for afford of what you could feasibly pay is $1000. Anything more than that is considered not affordable. Regionally, the expense of living where the jobs are does not keep pace with what the costs of living tend to be. You could live in the sticks, for example, but there are no jobs there.
Part of the problem continues to be a persistence in income inequality. People's wages simply aren't raising at the same rate of people's housing costs, or even with the way the economy has expanded. As the disparity in income continues, those people who can afford a home is decreasing.
Further exacerbating the problem is the influx of investment capital, which drives an overall increase of housing values, but does not lead necessarily to occupancy. House-flipping was a significant contributor to the housing bubble in the first place, because artificially inflated housing costs are not only unsustainable, but they have a chilling effect on those who might otherwise be able to get into a place that is affordable. Additionally, the real issues of gentrification and inflated taxes make it difficult for folks to get into a home.
Rents are not cheap. Buying a home can be an insurmountable task. And for those on limited incomes, the challenges are real and persistent.
What to do?
Income disparity needs to be addressed. If we had wages commensurate with regional standards the benefits would be immediate and dramatic, which would help people buy homes, which would help stabilize the market further.
Rent controls could also be looked at to ensure that folks have access to decent, affordable housing.
And incentives could be made for banks to fund smaller, more affordable places rather than the large, expensive homes to well-heeled buyers.
Just my $0.02 for a Thursday morning.
Comments