REFinBlog

Editor: David Reiss
Cornell Law School

March 4, 2014

Housing Affordability Challenges

By David Reiss

The Center for Housing Policy has issued a report, The Housing Affordability Challenges of America’s Working Households. It finds that

Overall, 15.6 percent of all U.S. households (18.1 million households) were severely housing cost burdened in 2012. Severely cost burdened households are those that spend more than half of their income on housing costs. Renter households are more than twice as likely to be housing cost burdened than owner households. In 2012, 24.7 percent of all renter households were severely burdened compared to 10.5 percent of all owner households. (1)

Unsurprisingly, “the nation’s lowest income households face the most severe challenges” as nearly “eight in ten extremely low-income working households, and over a third of very low-income working households, are severely housing cost burdened.” (3) The paper concludes that “unless housing production increases substantially — particularly in the highest cost markets — rents are going to continue to rise . . ..” (4)

This simple point — that there is not enough supply to meet demand is made time and again by scholars and policy analysts. But that simple truth bangs up against the arguments of those who oppose development for a variety of reasons:  because it can be an agent of localized gentrification, because it changes the fabric of communities, because it can benefit business interests.

There is some truth to all of these arguments and many people can make them in good faith. But one cannot be a proponent of affordable housing without supporting a meaningful increase in housing production. Here in NYC, the de Blasio Administration has appeared to embrace this fundamental truth. In many parts of the country, however, people claim to support affordable housing and strict limits on housing construction. Affordable housing advocates have to call them out on that contradiction as the two policies are in direct conflict with each other.

All the demand side subsidies in the world (like Section 8 vouchers) won’t get people into housing if the supply isn’t there in the first place.  Build it and working households will be sustainably housed. Don’t build it and they won’t be.

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