- The National Housing Conference released its 2015 “Paycheck to Paycheck” report, which reports how the gap between housing and wages has increased.
- The National Bureau of Economic Research released a working paper, Housing Booms and Busts, Labor Market Opportunities, and College Attendance, which reports a correlation between the state of the housing market and college attendance.
- CoreLogic released its August 2015 National Foreclosure Report, showing that, since August 2014, there has been a decrease in the amount of foreclosures.
- Center on Budget and Policy Priorities released “How Housing Vouchers Can Help California’s Rental Crisis”.
Tag Archives: NHC
Millennials, Paycheck to Paycheck
The National Housing Conference and the Center for Housing Policy issued a report, Paycheck to Paycheck: A Snapshot of Housing Affordability for Millennial Workers. The report opens,
Public perception of millennials tends to paint a picture of highly educated hipsters living in city micro-units, or perpetual youth living in their parents’ basements. However, those stereotypes do not adequately portray the diversity of race, education, income, family types, living arrangements and employment among millennials.
In fact, most millennials do not live in micro-units or with their parents. Many are getting married and starting families. Even though millennials are more highly educated than previous generations, many face limited job prospects. And many millennial workers are in relatively low-paying jobs and have difficulty finding housing they can afford. As a result, they spend a burdensome share of their paycheck on housing, leaving little for other expenses, including student debt payments, savings for a mortgage down payment and childcare. (1)
The report makes a variety of conservative assumptions. For instance, it assumes that a loan to value ratio of 28% of income and it assumes that households have only one worker. It proposes a variety of policies to expand mortgage credit, affordable housing subsidies and zoning reforms to increase the supply of housing.
Given that the report comes from two affordable housing advocacy groups, its policy proposals to increase the supply of affordable housing for millenials are not surprising. But I do think it is worth thinking about household formation a bit more in this context.
Many of us do not give much thought to how households form. When we think about our own experience, we might conclude that when we had enough money to get our own place we did just that. But, in fact, the rate of household formation is significantly affected by broader economic forces, namely the state of the job market. If an individual does not believe that her income is stable, she will delay creating her own household. Thus, she might live with her parents or share an apartment with others. Reports like this one assume that there is a natural rate of household formation just as many people assume that there is a natural rate of homeownership. As a general rule, those people generally assume that higher is better.
It might be worth considering that household formation and homeownership rates are driven by the interplay of much larger forces. Instead of trying to move those rates for their own sake, it might be more important to look at fundamentals in the economy, like the unemployment rate and wage growth, and let household formation and homeownership rates take care of themselves.
Friday’s Government Reports Roundup
- The National Low Income Housing Coalition (NLIHC) releases report on differences between the National Housing Trust Fund (NHTF) and HOME Investment Partnerships Program. It found that the NHTF is more targeted to low-income renter households than HOME.
- The US Department of the Treasury’s Community Development Financial Institutions Fund (CDFI) evaluated New Markets Tax Credit (NMTC), which “enables economically distressed communities to leverage private investment capital by providing investors with a federal tax credit.”
- The Center for Housing Policy at the National Housing Conference released report, Affordable Housing’s Place in Medicaid Reform: Opportunities Created by the Affordable Care Act and Medicaid Reform.
- The Center for Housing Policy and Children’s HealthWatch released report, The Timing and Duration Effects of Homelessness on Children’s Health.
- The Offices of the Inspector General released report, Coordination of Responsibilities Among the Consumer Financial Protection Bureau and the Prudential Regulators—Limited Scope Review.
- HUD released a report making changes to the Rental Assistance Demonstration (RAD).
Friday’s Government Reports Roundup
- CFPB releases its 2014 Fair Lending Report, discussing its fair lending acts over the past year. It shows that the CFPB required institutions to provide over $224 million in remediation in 2014.
- A S. Census Bureau paper examines the effects of foreclosures on families during the financial crisis and in the years following.
- The Center for Housing Policy released a report “Impacts of Affordable Housing on Health: A Research Summary,” which discusses how Affordable Housing is correlated to better health than unaffordable, unstable and poor quality housing.
- The National Housing Conference released report: “Broadband Connectivity in Affordable Housing,” which highlights the need for internet access in affordable housing.
- HUD released the “2015 Worst Case Housing Needs” report.