So why do housing affordability problems persist in many communities? There are a variety of reasons, including that housing affordability is determined by the relationship between a variety of factors including income, rent or mortgage payments, and energy costs.
Working families have seen only modest wage increases in recent years. In fact, after accounting for inflation, many families' incomes either remained flat or dropped while home values in many cities increased to unprecedented levels, even doubling in some metropolitan areas. Although prices have recently begun to decline, they haven't declined enough to be affordable to many working families.
With stagnant wages, the only housing option for many working families has been rental housing. And the Center for Housing Policy has demonstrated through their Paycheck to Paycheck research that in most markets, even rental housing is out of reach for families that depend upon workers in low-paying jobs. These families require ongoing subsidies such as those provided by the federal government through its various rental assistance programs. Unfortunately, available subsidies serve only about one-quarter of those in need -- a strong argument for continued and expanded federal funding for these programs.
Photo courtesy of Potterhill Homes