Affordability and Accessibility are Significant Causes Housing Poverty
On June 16, the Joint Center for Housing Studies (JCHS) at Harvard University released The State of the Nation’s Housing 2017, its annual assessment of the housing market, demographic trends and housing challenges including an increase of housing poverty among U.S. households.
The report highlights continued affordability challenges, increased segregation by income, and the concentration of new additions to the rental multifamily supply at the upper end of the market, among other findings.
Housing poverty is increasing, particularly outside of dense urban areas and affordability and accessibility are significant concerns.
- U.S. house prices rose 5.6 percent in 2016, finally surpassing the high reached nearly a decade earlier.
- But the number of households earning less than $15,000 grew by roughly 37 percent between 2000 and 2016.
- The number of households earning $150,000 or more is up by 37 percent.
- The number of household in middle income groups saw a rise to just 16 percent.
- Middle-income households are disappearing, this can have a serious impact for the financial security of millions of lower-income households.
“While the recovery in home prices reflects a welcome pickup in demand, it is also being driven by very tight supply,” says Chris Herbert, the Center’s managing director. Even after seven straight years of construction growth, the US added less new housing over the last decade than in any other ten-year period going back to at least the 1970s. The rebound in single-family construction has been particularly weak. According to Herbert, “Any excess housing that may have been built during the boom years has been absorbed, and a stronger supply response is going to be needed to keep pace with demand—particularly for moderately priced homes.”
With the rising incomes and prices of homes, inequality is rising as well. Many low-income households are unable to afford housing. It becomes a challenge to having an afford home. Majority of low-income people are renters. The rental market across the country is extremely tight. The vacancy rate fell for the seventh straight year in 2016, dipping to 6.9 percent—its lowest level in more than three decades. The limited options for low-income families are shrinking.
According to the Harvard Study, “21 million renter households were cost-burdened (paying more than 30 percent of their income on housing) and 11.1 million renter households were severely cost-burdened (paying more than 50 percent of their income on housing) in 2015.”
In addition to facing growing income inequality, neighborhoods are becoming more segregated economically. There has been an increase of about 33.8 million to 47.7 million people living below the federal poverty, in the last 10 years. A growing concern of the inaccessibility of affordable homes to low and moderate-income households.