Very low-income residents in the 10 fastest growing metros can’t afford a home
The number of affordable housing units in the fastest-growing cities across the US declined from 2010 to 2017, according to new research from Freddie Mac Multifamily.
The 10 fastest growing metros saw the number of units affordable to very low-income residents dropped by over a third. These top 10 cities have an average population growth of more than 15%, compared to 5% population growth in the rest of the metros nationwide.
“Cities that have experienced aggressive population growth have struggled to build enough rental housing to meet the increased demand,” said Steve Guggenmos, who leads Freddie Mac Multifamily’s research and modeling team.
The report compared rental affordability against population data from the census, as well as mapped area median income data from the Federal Housing Finance Agency and unit-level rent data from the American Community Survey, to find a strong correlation between population growth and affordability loss.
“The findings are very convincing. If these two variables were in fact not related, the chance of observing a result this extreme is about one in 7 million,” said Guggenmos. “The data show that population growth is strongly correlated with affordability loss.”
Austin, Texas – where population boomed by 22.5% over the period studied – was the fastest-growing of the nation’s top 50 metro areas. However, loss in affordable housing units followed the growth. Multifamily housing in Austin increased in 2009, but a high percentage of new units were not affordable for very low-income renters.
A year after, the metro recovered and had a higher proportion of multifamily rental units affordable to very low-income households than the whole country at 66%. By 2017, the proportion plunged to 31.9%, seven percentage points below the national average.
“The problem continues to get worse, and every year more very low-income families are forced to spend more of their income on housing,” Guggenmos said. “That’s especially true where population growth is rapid. The old laws of supply and demand are showing their teeth and the people who can least afford it are getting bit.”
