Strategies to produce moderately-priced housing are needed to address challenges
While the US housing market can be described to be on “sound footing” in 2018, challenges to housing that existed 30 years ago continue today, according to the Harvard Joint Center for Housing Studies.
“In many respects, the situation has worsened for both the lowest-income Americans and those higher up the income ladder,” said Chris Herbert, managing director of the center.
Since the center first released its State of the Nation’s Housing report in 1988, the US had added more than 40 million housing units and 27 million new households. Additionally, homeownership was at a rate of 63.9% in 2017, close to the 64% rate seen in the late 1980s.
Over the same period, however, there was a 14-million increase in the number of American households burdened by housing costs. The study also found that the number of households with student loan debt has nearly doubled and the gap between black and white homeownership has widened.
According to the center’s 2018 State of the Nation’s Housing report, the increase in cost-burdened households was partly driven by growing income inequality. Between 1988 and 2016, there was only a 3% increase in the real median income of households in the bottom quartile. Meanwhile, the median home price grew 41% faster than inflation between 1990 and 2016 and the median rent grew 20% faster.
As a result of the price and rent increases, together with a lack of subsidies for low-income households, almost one-third of all households totaling 38.1 million spent more than 30% of their incomes for housing in 2016.
The report called for expanded assistance to those excluded from the market to effectively address decades-old housing challenges. “We need strategies to help the private sector produce more moderately-priced housing,” Herbert said. “Doing so will require new approaches for making effective use of public funding, reducing construction costs, and easing regulatory barriers.”
