Wednesday, April 30, 2014

Mapping housing affordability, a grim picture for renters

by Janet Viveiros, Center for Housing Policy

As the housing affordability challenges facing renters in the aftermath of the Great Recession have gained attention recently, I found myself wondering just what the differences in housing affordability for owners and renters actually looks like nationwide.  I decided to map the data from Housing Landscape 2014 to see where low- and moderate-income owners and renters are struggling to afford their housing the most.

The map below shows that large shares of low- and moderate-income working homeowners struggle to afford their homes in high-cost housing markets. New Jersey leads the way with about three in 10 households spending at least half their income on housing, making them severely housing cost-burdened.

It can be easy to write off housing affordability problems as belonging solely to states with high-costs markets like California and New York, or states like Florida where many markets have not recovered from the foreclosure crisis. However, even when you look at states with the lowest shares of severely cost-burdened working homeowners, there are still significant portions of households that cannot afford their homes. In almost all states, the share of working owners who spend at least half their income on their homes is in the double digits.

The numbers are even worse for low- and moderate-income working renters. The map below shows that even in states in the Midwest and South that appear relatively affordable to working homeowners, many more working renters are struggling to afford their rental homes. 

It is striking that in many of the states with the smallest shares of severely cost burdened working owners, at least one in 5 working renter households spends at least half its income on housing. At seven percent, North Dakota has the lowest share of severely cost-burdened owners. Yet, more than double that share, 16 percent, of working renter households in North Dakota are severely cost burdened. Renters are having a difficult time affording their homes because rents have steadily risen as demand for rental housing has exceeded supply even in what appear to be relatively affordable places.

Regardless of whether a household is renting or owning, if it spends half of its income or more on rent and utilities, or on mortgage payments, insurance and taxes, it has little left over for other expenses like food, health care, and transportation. This can threaten the stability of a family or individual and negatively affect their health and prevent them from being economically self-sufficient. Therefore, we must continue to discuss ways to provide more affordable housing, particularly rental homes, in order to support the wellbeing of households across the country.

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