Housing Affordability Still a Problem, Despite Price Drops

Housing has gotten increasingly difficult to afford in recent years, according to a report by the Center for Housing Policy, and cutting federal support would only exacerbate the problem.

Housing prices might have taken a dive since the bubble days of the mid-2000s, but that doesn’t mean that housing affordability is any less of an issue. According to the Center for Housing Policy, the research affiliate of the National Housing Conference, housing affordability has significantly decreased for working renters and owners in recent years.

That’s the conclusion of a report by the organization, “Housing Landscape 2011,” which was released this week. According to the report, 10.5 million working–not unemployed–households nationwide experienced a “severe housing cost burden” in 2009, meaning that they spent more than half of their income on housing costs. That’s an increase of nearly 600,000 households in such straits from 2008, despite a drop of 1.1 million in the overall number of working households.

The report details that housing affordability declined substantially for working renters across the country. About one-fourth of them (24.5 percent) had a severe housing cost burden in 2009, up from 22.1 percent with this problem in 2008. Housing affordability declined among homeowners as well.  Some 21.2 percent of working homeowners had a severe housing cost burden in 2009, as compared with 20.1 percent in 2008, according to “Housing Landscape 2011.”

While severe housing cost burdens affect working households across the income spectrum examined in the report–which was up to 120 percent of the local area median income–such problems are, as one might expect, most prevalent among the households with the lowest incomes. Four out of five working households with extremely low incomes (below 30 percent of the local area median) had a severe housing cost burden in 2009. Roughly 71 percent of working households with a severe housing cost burden in 2009 earned 50 percent or less of the area median income.

The report also describes the affordability situation in regional terms. The share of working households with a severe housing cost burden increased significantly in 16 of the largest U.S. metropolitan areas, decreasing significantly in none. Of these 16 metro areas, 14 are located in the Midwest and the South.  Overall, the level of severe housing cost burden among working households displayed a high level of variation at the metro level, ranging from a high of 42 percent in Miami-Fort Lauderdale-Pompano Beach to a low of 15 percent in Pittsburgh and Louisville.

“As this report shows, federal support for affordable housing programs has grown more important in recent years,” Keith Wardrip, senior research associate at the Center for Housing Policy, tells MHN. “Cutting funding for important programs such as public housing, the Community Development Block Grant program, and the HOME program, as has been suggested in recent weeks, would only put more working families at risk of living in unaffordable, inadequate conditions.”

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