NCPA - National Center for Policy Analysis

Study Says Affordable Housing Shortage Is Growing

February 6, 2001

Middle-income Americans face a growing shortage of affordable housing, according to a study to be released today by the Mortgage Bankers Association of America and the National Housing Conference, a nonprofit affordable-housing advocacy organization.

The study's conclusion surprised some experts -- given recent evidence that for many, housing remains relatively affordable. In fact, the number of American families owning their own homes hit 71.6 million last year -- a record that amounted to nearly 68 percent of households.

  • According to the study, the number of families that make between 80 percent and 120 percent of their area median income and suffer from "critical housing needs" rose 74 percent to 691,000 between 1997 and 1999.
  • Of those families, about 437,000 owned their homes, while 254,000 were renters -- and the report said the problem seems to be growing much more quickly for renters.
  • The study found that about 1.3 million families in suburbs suffer from a lack of affordable housing, compared with 1.2 million in cities.
  • The authors of the report laid the blame on rents that are rising faster than inflation and insufficient construction of affordable units.

That may be due to tight labor markets in the home-building industry coupled with strict land-use controls, which have undermined builders' attempts to keep up with demand for new houses in some markets. In California's Los Angeles and Orange counties, for example, more than 278,000 new jobs were created between 1984 and 1997 -- but only 78,000 new homes were built.

Source: Patrick Barta, "More Middle-Income Families Are Facing Lack of Affordable Homes, Study Finds," Wall Street Journal, February 6, 2001.

For WSJ text


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