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Market-Based Solutions to Vital Economic Issues
Research
Jul 1, 2020

Is America’s Housing Affordability Problem a Housing Problem?

Abstract

We document what fraction of the housing stock in US cities is affordable to different family types. Rather than looking at what fraction of their income people actually pay in rent in each city, which reflects a mix of households’ ability to pay and supply conditions, we look at the extent to which the housing stock is affordable using discrete housing expenditure share cutoffs and the distribution of rents in the American Community Survey from each city. We find that housing affordability is largely a problem for single-parent families and, to a lesser extent, single-person households. The vast majority of the housing stock in most US cities is affordable to two-parent households. Several of the least affordable cities by our metrics are not glamour cities in the US Northeast, California, or South Florida but rather cities with both low incomes and low rents. Even building housing at construction cost with no land value, is unlikely to seriously alleviate housing affordability concerns for single-parent households in many cities


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