Affordable Housing Shortage

CQ Researcher

Can new policies increase supply?

Martha Simmons had hoped to buy the 1,375-square-foot house she has rented for 13 years in San Francisco’s Bayview district. But that dream now appears impossible.

Three years ago, Simmons offered her landlord $600,000 for the house and received a counteroffer of $900,000 — way too much for Simmons, who barely makes ends meet working three security jobs. The rent also has climbed out of reach for her, rising nearly 60 percent to $5,200 in three years.

“I finally told [the landlord] I can’t do this anymore,” says Simmons. She says she stopped paying rent in October to save for her next move, and the landlord is now taking steps to evict her.

Bayview was once among San Francisco’s most affordable areas. But that changed with the arrival of high-income workers who drove up demand for housing, outstripping the supply available for middle- and lower-income homebuyers. The median price of a Bayview home has jumped almost 10 percent over the past year, to $855,700.

Similar trends across the country have created what government officials and researchers say is a critical shortage of affordable housing.

Nearly half of renters spend more than 30 percent of their earnings on shelter.  And 10 percent of homeowners (7.6 million) and more than one-fourth of renters (11.1 million) spend at least half their income on shelter.

Wages are finally increasing after years of stagnation, but they are not keeping pace with rising home prices and rents, especially in heavily urbanized areas on the West and East coasts.

In the San Francisco Bay Area and Los Angeles, the average home now costs more than 10 times the average income, said Richard Florida, an American urban studies professor at the University of Toronto. Home prices in New York, Washington, Seattle, Denver, Miami and Portland, Ore., are more than five times the average income.

Nationally, median U.S. home values rose 6.5 percent between October 2016 and October 2017, according to Zillow, the online real estate database company.

Paul Bishop, vice president of research for the National Association of Realtors, the real estate industry’s trade association, says the gap between income growth and housing costs is widening, “You can see it nationally, but also almost in every area of the country,” he says.

Read more of the story here.

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