America’s housing affordability crisis, as explained by a housing policy analyst.

America's housing affordability crisis, as explained by a housing policy analyst.

America’s Housing Crisis: A Metropolitan Perspective

Housing Crisis

It’s an interesting time to be in the world of housing, to say the least. While some may interpret the current situation as a national housing crisis, Alex Armlovich, a housing expert, sees it as a metropolitan crisis. To gain a better understanding of this distinction, ANBLE reached out to Armlovich. In a recent conversation, he shed light on some important aspects of America’s housing crisis, its causes, and the effects it has on individuals and communities.

A Metropolitan Crisis

According to Armlovich, the housing crisis primarily affects metropolitan areas, where housing costs and prices are objectively high, making it difficult for even those with substantial market incomes to afford housing near good jobs. Armlovich advocates for considering a two-by-two model: areas with good weather and good jobs tend to have less affordable housing, while areas with cold weather and lower wage jobs generally have more affordable housing. Although it is possible to find cheap housing far away from amenities, the growing trend suggests that middle markets are becoming less of a refuge from affordability issues in the era of remote and hybrid work.

The Evolving Housing Crisis

The housing crisis in America has its roots in a shortage of supply, particularly near high-wage job markets and desirable locations. In the 19th century, urban areas faced overcrowding and inadequate living conditions. However, throughout the 20th century, cities managed to overcome this crisis by expanding and creating suburbs accessible through highway systems. Unfortunately, sentiment towards growth changed in the 1960s and 70s, leading to the restriction of multifamily housing and a significant decrease in new housing construction. This lack of new units, combined with job growth, led to skyrocketing prices and a shortage of affordable homes.

The Impact of the Pandemic

The pandemic further exacerbated the housing crisis. Remote work opportunities emerged, breaking the traditional tie between high-wage cities and individuals. As a result, people started moving to low-cost cities where demand for housing increased faster than the ability to produce new housing, leaving these areas in a state of flux. While remote work initially seemed like a potential solution to the affordability problem, it ended up nationalizing the crisis rather than solving it. The ultimate solution lies in building our way out, collectively addressing the housing shortage across the country.

The Role of Zoning

Zoning regulations have a significant impact on the housing crisis in America. Governments’ control over land use regulations dictates the number and types of housing units that can be built, influencing affordability. This local control leads to income segregation, as restrictions on housing supplies aim to keep low-income households away. However, these local supply limitations accumulate, resulting in regional or even statewide housing shortages. Addressing this issue requires state action to balance local control with the need to open up housing supplies.

The Effect of the Housing Crisis

The shortage of housing supply near high-wage job markets creates a bidding war over limited homes. This bidding process prices out the lowest bidders, driving them out of the market or potentially into homelessness. For instance, as job opportunities in New York increased by 1.2 million, only 400,000 homes were added over the past decade. Similar patterns were observed during the pandemic in the used car market, where limited supply led to an increase in prices. Ultimately, the housing crisis not only affects individuals’ financial well-being but also hampers overall economic growth.

Looking Ahead

The housing crisis was once seen as a problem confined to a few large cities. However, it has since spread across the country. Even cities like Atlanta, previously known for being business-friendly and growth-oriented, are now facing government restrictions on housing construction. This widespread crisis demands our attention and collective efforts to find sustainable solutions. While remote work was hoped to alleviate the problem, it has highlighted the need for nationwide commitment to address the housing crisis.

In conclusion, America’s housing crisis is not simply a national issue but a complex metropolitan problem. The shortage of affordable housing near high-wage jobs, fueled by restrictive zoning regulations, has led to skyrocketing prices, bidding wars, and income segregation. The pandemic has further exposed and magnified these issues, emphasizing the need for a collective response to ensure equitable access to housing for all. By addressing the root causes and implementing comprehensive solutions, we can work towards a future where affordable housing is accessible to every American.