In simplest terms, we all want housing to be more affordable. But as we enter an intense election season and begin to grapple with the manner in which we present our policy cases, the question of what “affordable” means today is becoming increasingly difficult to answer.
When talking about housing, we have a growing array of phrases to choose from – affordable housing, low-income housing, subsidized housing, workforce housing, missing middle housing – the list goes on and on. It’s no secret that some of us disagree on which version of the truth best represents the need. That’s not even considering the equally crucial aspects of attainability, accessibility, and sustainability. Each of these terms addresses housing affordability with a distinct intent, yet they all represent the same core purpose of defining housing that can be acquired for a reasonable price.
Traditionally, affordable housing has been defined as costing 30% of a person’s income, a figure based on the idea that one week’s pay should cover one month’s rent. Before this standard in the 1940s, the maximum affordable rent for federally subsidized housing was set at 20%, then raised to 25% in 1969, before rising again to our accepted 30% in 1981.
However, that understanding has been gradually eroded over the decades as housing costs have risen and supply remains constrained, while incomes have not kept pace sufficiently to cover the many headwinds inflating housing prices. In 2022, record highs were reached with 22.4 million renter households and 19.7 million homeowners being cost-burdened, meaning they are spending over 30% of their income on housing expenses. Moreover, conversations of housing affordability are no longer limited to lower wage or hourly workers.
According to NHC’s Paycheck to Paycheck database, even those with high-paying occupations are finding housing unaffordable. Of all the occupations and MSAs we track, there are 3,926 instances of professions that make over $100k annually, and yet they cannot afford to purchase a typically priced home in their MSA with 3% down. That includes Lawyers, Pharmacists, Civil Engineers, Nurse Practitioners, Chemical Engineers, Electrical Engineers, Education Administrators, Computer Programmers, and others. Notably, this is not a phenomenon happening only in major urban areas. Bend-Redmond, OR; Missoula, MT; Bellingham, WA; Provo-Orem, UT; Flagstaff, AZ; and Idaho Falls, ID all appear somewhere on that same list.
When looking at rent, there are 1,237 instances where occupations earning more than $75,000 cannot afford the fair market rent of a two-bedroom apartment within their MSA. This issue arises in areas including Trenton, NJ; Bremerton-Silverdale, WA; Portland-South Portland, ME; Austin-Round Rock, TX; and Bridgeport-Stamford-Norwalk, CT.
Unsurprisingly, this growing problem has led to growing discourse. Poll after poll as of late has shown increasing concerns across the country. In 2024 alone, a slew of organizations spanning the political spectrum consistently reflect mounting concerns nationwide regarding housing affordability.
A survey from the National Association of Home Builders (NAHB) found that 77% of respondents reported a housing affordability crisis in their communities, and 80% said their city and county officials were not doing enough to encourage the production of affordable housing. Gallup reported that 21% of adults under age 50 say housing or rental costs are their top financial concern, with 38% of respondents reporting being very or moderately worried about their ability to pay their housing costs. The Institute of Politics at Harvard Kennedy School conducted a survey finding that housing is a major concern for young Americans, with 56% of respondents ranking it as more important than competing topics, falling only under healthcare and inflation. Pew reported in January that there is widespread support for policies that would allow construction of more affordable homes, showing consensus across states, regions, and urban versus rural areas. Redfin also reported that skyrocketing housing costs are a top issue for young voters, with 91% of Gen Z , 87% of millennials, and 83% of Gen X citing affordability as a key factor influencing their vote in the upcoming Presidential election.
Finally, NHC recently conducted a poll in partnership with the Bipartisan Policy Center and Morning Consult that found that 74% of respondents believe that the lack of affordable homes is a significant problem in the United States, and most respondents think that the federal government is mostly or somewhat responsible for ensuring that families have safe and decent housing they can afford.
This wild abundance of information represents a collective outcry from people across the country – affordable housing must be a priority both during and after the election. We should have been paying closer attention to housing affordability when it was focused on extremely low-, low-, and moderate-income families, but instead allowed ourselves to create a much deeper and more complex problem. Now, we must consider how to allocate resources to support families across the income spectrum who are struggling with housing costs. That means making difficult decisions about who is best served by assistance and how we can lift a larger number of people out of cost burdens, neither of which are easy questions to answer.
We are already wrestling with the idea of who affordable housing is actually affordable for, on both the lower income and higher income sides of the scale. The most successful housing production program, the Low-Income Housing Tax Credit, typically has to be paired with another program like Housing Choice Vouchers in order to be truly affordable for lower income households. At the same time, households who just miss the cutoff for the area median income (AMI) are priced out of assistance programs but remain economically vulnerable, leading some housing advocates to support policies that would expand qualification of programs to 100% AMI rather than capping at the typical 60%.
We cannot change the past, but we can reconsider how we think about affordable housing and how we define affordability for families today. An index from Zillow shows that the typical household purchasing a median-priced home with 10% downpayment should expect to be spending upwards of 40% of their income. A similar index from NAHB reports families must spend 38% of their income on mortgages. And a report Harvard’s Joint Center for Housing Studies shows that over half of renters are spending more than 30% of their income on housing. While our longstanding affordability goal should continue to be 30%, it’s evident that is no longer our reality. As we collectively aim to return inflation to 2%, there will hopefully be a corresponding reduction in housing cost burdens that brings us closer to achieving the 30% threshold for housing costs. But in the meantime, we cannot continue to wait to address housing affordability for this diversifying range of burdened households.
The longer we choose inaction, the more nuanced our affordability struggles will become, and the more challenging it will be to find solutions.