The Truth About the Affordable Housing Shortage in the US
A recent lottery for 55 affordable housing units in a New York City "poor door" high-rise at 40 Riverside Blvd (pictured) yielded a response from 88,000 people. "Poor door" means the building's lower-income homeowners will have a separate entrance from their market-rate neighbors. The overwhelming response, despite the controversy, shows there's a high demand for affordable housing, Julian Castro, secretary of the Department of Housing and Urban Development, tells MarketWatch. Unfortunately, the US is suffering from a shortage of affordable housing at a time when rents are rising faster than incomes can keep up. The culprit: Local regulations, says Zillow chief economist Stan Humphries. While areas like Houston have no zoning codes, expensive areas like San Francisco have strict building rules and parking minimums. These factors drive up fixed costs, creating more incentive for builders to construct more expensive housing. Urban Institute president Sarah Rosen Wartell says that two population trends will exacerbate the affordable housing issue: a growing Millennial market with members who are becoming homeowners later in life, and an aging population that needs accessibility to transit. Another problem is that lack of affordable housing leaves lower and middle income families with less ability to save. [MW]
