Newcomers Outpace New Housing in Least Affordable Rental Markets
In Los Angeles, where renters spend an average of 48.2 percent of their monthly income on rent, only 187 new housing units were added for every 1,000 new arrivals between 2012 and 2013. In New York, it was 383 per 1,000 newcomers, and in San Francisco, it was just 193.
The middle class increasingly feels the pinch, according to Christopher Herbert, managing director of Harvard University’s Joint Center for Housing Studies.
“Low-income people have always had trouble finding affordable housing, but now as rents have gone up, that’s true of middle-income people as well,” said Herbert, who cites income declines as a major culprit.
Rentals are most affordable in places with slow population growth, such as Pittsburgh and St. Louis, and areas that have met new growth with a steady supply of new housing units. Chicago, for example, permitted 906 new units for every 1,000 new residents between 2012 and 2013 — and renters there spend an average of 31.1 percent of their income on rent.
Cities are trying to address the problem: San Francisco’s mayor pledged 30,000 new and rehabilitated housing units by 2020. The Boston mayor’s office issued a report recommending 53,000 new units by 2030, and New York Mayor Bill de Blasio has vowed to create or preserve 200,000 affordable housing units over 10 years.
Although new units will help, Herbert said land prices are so high in New York, Los Angeles and other pricey markets that “it’s hard to build at a point that middle-income people can afford, let alone low-income people.”
Some cities are developing creative solutions, such as making it easier for homeowners to add “accessory” units — places for renters to live in garages, storage units and other underused spaces.
In the Bay Area, a nonprofit called SPUR is hosting an exhibit called “Urbanism From Within” that shows how accessory units work and how they preserve neighborhood identities.
Kristy Wang, SPUR’s community planning policy director, agreed that the middle class is facing challenges that it didn’t in the past.
That can be particularly tough, she said, because “it’s hard to make an argument that the government should subsidize middle-income households, but it’s also really important to have a middle class.”
Read more about this report at Zillow Research.
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