Housing Affordability and Child Well-Being

We test three hypotheses about the role of housing affordability in child cognitive achievement, behavior, and health. Using longitudinal data from the Panel Study of Income Dynamics, we apply both propensity-score matching and instrumental-variable modeling as identification strategies and test the sensitivity of results to omitted variable bias. The analysis reveals an inverted-U-shaped relation between the fraction of income devoted to housing and cognitive achievement. The inflection point at approximately 30% supports the long-standing rule-of-thumb definition of affordable housing. There is no evidence of affordability effects on behavior or health.     

Housing Affordability and Health: Evidence From New York City

It is generally understood that households make tradeoffs between housing costs and other living expenses. In this article, we examine the relationship between health-related outcomes and housing-induced financial burdens for renters in one of the most expensive cities in the world, New York, New York. Drawing from the Housing Vacancy Survey for 2011, a representative survey conducted by the U.S. Census Bureau of more than 16,000 households in New York City, we estimate the effect of housing cost burden on the overall health of renters and the extent to which they have postponed various types of medical services for financial reasons. Results show that higher out-of-pocket rent burdens are associated with worse self-reported health conditions and a higher likelihood to postpone medical services for financial reasons. This relationship is particularly strong for those households with severe rent burdens. In addition, housing cost burden is equally or more important than other physical housing characteristics in explaining the variation in self-reported general health status and health care postponement. These findings are robust across specifications with different degrees of household, unit/building, and neighborhood controls, and among longstanding and newer renters. Our findings point to the importance of considering health-related outcomes when designing housing policies, and that housing subsidies should target both renters' out-of-pocket costs and place-based repair and maintenance.     

Affordability After Subsidies: Understanding the Trajectories of Former Assisted Housing in Florida

Each year, thousands of units are lost from the assisted rental housing inventory through deterioration and default, subsidy expiration, and market-rate conversion. While a good deal of research and data collection has focused on identifying at-risk developments, less is known about what happens to former assisted developments after they exit income and rent restrictions. This article uses a survey of former assisted properties in Florida to identify their postsubsidy trajectories—that is, as to whether developments continue as rental housing, are converted to condominiums, or leave the housing stock through vacancy and demolition; and for those that continue as rental housing, whether they continue to offer affordable rents. Using logistic regression models, the article examines the property, housing market, and neighborhood characteristics that determine these trajectories. The results show that smaller properties, those that have been out of subsidy programs longer, and those in stronger neighborhood housing markets are more likely to be converted to condominiums. Among developments that continue as rental housing, those that previously had more stringent rent restrictions, those in strong rental submarkets, and those with better transit access tend to become unaffordable compared with previous rent limits.     

Shelter Poverty in Ohio: An Alternative Analysis of Rental Housing Affordability

ABSTRACT

In the United States, housing is most commonly considered unaffordable when a household spends more than 30% of income on housing and utilities. Although easy to calculate, it fails to account for how other categories of essential expenses affect income available to spend on housing. This article compares the ratio-based approach with shelter poverty, a measure that accounts for these elements, evaluating differences in results between the two methods among renters in Ohio. Shelter poverty identifies a higher rate of households in economic distress due to housing market conditions. Further, the average “affordability gap” is four times higher using the shelter poverty than with the 30% threshold. Relative to shelter poverty, the ratio method underestimates the unaffordability of rental housing in economically distressed areas, as measured by median household income, and modestly overestimates it in high-income areas.     

Searching for Affordability and Opportunity: A Framework for the Housing Choice Voucher Program

Abstract

Affordability, a key factor in the housing search process, becomes critical when locating rental housing in opportunity-rich areas. The Housing Choice Voucher (HCV) program accommodates low-income households searching for housing and encourages recipients to reside in low-poverty areas. Affordable neighborhoods that are accessible to public transportation are often found in distressed areas, and not all HCV recipients succeed in locating qualified housing. To address these challenges, a housing search framework is developed to assist HCV households in the housing search process. This framework builds on the methodology of the U.S. Department of Housing and Urban Development (HUD) for the Location Affordability Index and Affirmatively Furthering Fair Housing assessment tool by creating multivariate indices that incorporate housing supply, accessibility to opportunity, and neighborhood conditions. The framework serves as a foundation for an online housing search application for public housing authorities to further fair housing goals, HCV recipients to locate qualified housing units, and local governments to assess affordability and opportunity.     

Economic Prosperity and Housing Affordability in the United States: Lessons from the Booming 1990s

The United States is facing an acute shortage of reasonably priced housing with over 35% of households paying more than 30% of their income for housing costs in 2015. As the U.S. economy recovers from the Great Recession, will housing become less unaffordable as incomes rise and households could potentially pay a lower share of their income for housing costs? To see if this is likely, I examined the change in housing affordability in the 100 largest metropolitan statistical areas (MSAs) in the United States between 1990 and 2000, a period of exceptional economic prosperity. I used the percentage of housing cost-burdened households (those that pay more than 30% of their gross income on ownership or rental costs) as a measure of the availability of reasonably priced housing. I used discriminant analysis techniques to detect statistically significant differences in the percentage of cost-burdened households in the 100 MSAs based on a variety of factors. I found that despite the phenomenal economic prosperity of the 1990s, about 30% of households were cost-burdened both in 1990 and 2000. High MSA median income was correlated with a greater shortage of reasonably priced housing. Neither economic growth rate nor poverty rate nor population growth rate distinguished high-shortage MSAs from low-shortage ones. Large MSAs and MSAs in the West had greater shortages than other MSAs. Economic prosperity did not alleviate the problem of lack of reasonably priced housing in the past, and is not likely to do so in the near future. Planners and policy-makers need to enact new policies at local, regional, state, and federal levels to effectively address America’s chronic affordable housing shortage.     

Economic Elites and Support for Housing Affordability Policy: How a Housing-Health Belief Matters

Political Behavior - To investigate economic elites’ housing policy preferences and test the attitudinal, contextual, political, and economic conditions that drive support for affordable...     

Market Rental Housing Affordability and Rapid Transit Catchments: Application of a New Measure in Canada

Abstract

In high-income cities, the availability of affordable rental housing in locations served by fast and frequent public transportation enables low-income households access to more opportunities, including jobs, without the costs of owning and operating automobiles. This study operationalizes a residual income approach to identify market rental housing that is affordable to two household configurations (couples with children and couples without children) in two categories below the median income. The study is carried out on Canada’s least and most expensive major metropolitan housing markets, Montreal and Vancouver. In addition to spatially disaggregating the results into inside and outside rapid transit walking catchments, the results are spatially disaggregated into four zones (Urban Core, Inner City, Inner Suburbs, and Outer Suburbs). Implications of the uneven distribution of affordable rentals with respect to transit access are discussed.     

Evaluating the Concept of Location Affordability: Recent Data on the Relationship Between Transportation,Housing, and Urban Form

The concept of location affordability holds that housing affordability should be augmented to include transportation cost as a related and substantial household cost burden. The recent United States foreclosure crisis of 2006–2008 offers an opportunity to evaluate location affordability as a concept for policy and practice by investigating the relationship between transportation cost burdens and negative housing outcomes. This article contributes to the growing literature on location affordability and the recent crisis with an analysis of default and foreclosure data for 70 metropolitan areas. The analysis includes transportation and housing cost burdens and demographic data, as well as multidimensional measures of urban form. High rates of automobility are associated with increased foreclosure. The urban form variables yield mixed results, suggesting the relationship between urban sprawl and affordability is complex. However, across a range of specifications, high levels of development intensity are associated with increased foreclosure rates. The results have implications for both the housing and transportation sectors and lend support for the notion of location affordability.     

Addressing the Affordable Housing Crisis for Vulnerable Renters: Insights From Broward County on an Affordable Housing Acquisition Tool

South Florida is experiencing an affordable rental crisis that is especially burdensome on those most vulnerable in society, low-income households. Rapid urbanization has resulted in inequitable land-use patterns that are a barrier to housing for the poor. As a solution to the crisis, local housing agencies seek to expand their affordable housing stock for vulnerable renters in opportunity-rich neighborhoods, but there is no standard framework for identifying properties for acquisition. Broward County serves as a case study to develop a housing acquisition tool. Using a combination of spatial statistics and principal components analysis, neighborhoods in which housing agencies may consider acquiring property are identified through the creation of an affordability surface in ArcGIS. Affordability is overlain by an opportunity surface derived from neighborhood quality and accessibility rankings. The results identify neighborhoods in Broward County that are both affordable and opportunity-rich, to better serve the county's most vulnerable renters.     

The Geography of the Recent Housing Crisis: The Role of Urban Form

This study maps the geography of the recent housing crisis within and across American metropolitan areas, and evaluates how it is related to a series of spatial and socioeconomic variables at neighborhood and metropolitan levels. It finds that the spatial patterns of housing recessions vary widely by region. In general, fast-growing metropolitan areas in the Southwest and Florida experienced not only deeper but also longer housing recessions. In contrast, metropolitan areas in the South (except in Florida) saw shallower and shorter housing recessions. Metropolitan areas in the Midwest and Northeast had fewer price declines in the crisis, but their housing recessions tended to be longer. Housing recessions tend to be deeper and longer in larger metropolitan areas. Neighborhoods located closer to city centers experienced shallower and shorter recessions compared with those in fringe areas. Even after controlling for many other variables, automobile dependency is still a strong and positive predictor of housing recession depth and duration. The effects of other urban form variables, such as land-use density and mixed use, are mixed and vary by region. The significance of the effects of neighborhood demographic variables on recession depth is highly dependent on the inclusion of high-risk loan in the model, suggesting that predatory and high-risk lending is one major reason why lower income and minority neighborhoods were hit harder by the recent housing crisis. The effects of high-risk loan and neighborhood demographic variables on housing recession duration, however, are rather weak.     

An Approach to Measuring the Affordability of State Debt

Affordability is one important and widely accepted element of state and local debt policy. However, there is no well-established measure of affordability and no clear standard for making normative judgments about what amount of debt is affordable for a specific jurisdiction. This article suggests a six-step method for measuring affordability of state debt that provides a useful guideline for determining when a state may be entering a "danger zone" by having debt that exceeds norms of affordability.     

Not All Housing GSEs Are Alike: An Analysis of the Federal Home Loan Bank System and the Foreclosure Crisis

While the financial crisis of 2008 ultimately affected the range of U.S. financial institutions, it began with practices in home ownership finance. The Federal Home Loan Bank (FHLBank) System was the first instrumentality created by the U.S. government, in 1932, to sustain affordable home ownership finance. In this article, the authors ask what role, if any, the FHLBanks played in the subprime lending and securitization practices that precipitated the current crisis. The authors analyze publicly available FHLBank financial data in terms of a framework focused on the System's assets: advances; mortgage loans acquired from members; and investments, particularly in mortgage-backed-securities. They conclude that the FHLBanks did not contribute significantly to problematic practices. Nonetheless, they recommend consideration of three reforms to the FHLBanks to ensure a return to effective regulation and responsible, affordable home ownership finance.