The Affordable Housing Crisis Could Be Alleviated By Adding 4.6M new apartments by 2030
Increasing inventory is an important contributor to improving the affordable housing crisis in the United States
Credit: weareapartments.org [/caption]The affordable housing crisis in the United States is a problem that transcends the rural-urban divide. From small towns to big expensive cities like New York City, to find an affordable-good place to live is not easy endeavor. Even though the housing crisis is triggered by different causes, the result of economic forces and a failure to build enough low-cost housing seems to be a contributing cause.
The current data on affordable housing, published by The Joint Center for Housing Studies, confirms that more than a quarter — 27 percent— of all renters are severely rent burdened. This means that they are spending more than half of their income on rent. If we look back at the past, in the 1960s, this number was around 12 percent.
“Nationwide, only 21 units are available per 100 extremely low-income renter households (those earning below 30 percent of the area median income) without government assistance. With assistance, it’s 46.” (CityLab report). On the other hand, the US Department of Housing and Urban Development (HUD) reports that “families who pay more than 30 percent of their income for housing are considered cost burdened and may have difficulty affording necessities such as food, clothing, transportation and medical care.” It is logical to think that prioritizing any of these other necessities over housing could then leave them at imminent risk for homelessness.
The study also mentions the following variables when referring to the need for more inventory as a key contributor to the affordability crisis:
- Apartment Household Growth
Population growth and a higher propensity to rent will create a need for more apartments by 2030
- Growth in Rentership
An aging population, immigration and fewer home purchases are increasing the need for apartments.
- Population Growth
As our population grows, this puts strain on the existing housing supply. A variety of housing options will be needed to meet diverse needs.
Solving the affordable housing crisis requires a multi–front effort, but a positive and proactive way to look at it is by adding more apartments. This is what the new study conducted by Hoyt Advisory Services, commissioned by two nonprofit industry groups, the National Multifamily Housing Council (NMHC) and National Apartment Association (NAA), concludes. The US must construct 4.6 million new apartments by 2030 to alleviate the housing crisis. In addition, research found that 51 percent of the current apartment stock was built before 1980, which means roughly 11.7 million additional units may need repairs.
How much effort will be needed and/or how fast can we go to meet the demand? While the need for more units impacts cities nationwide, high demand is expected to be happening in fast-growing cities including Raleigh, North Carolina (69.1 percent increase forecast), Orlando (56.7 percent), and Austin, (48.7 percent). In addition, large urban areas also need a sizable increase of new units, including the New York City metro area (278,634 additional apartments) Dallas-Ft. Worth, Texas (266,296 new units), and Houston, Texas (214,176 new units).
Overall, at least 328,000 new apartments should be constructed every year up from the industry’s yearly average (2011-2016) of 225,000 units – meaning almost 100,000 more apartments above the average.
AGORAFYAbout 65 percent of the units are from buyers, most of whom are native New Yorkers – plus many already live in the neighborhood. #NYC #21East12th https://goo.gl/ZupI5x
AGORAFYIncreasing inventory is an important contributor to improving the affordable housing crisis in the United States. #AffordableHousing #Apartments https://goo.gl/sYOHbj
AGORAFYWhile the rich park their cash in empty condos, creatives are being squeezed into different neighborhoods and cities. #Condos #Creatives https://goo.gl/mDrLU1