Decomposing Housing Unaffordability
A US household is considered ‘rent burdened’ when its rent exceeds 30% of its income. This simple ratio can be decomposed to better understand the sources of unaffordability across space. To demonstrate this new approach, I rewrite the equation for rent burden as a sum of four factors: rent...
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| Main Author: | |
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| Format: | Article |
| Language: | English |
| Published: |
Institute of Sociology of the Czech Academy of Sciences
2021-06-01
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| Series: | Critical Housing Analysis |
| Online Access: | http://www.housing-critical.com/home-page-1/decomposing-housing-unaffordability |
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| Summary: | A US household is considered ‘rent burdened’ when its rent exceeds 30% of its income. This simple ratio can be decomposed to better understand the sources of unaffordability across space. To demonstrate this new approach, I rewrite the equation for rent burden as a sum of four factors: rent gap, income gap, excess size cost, and demographic baseline, and show that US rental unaffordability is mostly the result of low incomes. Focusing on the New England region, however, I show that high rent is the primary cause of unaffordability in high-cost, high-wage metro areas. This decomposition can help affordability advocates prioritise strategies appropriately across space. |
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| ISSN: | 2336-2839 |