Housing Bubble
30 Percent Rise In Working Families That Spend Over Half Of Income On Housing
Today the National Housing Conference (NHC) announced a new study by its research subsidiary the Center for Housing Policy which found that in just two years there has been a dramatic 30 percent rise in the number of working families that spend more than half their income on housing. The study entitled America’s Working Families and the Housing Landscape reaffirms that working the equivalent of a full-time job does not guarantee American families a decent, affordable place to live. The analysis of Federal data from 1997 to 2001 also found that there has been more than a 60 percent rise in only four years in the number of working families with critical housing needs, that is, those families who pay more than half their income for housing, and, or, live in physically substandard housing. This problem affects both working homeowners and renters. Yet, in 2001 working families with critical housing needs were more likely to be homeowners than renters at 53 percent versus 47 percent. Working families are defined as low to moderate-income families that work the equivalent of a full-time job and earn between the minimum wage of $10,712 and up to 120 percent of the median income in their area.
In 1997 roughly 3 million low to moderate-income working families had critical housing needs. By 2001 this number had risen to 4.8 million, and represents a disturbing trend that has a profound impact on the economic and social wellbeing of the nation. Specifically, over the past two years housing has played an integral role in helping shore up an otherwise weakened economy. Although the homeownership rate is close to its all-time high, the growing number of owners who are now spending more than half of their incomes on housing threatens to undermine the significant progress that has been made recently in helping working families fulfill the American dream.
“Our research underscores the need to act now to increase the current supply of affordable housing across the nation. Many Americans are finding it increasingly difficult to purchase, maintain or rent decent, affordable housing, including those that hold vital community positions such as police officers, firefighters and teachers,” said Michael Pitchford,president of the National Housing Conference. “Affordable housing has become a priority for many communities across the nation as they continue to deal with economic development, congestion and the need to house their workforce. Although decision-makers at the federal and state levels continue to address this issue, working families do not often fit the stereotypes that surround housing policy.”
Despite the economic expansion between 1997 and 1999, the total number of American families with severe housing problems remained virtually unchanged at 13 million – a figure that includes non-working, marginally employed and working families. However, in 2001 approximately 14.4 million, or 1 in 7 Americans, had critical housing needs. Among working families, between 1997 and 2001 the number of homeowners with critical housing needs rose by about 64 percent, compared to a 55 percent increase for renters. Working families with critical housing needs also are found in both the cities and suburbs, and while housing needs continue to be highest in the Northeast and the West, they are growing most rapidly in the Midwest.
Formed in 1931, the National Housing Conference (NHC) is the nation’s oldest public policy and housing advocacy organization.
The Center for Housing Policy is the research affiliate of the National Housing Conference, and was created to enlighten the understanding of America's housing policies and programs and to enhance knowledge of those factors that will influence policy-making over the next five to ten years.
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