Millions of low- and moderate-income households struggle with housing costs that leave them with insufficient funds for essential needs such as food, transportation, and healthcare.
Many families are just one missed paycheck away from eviction or foreclosure. So, why are affordable homes so elusive? Here are four key reasons:
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- Stagnant Incomes vs. Rising Housing Costs Many workers earn too little to afford housing. For instance, a typical 2-bedroom apartment requires an hourly wage of $20.30 to be affordable, yet the Federal minimum wage stands at $7.25. Consequently, those earning minimum wage would need nearly three full-time jobs to cover the cost.
- For-Profit Developers’ Constraints For-profit developers struggle to meet the demand from lower-income households because the rents and home prices affordable to these families are too low to cover development costs. This makes it difficult to develop new housing or even maintain existing units for low-income renters.
- Regulatory Barriers Government regulations, such as limits on housing density and complex approval processes, increase production costs and reduce the overall housing supply. Surprisingly, restrictions on middle- and high-end housing can drive up rents for lower-income units, exacerbating affordability issues across the market.
- Insufficient Government Funding Federal, state, and local government programs are crucial for providing affordable housing, but funding has not kept pace with rising demand. Over the past 15 years, federal housing assistance has remained stagnant or declined, leaving many eligible households without the support they need.
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To address these issues, a reevaluation of housing regulations and increased government funding are essential. For more information on how to contribute to solutions, visit Local Housing Solutions.