Many Americans are spending a significant portion of their income on housing. High costs affect family savings and the general finances of an average household.
Business journalists can explore this issue by looking through different data and resources. Here’s where to start.
What is the latest data?
Harvard University’s Joint Center for Housing Studies released the 2019 State of the Nation’s Housing report which indicates that too many people in America are spending a great portion of their income on housing. According to the document, about a third of all households are paying more than 30% of their incomes for housing. The Habitat for Humanity considers such families “cost-burdened” by housing. So does the U.S. Department of Housing and Urban Development.
State of the Nation’s 2019 report connects high prices on houses and rents with a “shortfall in new homes” stating that modest-income households are among those who particularly struggle. Based on National Low-Income Housing Coalition’s report published in March 2019, the U.S. is short on seven million affordable housing units for extremely low-income renter households. These surveys raise a question whether the market is actually capable of providing broader and therefore, more affordable choice of housing in the future.
According to Statista, 2018 data shows that more than a third of those renting a place “did not own a home, because they couldn’t afford one.”
Sacrifices for better housing
Studies show that Americans have to make sacrifices and choose between better housing and other regular expenses.
Harvard University’s Housing study showed that low-income families who deal with high housing costs have to make certain sacrifices. These sacrifices include expenses on health care, transportation, food and retirement savings. Severely burdened households spend 77 percent less on healthcare. According to the report, cutting health care expenses have serious consequences for well-being, especially for children or older adults who need adequate nutrition and medical care.
The Habitat for Humanity says that more than half of American adults had to make at least one trade-off at some point in their lives to pay for housing. Taking second jobs and moving to less safe neighborhoods are among the decisions that they have to make to afford housing.
How to localize the issue?
How affordable is the state or the city in your coverage area? What is the average cost of housing? Cost of living? Where does the area stands on national scale? There are plenty of resources that business reporters can use to find answers to those questions. For example, Realtor.com provides the latest economic data and statistics from the industry. Its 2019 housing forecast predicts even more burden for buyers and sellers. The website also offers possible sales and price growth for 100 largest U.S. Metros. Statista offers U.S. Affordable housing statistics, including number of cost burdened households and most affordable metro areas. Local real estate agencies may also provide surveys and statistics on smaller markets.
Business journalists can also compare local construction statistics. For example, how many low cost houses were built in the last five years compared to luxury apartments.
Look through Federal Expenditures on housing programs and focus on changes in recent years. Curbed reported that Mortgage-Interest deduction “will cost the federal government $27.4 billion in lost revenue”.
It’s worth looking into the HOME Investments Partnerships Program (HOME) that is the largest Federal Block grant program. It offers grants to States and local governments so that they could fund activities like building, buying, rehabilitating and providing assistance to low-income families. There is also the National Housing Trust Fund (HTF) which supports new construction, reconstruction or acquisition for extremely low-income families or for those who are below poverty line.