Today’s Housing Challenge: The 10 Most and Least Affordable Metros

By Tony DeLisi

As economic developers, we work in communities large and small spanning a range of geographies. In recent years, we have noticed a common trend in many of these communities – Americans are finding it more and more difficult to find and afford housing.

Attainable housing. Affordable housing. Workforce housing. There are many descriptors and definitions used to discuss this topic, but they often boil down to the same concern – healthy communities require housing that is affordable to residents at a range of income levels.

The required mix of housing prices and types (i.e., multi-family apartments versus single-family houses) varies from place to place, but research and our own experience shows that communities lacking a mix of housing options can suffer real economic consequences.

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Over the past decade as wages were stagnant, we saw a massive shift from home ownership to renting. According to data from the US Census American Community Survey, 330,000 fewer households own homes in 2014 than 2005. In contrast there are now 6.5 million more renters than a decade ago.

One might assume this is due to inflated ownership levels at the height of the housing bubble in 2005. But the decline in home ownership actually accelerated once the economic recovery began in 2010.

This shift towards renting has not made things easier – a rising share of households cannot afford their homes. In 2014, the share of households paying unaffordable costs for housing rose to 35%. (Housing is considered unaffordable if it costs more than 30% of a household’s income).

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So which cities have the least and most affordable housing?

Avalanche dug into the most recent 2014 American Community Survey data to determine the share of households in both rented and owned homes that are paying more than 30% of their income towards housing. This percentage represents that share of housing in a community that is unaffordable.

Looking at America’s largest 100 metropolitan areas we see the following:

The Top 10 Least Affordable Metros for Renters and Owners

1. Los Angeles, CA – 48% of all units are unaffordable
2. Miami, FL – 47%
3. New York, NY – 46%
4. San Diego, CA – 45%
5. Riverside, CA – 45%
6. Honolulu, HI – 44%
7. Fresno, CA – 43%
8. Stockton, CA – 43%
9. Oxnard-Thousand Oaks, CA – 43%
10. New Haven, CT – 43%

The Top 10 Most Affordable Metros for Renters and Owners

1. Des Moines, IA – 25% of all units are unaffordable
2. Ogden, UT – 26%
3. Pittsburgh, PA – 27%
4. Youngstown, OH – 27%
5. Tulsa, OK – 27%
6. Fayetteville, AR – 27%
7. Grand Rapids, MI – 28%
8. Greenville, SC – 28%
9. Oklahoma City, OK – 28%
10. Wichita, KS – 28%

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The increasing unaffordability of housing is a serious concern in many communities – especially for renters – 52% of all American renters are in unaffordable units. There are no simple solutions to this issue.

The most successful communities are developing proactive, multi-pronged approaches. Strategies include changing development processes to encourage housing construction, allowing for increased density, providing incentives for rehabilitation and new development, and even directly funding the construction of critically needed housing.

Our next post in this three-part series will share creative best practices and explore what flat wages and increased housing costs means to economic development professionals.