Decomposing Housing Unaffordability
Decomposing Housing Unaffordability
Author(s): Salim FurthSubject(s): Welfare systems, Rural and urban sociology, Socio-Economic Research
Published by: AV ČR - Akademie věd České republiky - Sociologický ústav
Keywords: housing economics; private rented markets
Summary/Abstract: 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.
Journal: Critical Housing Analysis
- Issue Year: 8/2021
- Issue No: 1
- Page Range: 62-71
- Page Count: 10
- Language: English