Coping with Unaffordable Housing Costs

As of the end of the second decade of the 21st century, in some urban and suburban areas of America, many people in a variety of occupations do not earn enough income to afford to rent or buy a residence. For example,  in the city of San Francisco, school teachers, police officers, construction workers, and people in many more occupations cannot afford to live in San Francisco. However, the people of San Francisco still need all those occupations.

The situation is much the same in Los Angeles, Seattle, New York, Boston, Washington, D. C., the more desirable suburbs of Chicago, and many other cities and regions. In the more expensive places, costs to buy or rent a home or an apartment are four to twenty times higher than in less expensive regions. 

The solution for unaffordable housing costs is not to be found in laws of the state or in federal subsidies for lower cost housing or in low-cost housing built by cities and subsidized by the United States of America. Those initiatives have failed to produce housing that is both affordable and free of squalid living conditions and dangerous criminal activity.

According to Portland, Oregon City Councilman and Housing Commissioner Dan Saltzman, “. . . the public-housing blocks that [some] cities built during the 1960s and 1970s . . . turned into crime-ridden slums almost everywhere they were tried.”

For people who are priced out of an expensive real estate market where they live, relocation to a less expensive housing market is a solution. For many people, relocation may be unattractive in some respects, such as employment opportunities, but it is a solution within the power of individuals to achieve. There is an increasing number of Americans who are moving away from big and expensive cities to smaller, less costly cities, not just to find lower housing costs, but also to enjoy a higher quality of life.

The reason for the extreme differences in housing costs across the United States is the relative ease or difficulty of building new housing. In the most expensive areas of the U.S. there are restrictions on building that are not present elsewhere, such as:

  • limitations and requirements imposed by local zoning laws
  • unrealistically high construction standards for new housing for low-income renters
  • opposition of existing residents to new construction of lower-cost homes and rental properties
  • rent controls that make it a losing proposition for entrepreneurs to build and maintain multi-tenant residential properties

The United States has a long history of construction of affordable housing including the following:

  • Between 1865 and 1937 entrepreneurs built many hundreds of thousands of low-cost, affordable multi-family homes and apartment houses in Chicago, Brooklyn, Boston, Oakland, California, and elsewhere.
  • After World War II, affordably priced new homes and apartments were built in large numbers by entrepreneurial builders such as William Lyon and Nathan Shapell in California, Del Webb in Arizona, and Levitt and Sons in the northeastern U.S.
  • Between 1976 and 2018, Habitat for Humanity, a not for profit enterprise, built 100,000 low cost homes in the United States and eventually expanded its construction internationally.

In all these examples individual homes were built to sell at prices equivalent to approximately $90,000 in constant 2019 U.S. dollars, including land costs. $90,000 is the average cost of a modest-sized home built contemporaneously by Habitat for Humanity. $90,000 is an affordable cost of a home for Americans earning the $40,000 annual median U.S. income.

To move from a high-cost housing area to a low-cost housing area involves giving up the employment one has and searching for work in the new location—an often daunting prospect.  However, this is the tradeoff that exists in finding affordable housing. It is being done by many Americans, who because of housing costs leave expensive places such as Los Angeles and San Francisco to relocate to less expensive places.

All across America at present, there are many places with median home prices between $85,000 and $160,000, for example Huntsville, Alabama; Tucson, Arizona; Fort Smith, Arkansas; Evansville, Indiana; Sioux City, Iowa; Kalamazoo,  Michigan; Hattiesburg, Mississippi; Plattsburgh, New York; Tulsa, Oklahoma; Omaha, Nebraska; Memphis, Tennessee; El Paso, Texas; and Huntington, West Virginia. In each of these cities there is an active cultural life associated with one or more nearby four year colleges or universities.

Moving one’s residence to a more affordable location has become so common that in some previously lower-cost places, for example Boise, Idaho, and Corvallis, Oregon, housing costs have been rising rapidly in recent years due to influx of people from higher cost areas in search of more affordably priced housing.




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7 Responses to Coping with Unaffordable Housing Costs

  1. Ronald Scott Haxton says:

    Freedom might solve this. Many of the affected folks are living on Social Security payments because of nervous system defects or acquired nervous system damage. They often self medicate with expensive street drugs. Cheaper drugs are available at the local pharmacy at a much lower cost. If they could self medicate with readily available ethical pharmaceuticals they might be able to lower their costs of living to enable them to use commercially available housing. I have not personally investigated this issue, but someone should. Freedom to buy inexpensive pharmaceuticals without expensive permission slips from doctors might reduce the business of the drug cartels and make their business model less attractive. I have seen no evidence of anyone looking at this from the freedom point of view.

    • fgmarks says:

      You have identified an important idea. An analysis published by the Cato Institute in 2017 concludes that criminalization of sale of narcotic drugs in the United States has had the following adverse consequences. It is not effective in reducing narcotic usage; has contributed to an increase in overdoses; and by making the illegal drug trade highly profitable has fostered and sustained powerful drug cartels. See “Four Decades and Counting: The Continued Failure of the War on Drugs,” Cato Institute Policy Analysis #811, April 12, 2017,

      In a totally free market, narcotic drugs would be available like other products that people use, such as alcoholic beverages and tobacco that can be harmful to their health. Competition for sale of narcotic drugs as a profitable consumer products business would result in easy availability and low prices. Such drugs then would be no more expensive than aspirin is at present. As you observe, this would be beneficial to homeless people who either need the narcotics to control pain or are addicted to narcotics.

      Decriminalization would also take eliminate a principal incentive for activities of street gangs in the inner city neighborhoods of America.

  2. Gary Nelson says:

    Quality of life issues aside, people who are priced out of an expensive real estate market where they live can relocate to a less expensive housing market. If a significant number move from an area, employers will need to raise wages to attract the smaller number of applicants. Perhaps more income will open up more of the housing market as affordable, for a while. Those who do relocate from higher cost areas find housing costs in the new location rising rapidly due to the influx of job seekers such as themselves. But due to the plethora of job applicants, wages remain low and they would find themselves in a the same dilemma as before they moved, priced out of the real estate market. Where is the equilibrium?

    • fgmarks says:

      Your analysis appears substantially correct. You ask where is the equilibrium? The pursuit of equilibrium seems to lead nowhere. How does one know what is equilibrium in the market for housing and the market for labor? Who will define equilibrium? Is not the attempt to achieve that kind of equilibrium the hallmark of the failed, collective states of the past 100 years?

      People in their individual pursuit of happiness must decide how much to pay for housing. Paying too much can be quantified. If one’s housing costs prevent one from achieving financial security through saving and investing, the housing costs are too high. What to do about that? The remedies are known. One is for people to share housing, thereby sharing the expense. This entails a reduction in privacy. That is the tradeoff.

      Another remedy is mentioned in the Post. Move to a place where housing costs are lower, accepting the inconvenience and perhaps the hardship of finding remunerative work in the new location.

      For cities with expensive housing, a consequence will be a shortage of people to do the work that has not been adequately compensated. Those wanting such services may decide to pay more for them. It is up to them, in freedom.

      The Law of Supply and Demand is always operating in any situation. If the supply of anything is lower than the demand for it, prices rise ultimately, and that includes not only housing but also payment for the labor of the people needed in any society.

  3. Gary Nelson says:

    Equilibrium is not the hallmark of the failed, collective states of the past 100 years, though perhaps it was the states intent. It is the price produced by supply and demand at which free market buyers and sellers agree to an exchange. State involvement in rent control, housing subsidies, tax-paid low-rent or purchase housing projects and minimum wage laws do not produce the equilibrium desired that could only be available in the supply and demand of a free market. It is difficult to visualize how long it will take with Freedom for supply and demand of the free market to decrease or eliminate the inadequate housing/slums?

  4. Neil Moryson says:

    If the solution to the affordable housing situation, as stated in this blog, is to move somewhere more affordable, how will this help the City of San Francisco who, as stated, need the occupations of teachers, construction workers, and police officers?

    I’m reading your response to Gary Nelson that somewhat addresses this question:

    “For cities with expensive housing, a consequence will be a shortage of people to do the work that has not been adequately compensated. Those wanting such services may decide to pay more for them. It is up to them, in freedom.”

    Has this been a consequence in San Francisco or any other over-priced city? Sure those “wanting such services (police officers, teachers)” may decide to pay more for them, but how exactly will they pay for them? Currently it’s through taxes which is governed by a governing body which is elected by the electorate. After all, I might want 100 police officers and my neighbor wants 1000. But since police officers and teachers are there to serve entire communities and are paid for by entire communities (ie. taxes), we must rely on a voting system and sometimes I might get what I want depending on the vote, or sometimes my neighbor will get what he wants and I won’t and will have to suck it up (and hopefully he won’t get what he wants by buying off a Politician).

    In any society, there’s always going to be “those who want such services” and those who maybe don’t want such services. But if they all live together in the same city utilizing the same police officers and teachers then those not really wanting such services might, unfortunately, have to pay for them because the majority of residents do want those services. Most people will never have the means to pay for their own private police officers and teachers. Is anyone rich enough to have their own private plumbing and sewer system, their own private electricity grid, private roads and all the other things us plebeians must unfortunately share with millions of other people in a (city like San Francisco).

    Isn’t the real problem in America crony capitalism?

    • fgmarks says:

      The New York Times published an Op-Ed by Conor Dougherty that you may find informative on the issue you raise. The thesis of Mr. Dougherty’s essay is that much more construction of housing is needed in cities like San Francisco, but the legal and social impediments to new, affordable housing are what have created the housing shortage in San Francisco. You can access Mr. Dougherty’s article in the New York Times of February 14, 2020

      Mr. Dougherty’s article is a shorter presentation of ideas presented in full by Mr. Dougherty in his book Golden Gates: Fighting for Housing in America, published in February 2020.

      In San Francisco, politics is the source and cause of the huge disparity between cost of living and the incomes of most people who work in the city. The political causes of the housing shortage are summarized and explained in this post as well as in Mr. Dougherty’s article and book.

      Your comment questions whether people can afford to pay for police protection, schools, and infrastructure of a city other than by taxation assessed by political means. All of the book which is the centerpiece of this website, and especially chapters 1, 31 and 32 of the book, are addressed to this question. The answer is that every public service needed by individuals and by the public can be provided by free enterprise, without taxation and politics.

      Americans have had political governance and taxation since the inception of the republic. The existence of housing shortages in large cities such as San Francisco is evidence that political governance and taxes, rather than being a solution, are the causes of the problem of unaffordable housing.

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