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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