In the ongoing conversation on minimum wage, more attention should be paid to the urban housing crisis in the USA. Our focus is on the outlook for low-wage workers in major metropolitan areas around the United States. There, housing markets are tight due to limited inventory and high demand.
The Wealthy Are Bidding Up Housing Prices
As the housing market continues to boom, low income workers are being priced out of their homes. The wealthy are bidding up housing prices in urban areas. However, low income workers struggle to find affordable housing.
People have been facing an uphill battle for years. In 2017, the median income for a full-time worker was $37,600 per year. Renting a two-bedroom apartment in most major cities is below what it costs. Even minimum wage workers can’t afford to live comfortably in many cities—in New York City. For instance, the minimum wage is $15 per hour. Yet, the average rent on a studio apartment is $1,800 per month (National Low Income Housing Coalition). This means that many people who work full time must live with their parents or other family members so that they can scrape by.
As the economy booms and wages continue to stagnate, prices for real estate are rising dramatically. Many people were forced out of their homes because they could not afford them anymore. Even, if they could buy them when times were good!
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The problem has gotten so bad that some cities offer tax breaks or other incentives. So, developers will build new houses at less rate!
Low Income Households Rely Heavily On Housing Assistance
The U.S. Department of Housing and Urban Development (HUD) defines a low income household as one that earns at most 80 percent of the median income in its area. HUD also represents a very low income household as one whose annual income is less than 50 percent of the median income in their area.
Low income households rely heavily on housing assistance because they cannot afford housing on their own. Nearly two-thirds of all renters in the United States receive housing assistance from the government or other community groups (HUD). This is because rent prices are rising much faster than wages. Therefore, many people need help to afford to pay rent!
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Housing Costs Are Crowding Out Other Budget Needs
It’s no secret that the cost of housing is becoming harder and harder to afford for Americans. According to the NLIHC, nearly half of the renters in the US are “severely rent-burdened.” They’re paying at least 50% of their income toward housing costs.
This means that they need more money to spend on other things like healthcare and food. That’s a problem because these are necessities that people need to live healthy lives.
A new report sounds the alarm on the effects of the housing crisis. The report found that a single person earning $11 per hour must work 93 hours per week to afford a two-bedroom apartment at fair market rent.
The report’s authors argue that the housing affordability crisis isn’t just affecting impoverished people. Also, those who are just trying to keep their heads above water. They say: “People have been hit hard by rising housing costs and stagnant wages.”
Transportation Costs Can Compete With Housing Costs
The housing crisis has significantly impacted the U.S. economy. It’s not just home prices that have skyrocketed in recent years. Transportation costs have also risen significantly. It made living in certain parts of the country harder.
In 2017, transportation costs increased by 3 percent nationwide. In some cities, however, it rose even faster than housing costs—to the point where they could compete. For example, in Denver, CO, residents pay nearly $1,000 more monthly for transportation than housing. San Jose and San Francisco combined, these two cities spend more on rides than housing.
Commuting Time Is Increasing For Many Workers
The housing crisis has dramatically impacted people’s lives. It’s not just the lack of affordable housing. It’s also the time they spend commuting to work.
Housing costs have risen by more than 50 percent since 2010. That means that people who were once able to afford an apartment near their jobs are now forced to live farther away or settle for lower quality housing options.
For example, in Los Angeles County alone, commuters take an estimated 44 million hours daily on public transit due to the lack of affordable housing. That’s equal to about 2 million car trips!
According to the U.S. Census Bureau, the average commute to work in America is 25 minutes. Still, many workers do longer commutes. The result is that they lose time that could be spent with family or doing other activities they enjoy. This can lead to feeling overwhelmed. It may cause stress and fatigue. A study by the Center for Transit Oriented Development found that low-income households who live close to public transit have shorter commutes than those who don’t live near it. It can result in less stress and fatigue for these individuals.
The Impact Of Gentrification On Urban Communities
Gentrification is a phenomenon that has been taking place in urban communities for years now. The process of gentrification involves the displacement of residents by wealthier ones. It is often due to government intervention and investment in public infrastructure. This can result in significant changes to the social makeup of an area and its culture. It has adverse effects on the people who were displaced from their homes.
People are particularly vulnerable to gentrification. They tend to live in urban areas with a high demand for affordable housing. When property values rise, landlords may raise rents beyond what renters can afford. This forces them out of their homes and into other neighborhoods where rents are lower. It makes them vulnerable to displacement again when those neighborhoods also get gentrified!
Gentrification also impacts people because it increases competition within their community. It makes it harder for them to find work that pays enough to afford their monthly rent.”
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Conclusion
The urban housing crisis in the USA affects people and creates a broader ripple effect of indirect effects on the productivity of the housing and restaurant industries. This trend is especially true in some urban areas, where to sustain low property taxes and rents, restaurants are forced to serve those who can’t afford to live in the area. This inefficiency has not been lost on government leaders, who boast various innovative policies to help reverse the trend.
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