The US Is Facing An Urban Housing Crunch, Experts Say

March 1, 2019

Family moving home

The U.S. is currently in the middle of an urban housing crunch, experts say. Although housing availability has been an issue for the last few years, urban housing is facing its own problems with affordability and lack of space.

Andrew Collins, the CEO and co-founder of Bungalow Living, says the reason for the crunch is incredibly complicated. “[The] primary problem is that Americans are moving to cities in huge numbers,” said Collins, “yet urban markets simply don’t have enough affordable housing stock.”

Approximately 40 million Americans move every year and many of those Americans are younger folks relocating in their own city. But a growing number of Americans have been migrating to Southern and Midwestern states. With 13.9% of moves occurring in June, many areas are experiencing annual population drops every summer.

The reasons for moving vary. Some Americans are seeking warmer climates and better job opportunities while others are seeking affordable housing. For instance, many New Yorkers don’t have a yard whereas 80% of Alabamians have lawns they mow themselves biweekly.

Financial news website 24/7 Wall St conducted an analysis of the U.S. Census Bureau’s Population Estimates Program in June 2018 to determine which cities were seeing the largest net decline in population.

The cities where most Americans are moving away from are predominantly found in the Northeast, Midwest, and West Coast. States such as Illinois, Michigan, Ohio, and New York saw the largest population declines. The cities seeing the largest declines include Chicago, Detroit, St. Louis, New York, and Los Angeles.

“Zoning laws that prohibit density in urban centers and Nimbyism… a whole smorgasbord of factors adds up to the simple fact that we just don’t have enough places for people to live in cities affordably,” said Collins.

William Frey, the demographer of nonprofit public policy research group Brookings Institution, says that the movement from New York and Los Angeles to other cities is caused by residents getting pushed out by rising populations and prices.

“Now that things are picking up again, people are moving out of cities,” said Grey. “As the housing market is coming back, people are being sucked out of pricey areas to where it is more affordable again.”

But that isn’t the case in every metropolitan city. For example, San Francisco’s affordable housing crisis is so dire that even the worst of homes are being sold for hundreds of thousands of dollars. Just recently, a 480-square-foot fixer-upper was snatched up for $600,000.

To put that price into perspective, the average 3-bedroom, 2.5-bathroom house of 1,800 square feet in the U.S. is $200,000. A square of siding alone is 100 square feet.

Companies such as Microsoft and Amazon are investing millions of dollars to create affordable housing in cities where their companies have had a major impact. Hip-hop icon Queen Latifah also recently donated $14 million to affordable housing in Newark, NJ.

However, despite these donations, Collins says it’s going to take a conscious collaboration between the private and public sectors for cities to see major change.

“But I do see a reason for optimism. Cities are aware of the problem and are looking for creative solutions,” said Collins. “I think it’s going to take conscious collaboration between the private and public sectors, and I’m encouraged that there’s change in the air.”

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