May 1, 2019
Once upon a time, single-family homes were built specifically for the middle class. This was part of the American Dream, the one in which a family could aspire to work hard and eventually own one’s own home. In this day and age, however, housing affordability has chipped away at that concept. In its report, “Attainable Housing: Challenges, Perceptions and Solutions,” the Urban Land Institute, in conjunction with RCLCO, underlined the fact that housing price points are higher than middle-class incomes.
The report, first of all, defines “attainable housing” as “nonsubsidized, for-sale housing that is affordable to households with incomes between 80%-120% of the area median income.” While household incomes have increased more slowly than home prices, the divergence between the two was especially pronounced during the marketing boom in the mid-2000s, and has widened even further during the post-recession boom, the report noted.
The researchers cite both income and housing scarcity/supply constraint as reasons for the lack of attainable housing. For one thing, while residential construction activity has rebounded since the financial crisis, new housing starts are still below long-term averages. Furthermore, larger-less affordable homes are representing a growing share of the market. “The lack of overall supply — and the next-to-zero growth in new construction at attainable price points — has led to significant challenges among many young adult households and others with moderate incomes, who are looking to become homeowners,” the report researchers said.
The report does outline solutions that developers are focused on, which include:
- Smaller homes (1,400 square feet or less)
- Value housing (simpler designs, streamlined structural and interior finish options)
- Missing middle, or “attached” housing (duplexes, triplexes, fourplexes, townhomes, live-work buildings)
- High-density detached (“cluster” housing surrounding a green or motor court, on smaller lots)
The report ends by indicating that creating attainable housing doesn’t mean downplaying amenities. Creativity and thoughtfulness can “relieve the current downward pressure on the market that has kept renters from becoming homeowners, and that has made housing increasingly unaffordable for Americans at lower income levels.”
Pictured: Onyx+East’s Switchyard at Fletcher Place, Indianapolis, IN
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