Is Housing Unaffordable? Why Isn't It More Affordable?

TLDR

The paper reviews U.S. housing affordability trends over four decades, investigates how income distribution, housing quality, land‑use regulation, and zoning shape rent burdens for low‑income renters, and outlines potential policies to enhance affordability. The authors analyze affordability trends and assess the relative impact of income distribution, housing quality, land‑use regulation, and zoning on rent burdens in the low‑income rental market.

Abstract

This paper reviews trends in housing affordability in the U.S. over the past four decades. There is little evidence that owner-occupied housing has become less affordable. In contrast, there have been modest increases in the fraction of income that the median renter household devotes to housing. We find pronounced increases in the rent burdens for poor households. We explore the low-income rental market in more detail, analyzing the relative importance of changes in the income distribution, in housing quality, land use regulation, and zoning in affecting rent burdens. We also sketch out some policies that might improve housing affordability.