Today the Joint Center for Housing Studies at Harvard releases its annual State of the Nation's Housing report. As always, it is chock full of useful information about the trends in the housing market—the role of aging boomers and coming of age millenials in household formation and thus housing demand, the continuing pressure on rental markets, why homebuying slowed down again. Check it out.
And of course one of the things it points out, as it always does, with slight year to year variations, is the enormous number of households, especially low-income ones, that are what we call “cost burdened” (spending more than 30 percent of their income on rent) or “severely cost burdened” (spending more than 50 percent of their income on rent).
This is an important measure, but it always strikes me as a little odd that it is our only measure of housing affordability. It clearly doesn't make sense at the extremes—if I make several million dollars a year, it really doesn't matter if I spend 90 percent of that on my housing. I'll eat fine, pay my bills, own a car and send my kids to college, and if I complain about being “severely cost burdened” everyone, I hope, will play the worlds' tiniest violin for three seconds and then ignore me.
On the other hand, if I make $600/month, having rent under $180/month would be a lot better than rent that is higher for sure, but it doesn't mean I actually now magically have enough to live on, nor that it will be easy for me to afford my rent.
(NB: At that income range there should, at least, be food stamps and utility assistance. But it's still not enough. And housing assistance only goes to 1 in 4 who are eligible.)
Of course mostly discussions of housing affordability don't talk about the super upper end, for obvious reasons. The highest income bracket measured for percent cost burdened in SOTNH is $75,000/year and up.
So let's talk about these middle ranges. Now, it's true that if if you are raising a family on a single income, especially in a high-cost area, it can feel like it's hard to make ends meet on $75,000/year.
On the other hand, it is really fair to call that $75k earner “severely cost burdened” if they have “only” $35,500/year to spend on non-housing expenses (50 percent of income), but claim it's possible for people making $20,000/year total to not be cost burdened at all if they have at least $14,000 left to work with after housing costs?
After all, the cost of living is not sliding scale. Food, toilet paper, car insurance and gas, school supplies, and clothing are not proportionally cheaper as you go down the income brackets.
This is a philosophical exercise, not, of course, an argument against the need for or importance of more affordable housing at a variety of price points in a variety of places. If anything it says that it's even more important and in short supply than our numbers say.
But I do think it's useful to step back periodically and think about the terms and standards we use and what they imply and make sure they don't overshadow the larger goals: economic inclusion, dignity, security, and healthy neighborhoods for everyone.
Along with housing funding, this requires fighting for living wage jobs, economically diverse neighborhoods, good transportation systems, and a strong social safety net among other things.
People spending less than 30 percent of their income on housing is a rough, and fairly arbitrary, indicator—useful for showing larger trends, but not the end goal itself. Let's keep our eyes on the bigger prize.