Do We Need More Affordable Housing?

As affordable housing advocates and developers work to increase and improve low- and moderate-income housing units across the United States, they repeatedly hear the same question: Do we really need more affordable housing? Because home prices have fallen so sharply in the last few years, and there's an abundance of houses on the market, people assume that there's no need to keep building new low-income housing units. However, the need is still great.

Though certain business sectors (like the service industry) have seen wages drop since the start of the recession, the median household income in the United States is actually higher now than it was before the recession. Some argue that it's the result of dramatic increases in income among the wealthy, and doesn't accurately reflect what's happening to low- and moderate-income families.

The latest data from the Census Bureau, collected during 2010, shows that over 31 percent of U.S. families are considered "low-income," earning between $25,000 and $45,000 per year for a family of four. It's the third straight year that number has risen. It is now at the highest point it's been in at least ten years. Nearly half of all Americans (146.4 million people) fall below the $45,000 line, with nearly 50 million falling below the poverty line.

So, while it's true that home prices have fallen, more people are earning less money, with many family incomes falling in direct proportion to home prices. The result is two-fold: 1) housing that was out of reach for low-income families before the recession is still out of reach, and 2) even moderate-income families have less disposable income, making it harder for them to save enough money for a down payment on a home.

In addition, lending institutions have tightened their rules, requiring more money down and better credit scores from people applying for mortgages. And even for the few low-income families who qualify for a mortgage, the homes they can afford are often in such disrepair as to be unlivable. The decline in home prices has had an impact on rental prices, too, driving them up as people shy away from the previously-considered "safe" investment of home ownership and opt instead to rent a house or apartment.

Consequently, affordable housing is still desperately needed. Though the question "Do we need more?" may be frustrating, it provides a great opportunity for advocates and developers to educate people about the realities of the low-income housing market.

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