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Publication Date

September 2000


George McCarthy, Michael A. Stegman, Roberto G. Quercia

The quest for affordable housing has become a middle class crisis – and it has moved into the suburbs.

Among the top quality of life issues facing Americans across the income spectrum today is the increasing difficulty of finding affordable housing. What’s new and important is that the issue is no longer a crunch felt primarily at the bottom of the income scale. Instead, it has moved with surprising rapidity and reach well into the middle class. It has also reached well into the suburbs, following the pattern of the nation’s population and job growth. For the first time, in fact, the number of working families with critical housing needs is higher in the suburbs than in the central cities.

These are the key findings of a comprehensive survey of the nation’s housing needs that we recently completed. While the poor have by far the highest incidence of housing needs, an exclusive focus on very low-income families overlooks the fact that more than 3 million moderate-income families face a critical housing need despite working the equivalent of a full-time job. Of these, 1.3 million live in the suburbs, 1.2 million in the central cities, and the remaining 513,000 working families live in rural areas.

Our study focused on working families with incomes from minimum wage ($10,700 annually) all the way up to 120 percent of the local median income (nationally about $44,000).

In a striking finding, more than half (51 percent) of families with critical housing needs are homeowners. Because our measure of homeowner costs – payments for mortgage principal, interest, property taxes, and homeowner’s insurance – does not include utility or maintenance costs, our study probably understates the extent of many homeowners’ financial strain. And because most low- and moderate-income homeowners do not itemize deductions, the mortgage interest deduction had little impact on their housing costs.

Topics(s): Affordable Homeownership, Housing Policy, Mortgage Finance