Decomposing Housing Unaffordability

Author: Salim Furth

A US household is considered ‘rent burdened’ when its rent exceeds 30% of its income. This simple ratio can be decomposed to better understand the sources of unaffordability across space. To demonstrate this new approach, I rewrite the equation for rent burden as a sum of four factors: rent gap, income gap, excess size cost, and demographic baseline, and show that US rental unaffordability is mostly the result of low incomes. Focusing on the New England region, however, I show that high rent is the primary cause of unaffordability in high-cost, high-wage metro areas. This decomposition can help affordability advocates prioritise strategies appropriately across space.

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Document Type
article
ISSN
2336-2839
Volume / Issue
8 / 1
Pages
62-71
Date of publication
6.5.2021

Cite this article

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Furth, S. 2021. ‘Decomposing Housing Unaffordability.’ Critical Housing Analysis 8 (1): 62-71. https://doi.org/10.13060/23362839.2021.8.1.523