February 27, 2024
Newly released housing affordability data from the U.S. Census Bureau shows the proportion of households in the region that are cost burdened has declined, but there is still a ways to go before housing becomes more affordable for everyone in the region.
Maintaining a diverse supply of housing at all price points helps ensure that everyone can find a place to live. It is critical to attracting a sufficient labor force, increasing economic prosperity, promoting public health, and providing a high quality of life. Households paying more than 30% of their income on housing may have trouble making other necessary payments and building wealth. Substandard housing conditions, steep home prices, and lower income levels all exacerbate inequities experienced within disadvantaged communities and can prevent individuals and families from fully accessing the opportunities afforded to others in the region.
The DVRPC Long-Range Plan, Connections 2050, sets a goal to preserve existing and build more accessible and affordable housing in our region, reducing the how much of a household’s income is spent on combined housing and transportation costs. Stable, affordable housing helps to reduce poverty and income inequality; enhances people's ability to afford their other basic needs; increases economic mobility; supports access to jobs for residents and workforce for employers; reduces homelessness; boosts economic activity by increasing purchasing power; mitigates sprawl and loss of open space or farmland along with traffic congestion; and improves quality of life for people of all socioeconomic backgrounds. Research from the National Low Income Housing Coalition has found that a lack of affordable housing reduces wages and productivity by nearly $2 trillion per year in the U.S. This research has further estimated better access to affordable housing would have increased GDP growth 13.5% between 1964 and 2009—increasing income by $1.7 trillion or $8,775 in additional wages per worker. Each dollar invested in affordable housing boosts local economies by supporting job creation and retention, and generating higher resident earnings and local tax revenue. Analysis for DVRPC's Comprehensive Economic Development Strategy (CEDS) has found that a lack of affordable housing stock in the region is a major challenge for recruiting, retaining, and attracting workers.
To help track progress towards the Connections 2050 housing affordability goal, DVRPC tracks the Housing Affordability indicator, among other metrics. Newly released housing affordability data from the U.S. Census Bureau shows that more than 752,000, or 33 percent of all households, were cost burdened in 2022. This means they pay more than 30% of income on housing. While this figure has decreased by 10% since its peak of over 834,000 in 2011, renters have experienced a significant increase in housing cost burden. The number of rental households paying more than 30% of their income in rent has increased by 11%, from 349,000 in 2011 to 387,000 in 2022. In contrast, the number of homeowners paying more than 30 percent of their income for housing has decreased by 25%, from 486,000 in 2011 to 364,000 in 2022. While this shows the region has gradually made progress in enabling residents to spend less of their incomes on housing, there is still a long way to go to ensure housing is affordable for everyone.
The financial burden of housing is unevenly distributed between the region’s core cities and its developing and rural areas. From 2012 to 2022, the region’s core cities had higher percentages of cost-burdened households compared to areas outside of the cities. For example, in 2012, 44.6% of households in the region’s core cities were cost burdened, versus 36.6% in the region’s rural areas. In 2022, these figures were 39.7% versus 25.5%, respectively. Though residents of suburban and rural areas have lower housing costs, they generally have higher transportation costs compared to households in urban areas. While suburban residents in Greater Philadelphia have lower rates of cost burden than urban residents, on average, housing costs are higher in some suburban submarkets.
Renters in the region tend to be cost burdened more often than homeowners. The majority of the region’s renters, whether living in the core cities or in rural areas, have been cost burdened at roughly twice the rate as homeowners each year since 2005. This trend has continued into 2022, where 52.2% of the region’s renters were cost burdened, versus 23.8% of owners. These figures have also decreased from their 2011 peaks at a faster rate for homeowners than they have for renters. In 2011, 34.7% of owners were cost burdened, versus 23.8% in 2022, an almost 11% drop. In contrast, 54.2% of renters in 2011 were cost burdened, versus 52.2% in 2022, only a 2% drop.
The Housing Affordability indicator only measures cost burden among the region's households, and not the supply of affordable housing. The directionality of cost-burden trends can be impacted by changes in both income and housing supply. If lower income households are priced out of a county or the region, it would create a downward trend in cost burden, but it would not reflect a positive trend for an inclusive housing market. Rising incomes can reduce the cost burden without increasing the supply of affordable housing units. Since no single indicator can give a full picture on the region’s progress toward obtaining the vision outlined in the Long-Range Plan, find more information on how our region’s communities are evolving from these related Tracking Progress indicators: Housing Permits, Community Integration, Income, Land Consumption, and Mortgage Lending. Download the data for your own use through DVRPC’s Data Catalog, accessed by a link under each chart.
While housing has gradually become more affordable, progress has been uneven by location and ownership status. The region still faces high housing costs. To see the housing affordability data further broken down at various regional geographies, go to the “How are we doing?” tab in the Housing Affordability Indicator.