The housing sector is and has been broken. The new era of demand for urban housing makes living in major U.S. cities near impossible. So how did we get here, and how can we solve it? This brief history of the urban housing crisis aims to break it down for you.
Housing costs have been rising faster than renters’ income.
Since 1960, renters’ median earnings have only increased by 5 percent whereas rents increased by 61 percent. As job growth continues to be concentrated in America’s biggest cities, more and more renters cannot afford to live in the cities that they work in.
There are less homes available.
There were fewer homes on the market this year than in any year since 1982. This can be attributed to the increase in construction costs, shortage of construction workers, and less mobilization of people. As a result, America is 7.7 million units of low-income housing behind where it needs to be.
We’re getting rid of “cheap” homes.
In the past 30 years, over 2.5 million lower-cost apartments have been converted into luxury condos, hotels, or offices. From 2010 to 2017, prices in poor urban neighborhoods rose 50 percent faster than richer neighborhoods; consequently, residents have to either live on a check-to-check basis or move away.
The only cities where rent growth has slowed down in recent years have been those that added more apartments. Seattle, for example, built around 10,000 new apartments in 2017 to ease market pressure and successfully did so. However, more must be done than building more homes. Rents and costs of building remain unbearably high in the foreseeable future, and these new developments fail to create a true sense of community among its residents.
More than 65 million Americans live with roommates. That number has grown over 20 percent in just the past 10 years. Coliving addresses this characteristic and offers another solution to the urban housing crisis. Through intergenerational communities and technology solutions, Common enables spaces to be used more flexibly and more conveniently for the urban renter.
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Common provides fully furnished homes across major U.S. cities such as New York and San Francisco. Members pay one all-inclusive rate that covers not only a private bedroom within a beautiful shared suite, but also utilities, community events, and more. Learn about our homes here.
This brief history touches upon the reasons and some solutions to the urban housing crisis. For more information, visit Axios to find an interview with Common Founder and CEO Brad Hargreaves on how we should confront the urban housing crisis.