Why people do not flock to the American cities that keep showing up in the most affordable places to live

I recently saw another list of the most and least affordable metropolitan areas in the United States with a key metric of how many families in the region could purchase a home at the median price. Here are the five most affordable places:

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Home prices and incomes vary widely, and there are oases of affordability, mainly in the Rust Belt and Midwest. The top five most affordable places among metro areas with population of 500,000 or more:

Lansing, Michigan: As a result of modest home prices, 90.6 percent of all new and existing homes sold in the fall months were affordable to families earning the area’s median income of $79,100. The median home price was $155,000 in the fourth quarter of 2021, the builders’ index says.

Scranton-Wilkes Barre-Hazleton, Pennsylvania: Wages here are below national levels, but so are home prices — the median sale price was $150,000 in the fourth quarter. As a result of rock-bottom prices, 88.5 percent of all new and existing homes sold in October, November and December of 2021 were affordable to families earning the area’s median income of $70,600.

Pittsburgh: This metro area has a median family income of $84,800 and a median home price of just $166,000. As a result, 88.4 percent of homes were affordable for typical earners.

Indianapolis. This metro area has a median family income of $81,600 and a median home price of $215,000. As a result, 87.6 percent of homes were affordable for typical earners.

Akron, Ohio: With a median family income of $83,300 and a median home price of $165,000, fully 86.5 percent of homes were in reach of median-income families in the state capital.

Two features quickly stand out: the homes in these regions really are cheap (particularly when compared to local earnings) and they are all in the Midwest/Rust Belt.

Still, I have seen some version of this list many times now and I am not sure what to make of them. Why aren’t people moving to these locations?

The most obvious answers to me: it is not necessarily easy to move and these cities are perceived to have a lack of opportunities (economic, cultural, housing, etc.). American geographic mobility as a whole is down but do people actually move just for cheaper housing? What this list does is highlights that median income families can access median level housing in these five places. Get a decent job and owning a house is possible.

There are other possible answers that get more complicated:

  1. People just do not think of the Midwest/Rust Belt when thinking of places to live. Lack of opportunities, the weather, the middle of the country, a Midwestern blah-ness, etc.
  2. It is not just about a lack of opportunity; these are places seen as on the decline. Even if they are cheaper, who wants to live in a place that has already seen its best days when “growth is good” is a key marker of communities?
  3. These communities are lacking incentive campaigns to try to attract new residents.
  4. These communities may not want too many people to move in because it could drive up prices and bring in outsiders. (Yet, growth is good and many declining communities would do a lot to become a destination again.)

In sum: some American metropolitan areas are much cheaper than others, they have common characteristics, and there are a number of compelling reasons why people do not move to the places with cheaper housing.

Hot rental market in Phoenix and supplying enough housing

In an article about a large and expanding encampment of the homeless in Phoenix, here are some details about how rental prices in the city have shot up:

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“People say, ‘Are you surprised?’ And I say, ‘No, not really, because all of the housing forces in Phoenix and Maricopa County have been working against us for years,’” said Human Services Campus Executive Director Amy Schwabenlender, who works in the area with the encampment, sometimes referred to as “the Zone.” “We’ve had ongoing population increases in Phoenix and Maricopa County. We haven’t had housing production at all income levels keep up and meet that increase in population.”

Real estate investors are pouring cash into Phoenix and driving up prices. Rents there have spiked 25.6% over the past year, compared to a 15.9% increase in the U.S. from January 2021 to January 2022, according to data analyzed by Zillow. (Other popular Sun Belt cities like Miami and Tampa have also seen dizzyingly fast increases in rent.) Vacancy rates in Phoenix, or the availability of places for people to rent, are also at their lowest in 50 years, according to the Arizona Republic

While much of the rest of the article focuses on addressing housing for the homeless, this sounds like a bigger issue. This is an area with a growing population: Phoenix is now the fifth-largest city in the US and had a little over 100,000 residents in 1950 before experiencing double-digit percentage population growth in all but one decade since. Housing opportunities, particularly in rentals, have not kept up. American sprawl often produces a lot of single-family homes but necessarily cheaper houses or multi-family units for those who cannot secure a sizable mortgage.

What can Phoenix and surrounding communities do? Addressing housing in the United States is a difficult task. It will take concerted effort across communities for years. It may not be popular. But, it is essential for ensuring housing for all who need it.

It would be great to have an example of a city and region in the Sun Belt – roughly Virginia to southern California – that has successfully addressed this even as they have experienced significant growth in recent decades. I do not know if there is a great example, outside of some places not becoming too popular such that it raises demand and housing prices.

Declaring a mountain lion sanctuary and other NIMBY efforts

Wealthier communities have a variety of means by which to oppose or block cheaper housing or affordable housing. This can include emphasizing conservation in a Silicon Valley community:

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“Woodside declared its entire suburban town a mountain lion sanctuary in a deliberate and transparent attempt to avoid complying with SB 9,” California Attorney General Rob Bonta wrote in a letter to notify the town that the move violates state law and must be amended.

After receiving a letter from the attorney general this weekend that threatened further legal action, the town ended its short jaunt into the world of conservation the next day. In a statement on Monday, the council said that the Department of Fish and Wildlife “had advised that the entire Town of Woodside cannot be considered habitat” and that “as such, the Town Council has instructed staff to immediately begin accepting SB 9 applications.”

Woodside is not alone in recent efforts:

Woodside is far from the only town that has attempted to come up with creative ways to block the statewide rezoning law. Since its introduction last year, local governments and homeowner groups have opposed the plan, claiming that it crushes single-family zoning.

There have been at least 40 cases in which towns attempted to block or limit SB 9 housing, according to affordable housing advocacy group Yes in My Back Yard Law.

I would not expect wealthier communities to just go along with new guidelines. The combination of local government authority over zoning plus wealth means that certain communities can delay and/or fight affordable housing or more housing. Or, state legislation or federal guidelines are written in such a way that communities escape scrutiny or any penalties (see the example of Illinois). Is the situation different now in California such that communities will not be able to delay any longer?

More broadly, how much do efforts to conserve open space in suburban areas really take place to protect wildlife and land versus limiting the amount of development? From my research in the Chicago suburbs, I recall numerous efforts to protect open land and expand Forest Preserves. These often occurred during mass suburbanization in the postwar area as open space quickly disappeared among new subdivisions and roads. Open space can help limit the number of nearby residences, reduce noise and traffic, and boost property values by limiting housing supply.

The presence of mobile homes in the Chicago area

Remembering a small mobile home community not too far from the suburban home in which I grew up, I was interested to see numbers on how many mobile homes are in the Chicago region and read about the experiences of people living in mobile homes:

Yes, we do! It turns out hundreds of families live in Chicago’s only trailer park, Harbor Point Estates, which is in the far southeast corner of the city. It sits along the shores of Wolf Lake in the Hegewisch neighborhood, just off 134th Street. The community is so close to Indiana you can fly a kite there, a property manager says.

And beyond the city’s borders, there’s another 18,000 mobile homes in the seven-county metro area, according to estimates by regional planners. Mobile home communities are squeezed between expressways and plopped down in exurban cornfields, from the North Shore to Peotone…

Curious City got a question about trailer parks from a listener interested in affordable homeownership. “What is life like in Chicagoland trailer parks?” the listener wanted to know.

So we visited manufactured housing communities in Chicago, Blue Island and Des Plaines to ask residents that question. And we met people with a whole range of experiences. We found some who had moved to the trailer park as a way to make ends meet. We found families looking for peace and safety and a quiet place to raise their kids. We found residents who liked the trailer park because they could live near extended family — adult siblings, cousins — and others who’d adopted neighbors as extended family. We found people living in their familiar mobile home deep into old age. We found folks looking for a foothold to the American Dream.

Many suburban communities and urban neighborhoods would not want or approve mobile homes. As communities tend to prefer development (if they prefer any new development) that matches or exceeds the prices and styles of existing residences, mobile homes can be hard to find in metropolitan regions.

This also reminds me of sociologist Matthew Desmond’s findings about urban mobile home communities in Evicted. Such communities do exist, their landlords can and do make money, and residents in mobile home communities can face a number of issues.

Yet, because of their cost, they can be a housing option for many. Looking to address affordable housing in the Chicago region? Mobile homes could be part of a comprehensive answer.

(Bonus: the title of my published study on religious zoning in Chicago suburban contexts refers to someone saying that would prefer mobile homes nearby rather than a possible Islamic Center.)

Perhaps celebrity-led affordable housing is not the answer

Actor Brad Pitt created a foundation that built 109 affordable housing units in New Orleans after Hurricane Katrina. According to one observer, the project has not gone well:

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Brad Pitt’s Make It Right Foundation built 109 eye-catching and affordable homes in New Orleans for a community where many people were displaced by damage wrought by Hurricane Katrina in 2005. Now this housing development is in disarray. The vast majority of the recently constructed homes are riddled with construction-related problems that have led to mold, termites, rotting wood, flooding and other woes.

At least six are boarded up and abandoned. Many residents have filed lawsuits that are still pending. That is, a nonprofit that built houses with input from Frank Gehry and other prominent architects amid much fanfare for survivors of one disaster then ushered in another disaster…

Brad Pitt, who took credit for launching this organization in 2007 and often served as its public face in subsequent years, was still listed as a board member as of 2018.

Pitt’s lawyers argued that he could not be sued over the housing development’s failings, but a judge ruled in 2019 that the movie star would remain a defendant because of his role as Make It Right’s founder and chief fundraiser.

Housing, plus the decades of policies and history undergirding it in particular locations and in the broader sense, is difficult to address.

This proposed solution is one employed in many American sectors. A celebrity comes in and lends their name and resources to a project. I think I showed a class a documentary Pitt narrated about efforts to rebuild in the Lower Ninth Ward.

What happens in the end because of the efforts of the celebrity? Here, the outcome does not sound good: the homes are in disrepair and court cases are pending. The homes that were intended to help are their own problem.

To repeat, tackling affordable housing, even with the help of a megastar, is no easy task.

The arguments for and against banning zoning for only single-family homes

The single-family home is very important in the United States and this is enshrined in land use policy and zoning. Because of this, there is a move in multiple communities to ban single-family home zoning and this has prompted debate over the change:

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Originally introduced in Berkeley, Calif., in 1916 as a means of preventing a black-owned dance hall from opening, single-family zoning became increasingly popular — though divorced from its explicitly racist origins — as more Amercans moved to sprawling suburban cities across the country. Today, many of the country’s major urban areas reserve 75 percent or more of their residential land exclusively for stand-alone, one-family homes.

Recently, lawmakers in blue states and cities have moved to roll back zoning rules in hopes of spurring more development. Minneapolis became the first major city to ban single-family zoning in 2019. That same year, Oregon passed a similar law statewide. Perhaps the most significant change came in California where the median home price is estimated to exceed $800,000. A new law that eliminates single-family zoning across the entire state went into effect on Jan. 1. None of these reforms make it illegal or even more difficult to build a stand-alone house, they simply remove barriers that prevent any other type of dwelling from being built.

Advocates for eliminating single-family zoning say it’s the most important step toward addressing the housing shortage, since any other programs to spur more development would be moot if there’s no land to legally build on. Supporters say eliminating what they often refer to exclusionary zoning would have wide-ranging benefits beyond just creating more housing stock, including reducing racial segregation and closing the racial wealth gap, boosting job opportunities in urban areas and reducing climate impacts created by suburban sprawl.

Many conservative opponents of these reforms, including former President Donald Trump, have portrayed them as a “war on the suburbs” that would bring big-city problems to quiet communities while doing little to address the underlying causes of the housing shortage. Some argue that financial incentives, not coercive new laws, are the best way to spur development.

A lot of pro-housing advocates also have doubts about how much of an impact zoning reforms on their own will make. They argue that most of the new laws are riddled with exceptions that limit their scope and few also address the long list of other ways that local governments can prevent dense housing from being built — like minimum lot sizes and parking requirements. Some on the left make the case that the only way to increase housing supply at the pace that’s necessary is through strict mandates that require cities to build a certain number of housing units and impose heavy financial penalties on those that don’t.

This would be a hard change to make and capitalize on in many communities. Housing policy in the United States is difficult to change and is rooted in a long history, cultural narratives about success, exclusionary practices, and local governments and other government actors. Yet, even discussion of such a change at least highlights the need in many places to think more about housing and how it could be more accessible to many.

As about any policy possibilities in the United States, I now wonder if what would work best in this situation is for several different kinds of communities across the country to ban single-family zoning and see what happens. What changes in the community? How do residents and newcomers experience it? How does it affect housing values? Does it significantly alter the character of the community? And if there are success stories – which could range from limited noticeable change (that it does not lead to negative outcomes or the end of the suburbs might be good enough) to positive outcomes – then other communities could observe and consider the option.

The importance and consequences of separating single-family homes from other land uses in the United States

A foundational idea in American life is that single-family homes should be located near other single-family homes and away from other land uses, including denser residential units. While this might sometimes be sidelined to the more areas of planning and zoning, I would argue this is much bigger than just allocating physical space: it interacts with significant social, political, and cultural forces and has sizable effects on daily life. I will first describe how we got here before highlighting two examples I saw this week and then noting several important outcomes.

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From at least the mid-1800s, Americans developed ideas about having separate single-family homes among nature. Scholar John Archer examines the idea of “the cottage in the woods” from its roots in English villa houses and into a rapidly urbanizing American landscape. As cities and then suburbs developed, the single-family home became a hallmark of suburban communities where residents had escaped hectic and dangerous urban life. As zoning developed in the early 1900s, it evolved to protect single-family homes from other nearby land uses that might threaten it. Many American leaders and organizations promoted homeownership. Suburban communities and residential neighborhoods became refuges for whiter and wealthier residents who then worked to keep others out. This all helped contribute to residential pockets separate from other land uses and protected by local zoning and land use policies.

This historical legacy and ongoing reality plays out consistently in certain areas. Two examples I ran across in just the last few days:

  1. Affordable housing in the suburbs. Can denser housing that is cheaper be anywhere near single-family homes? This particular project in the Chicago suburbs drew typical complains from nearby homeowners; noise, traffic, change in character for the neighborhood. The developer came back with changes to try to fit in better with the nearby homes but there are still concerns. This makes sense given the American logic of homes and space but this logic is not organic or inherent to the housing itself; it is created.
  2. Why do apartments have to be located on busier streets in American communities? This may have negative effects on the apartment residents and serves to maintain the distance between denser housing and single-family homes. Again, this makes sense given the established American logic but it is possible – and indeed done elsewhere – that you can have quieter residential streets lined with apartments.

Why does this all matter? This separation of housing serves to continue race/ethnicity and class divides, contributing to residential segregation. This changes social patterns as people in different neighborhoods may be less likely to interact, utilize the same civic (such as schools) and private services, and engage politically. Ultimately, it can both shape and be shaped cleavages in society. Location helps determine life chances and Americans start with the premise that homes should be separate.

Chicago aldermen and affordable housing, public housing

HUD is examining the connection between the power of Chicago aldermen over zoning and development in their wards and affordable housing in the city:

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Housing activists and lawyers filed a complaint over aldermanic prerogative with HUD in 2018, alleging that allowing aldermen de facto veto power over most development proposals in their wards promotes housing discrimination by keeping low-income minorities from moving into affluent white neighborhoods.

The complaint against the city alleges that “aldermanic prerogative” helps residents who fear racial change pressure aldermen to block affordable housing projects by publicly raising concerns over school overcrowding, declining property values and other “camouflaged racial expressions.”

HUD officials continue investigating the matter and sent a letter to aldermen Dec. 1 asking them a series of questions about aldermanic prerogative, including how they define the term.

This reminded me of how aldermen helped shape the locations of public housing projects after World War Two. From the Encyclopedia of Chicago:

When Congress passed the Housing Act of 1949, which provided substantial funding for public housing, CHA was ready with a map of proposed sites for projects to be built on open land throughout the city, but the city council rejected this map altogether. White aldermen rejected plans for public housing in their wards. CHA’s policy thereafter was to build family housing only in black residential areas or adjacent to existing projects. This rejection explains the concentration of public housing in the city center on the South and West Sides.

In a city marked by residential segregation, numerous methods for keeping Black residents out of white neighborhoods, and white flight away from the city, the protection of certain areas has been a major emphasis. Affordable housing and public housing are typically viewed as unattractive land uses in whiter and wealthier communities with residents and leaders expressing concerns about property values, safety, and other matters with a sometimes stated and sometimes not underlying factor of race and ethnicity.

The need for affordable housing is great in Chicago, as it is in a number of major cities. But, who will compel neighborhoods or communities to accept that affordable housing should something everyone should bear responsibility for? Outside of some court cases and occasional legislative (Illinois and California as examples) or executive branch rumblings, the deck is stacked against affordable housing for multiple reasons. This includes an American emphasis on local government, particularly concerning local zoning and land use which is often set up to protect single-family homes. Americans often elect local representatives with the idea that they will protect the voter’s neighborhood and way of life.

Less clear from this article is what exactly HUD or others would if they find aldermen restricted affordable housing in the city.

Rising real estate values in affordable markets make it harder to enter that market

Whether reading about rising real estate values in Elkhart, Indiana or Chicago area locations, this has an effect on who can enter the market as homeowners:

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But after prices soared during the COVID-19 pandemic, even the lower-priced homes became out of reach for many low-income households, according to a recent report from the Joint Center for Housing Studies of Harvard University…

In June 2020, a home slightly below the median price was comfortably in that range, selling for $196,450, Hanifa found.

But one year later, a home that was 80% of the median price would sell for $220,562, meaning even lower-priced homes were no longer affordable for low-income buyers.

The loss of affordability was not limited to Chicago. Hanifa found low-income families could afford a home in just 20 of the country’s 100 largest metro areas in 2021, down from 39 the year before…

The hot housing market has had a trickle-down effect on neighborhoods such as Garfield Park, Humboldt Park and Belmont Cragin, he said. As buyers have been priced out of more expensive neighborhoods, they begin looking at a lower or middle-income neighborhoods where they can make offers over asking. Then residents of those neighborhoods can’t afford the homes for sale.

Rising home values are often viewed very positively. Those who own homes can benefit from the increase in prices without much work of their own. Over time, homeowners hope prices go up and they can get a strong return of investment at a sale.

But, this data is a reminder of the flip side of those same rising prices. If prices go up faster than other factors including accessing mortgages and rising incomes, those who want to enter the housing market – and reap the benefits of increasing real estate values – have a harder time doing so.

This dynamic is recognized in particularly expensive real estate markets. When people discuss Manhattan, San Francisco, Seattle, Los Angeles, and a few other locations, people know there is a limited or nonexistent cheaper market for homeownership. This does not come up as often in cheaper markets, often in the Midwest or South, where prices are not as high and there are more options. If prices increase there as well to beyond what lower-income residents could afford, then what happens?

My quick takeaway: the need for affordable housing is great all over the place. If Americans continue to think that homeownership is a laudable goal, there is a lot to do to help make that possible for all.

Who is affordable housing for? Biden Build Back Better edition

The Biden administration includes affordable housing as an important part of the Build Back Better initiative. Under the heading “The most significant effort to bring down costs and strengthen the middle class in generations,” here is how whitehouse.gov describes the affordable housing plans:

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Makes the single largest and most comprehensive investment in affordable housing in history.

The framework will enable the construction, rehabilitation, and improvement of more than 1 million affordable homes, boosting housing supply and reducing price pressures for renters and homeowners. It will address the capital needs of the public housing stock in big cities and rural communities all across America and ensure it is not only safe and habitable but healthier and more energy efficient as well. It will make a historic investment in rental assistance, expanding vouchers to hundreds of thousands of additional families. And, it includes one of the largest investments in down payment assistance in history, enabling hundreds of thousands of first-generation homebuyers to purchase their first home and build wealth. This legislation will create more equitable communities, through investing in community-led redevelopments projects in historically under-resourced neighborhoods and removing lead paint from hundreds of thousands of homes, as well as by incentivizing state and local zoning reforms that enable more families to reside in higher opportunity neighborhoods.

There is certainly a need for affordable housing throughout the United States as well as in specific places. What interests me at the moment here is the references to how this investment in affordable housing will benefit the middle class. The whole package is aimed at the middle class. The introduction states, “President Biden promised to rebuild the backbone of the country – the middle class – so that this time everyone comes along.”

On one hand, affordable housing is important to the middle class. For decades, homeownership has been a marker of being in the middle-class. The postwar suburban housing boom was driven in part by attainable mortgages. This middle-class homeownership is then often related to a number of middle-class goals. Since housing is such a big expense in many household budgets, having cheaper housing enables spending in other areas.

On the other hand, many people need housing assistance, not just the middle class. Middle class is a broad category and some in that group have plenty of resources (this is a little different in high housing cost areas). Housing is foundational need as good stable shelter is connected to a number of other positive outcomes. If this money is aimed at the middle class, will it go to educated young professionals or older downsizers (as it sometimes discussed in suburban communities)? Or, would it be more needed for those who work lower-wage wages or have fewer family and community resources to draw on?

Perhaps the devil is in the details and where exactly this money goes. Or, middle-class here is intentionally broad as many Americans like to think of themselves even if their circumstances suggest they are not and some Americans are averse to resources directed to narrower groups. Regardless, if the plan comes to fruition, it will be worth seeing whether these efforts can make a significant dent in the affordable housing needs in the United States.