The Spatial Distribution of Housing (Un)affordability: Evidence from U.S. Urban Areas

Scott W. Hegerty

Department of Economics

Northeastern Illinois University

Chicago, IL 60625

S-Hegerty@neiu.edu��(VERY) Preliminary Results, July 2018

Motivation

• High rent burden: Rent ≥ 50% of household income
• Due to high housing costs, or low incomes?
• Large-city vs. suburban or rural/small city areas
• Main Questions: �1) Which states have the highest proportions of Census tracts with high rent burdens?�2) How do poverty and race differ between these tracts and others?�

Data

• U.S. Census, 2015 (ACS 5-year estimates)

% of Households paying more than 50% of income on rent� (called “% Above 50%” )

• Define “high-rent” tracts where ≥50% of households pay ≥ 50% of income

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• Places: (Population above 250,000 defined as “urban”)
• Tracts: Urban (within large cities) � Suburban (within 30 miles of these cities)� Rural (rest of state)

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Methodology

• Place-level analysis: 79 cities�Bivariate plots vs. home values, income, poverty�“Unaffordability” measure = Median Home Value / Median Income

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• Tract-level: Comparing proportions of “high-rent” tracts

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Little relationship between rent burden and other variables

(Austin, Louisville, Omaha, Pittsburgh, Riverside [CA], Tucson stand out as high-rent cities)

Poor Cities ≠ Unaffordable Cities

• San Francisco�Honolulu�NYC��vs.

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• Detroit�Cleveland

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Tract-Level Analysis: Main Findings

• Highest rent burdens (% of Tracts with ≥ 50% of households paying ≥ 50% of income on rent):�Urban: Michigan, Louisiana, Pennsylvania, Missouri, Illinois, Georgia, Wisconsin, Ohio �Suburban: Louisiana, New Jersey, Florida, New York, New Mexico, Hawaii�Rural(/small city): New York, California
• Larger % of high-rent tracts in urban areas�
• Nationwide: Coasts; also line from NM northward� Pockets of South and rural North

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Number of cases where the % of “high-rent” tracts falls within each range

% Above 50%

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Michigan (Detroit), Louisiana (New Orleans):

🡪Well above 10% of Urban tracts “high-rent”�

Six more states have proportions around 10%

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High vs. Total proportions: Michigan an outlier

• Other states’ urban high-rent areas poorer and less white
• Smaller differences for suburban areas

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…Table 1, cont.

Note Suburban Florida and New York:

High-rent tracts have similar White population but higher poverty

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Contrast with suburban New Mexico: High-rent tracts actually lower poverty

…Table 1, cont.

Note states with small % of high-rent urban areas still exhibit key differences:

Higher poverty rates in all but Kansas

Less white for all but North Carolina and Kansas

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Suburban high-rent areas also poorer in 5 of 8 states listed here

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Appendix: Cities and Codes