A big focus on unaffordable housing is on the price of homes and the cost of rent. However, wage stagnation is another important factor that contributes to unaffordable housing. In $2.00 A Day, Kathryn Edin and H. Luke Shaefer write, “rising rents are certainly a big part of the problem, but the concurrent fall in renters’ incomes has outstripped the rise in prices by a factor of more than two to one.” There is a double housing squeeze being felt across the nation as the price of housing increases while wages either stagnate or decrease, especially when considered relative to general inflation indexes.
Rising home costs are often attributed to zoning regulations the prevent building sufficient housing to meet the needs of a city or population. Zoning laws restrict the building of duplexes and apartment complexes. Some zoning laws require ample parking space, cutting down on potential living space. And some zoning prevents infilling with more high density housing that would allow more people to move to the area. The results are limited housing options and higher prices for sought after units.
As wages stagnate, this becomes a serious problem. People search for sectors with higher wages and more opportunities for advancement. Such opportunities are often found in cities, however that is where the highest competition for housing exists. So individuals seeking higher wages have to contend with higher housing prices. The alternative is often accepting a stagnant wage and living further away from work than one would like, because that is the only place affordable housing can be found.
This double squeeze creates a lose-lose situation for low income individuals. If they move to a city they may find better work opportunities, but they will pay more for less space. But if they don’t move, they will either face a very long commute or a job closer to their home that pays less and has no opportunities for advancement. Housing is a major issue, and unaffordable housing has a whole cascading series of negative consequences.