Q: What’s driving rent increases across the US in 2022?
A: One significant factor is new home growth isn’t matching economic growth. If you look at statistics from the 1970s, the number of new houses (both for rent and sale) was keeping up with job growth. Since supply and demand were balanced, rent prices were affordable. In contrast, the 2010s saw high growth in new jobs — while growth of new housing plummeted, subsequently driving rent increases.
Q: How do barriers to building correlate to affordability?
A: In a study on exactly that subject, we measured factors like how long it takes for the entitlement process, the number of fees, and how many meetings it takes for things to get off the ground. Our findings revealed cities with more barriers to building are generally less affordable than cities with fewer barriers.
Q: What are some other economic factors affect housing affordability?
A: We looked at data from the Economic Policy Institute on the affordability of food, healthcare and transportation across the US. The data showed areas like New England (where it’s harder to transport food) have higher food costs, while states like West Virginia have higher healthcare costs due to older demographics. And all of the US is experiencing high transportation costs, attributed to the rise in gas prices, along with overall costs of automobile ownership.