Fastest-Growing Metros Losing Affordable Housing at Rapid Rate
The fastest-growing cities in the United States saw substantial declines in affordable housing units between 2010 and 2017, said Freddie Mac, McLean, Va.
The 10 fastest-growing metros among large cities saw 15-plus percent average population growth during that time, while the number of units affordable to very low-income residents declined by more than a third, Freddie Mac Vice President of Multifamily Research and Modeling Steve Guggenmos said. In metros with 5 percent population growth the average loss in very low-income rental affordable units was about half that amount.
“Cities that have experienced aggressive population growth have struggled to build enough rental housing to meet the increased demand,” Guggenmos said. “The problem continues to get worse, and every year more very low-income families are forced to spend more of their income on housing.”
Guggenmos noted the challenge appears most strongly where population growth is rapid. “The laws of supply and demand are showing their teeth, and the people who can least afford it are getting bit,” he said in the Freddie Mac report Diminishing Affordability – Inescapable.
The report found a “strong correlation” between population growth and affordability loss, Guggenmos said. “The findings are very convincing,” he said. “If these two variables were in fact not related, the chance of observing a result this extreme is about one in seven million. The data show that population growth is strongly correlated with affordability loss.”
Freddie Mac researchers cited several areas where the correlation between population growth and affordability loss was most striking. One example was Austin, Texas, where the population grew more than 22 percent over the period studied. “What’s most concerning is that the loss in affordable housing units happened even though Austin’s supply of multifamily housing grew,” Guggenmos said. “Nearly a quarter of Austin’s units were built after 2009 and a high percentage of these new units are not affordable for very low-income renters. Like a lot of cities, they just can’t keep up.”
In 2010, Austin had a higher proportion of multifamily rental units affordable to very low-income households than the U.S. as a whole at 66 percent, the report noted. By 2017, that proportion had dropped to 31.9 percent–seven percentage points lower than the national average.
“Although rapid population growth is generally an economic blessing, the adverse effect that it can have on an area’s affordable housing stock is not trivial and should not be overlooked,” Guggenmos said.
