There is a Middle-Income Housing Shortage Too

ULI Terwilliger Center’s 2021 Home Attainability Index shows a lack of attainably priced housing in the 50 most populated markets.

By Kelsi Maree Borland | March 16, 2021 at 06:55 AM     

While most headlines focus on the affordable housing crisis, middle-income housing stock is suffering for low supply levels as well. The ULI Terwilliger Center’s 2021 Home Attainability Index shows a lack of attainably priced housing in the 50 most populated markets in the US. Essential workers have been the most impacted by the shortage.

The shortage of middle-income housing is evident in markets across the nation, but the most populated markets pose the most severe shortages. There was a clear distinction in housing attainability between small and large metros. The top 20 markets with the most severe affordability issues were generally larger markets with a population exceeding 4.2 million people. However, smaller regions with a population between 1.27 million and 2.6 million generally had improved affordability.

It is worth noting that many large markets generally exceed the median of affordable and attainable housing supply, and for that reason weren’t listed as the “worst” markets for affordability. The list includes San Jose, Honolulu, Oxnard, San Francisco, Bridgeport, New York City, Boston, New Haven, Baltimore and Hartford.

The index also analyzed housing equity, both in terms of racial and income segregation. In some cases, high levels of inequity offset housing affordability. The report found that San Diego, Los Angeles, Riverside, Denver, Portland, Stockton, Colorado Springs, Las Vegas and Seattle all struggled with affordability; however, these markets also had better housing equity, meaning that the markets had better racial and income integration than other populated markets.

Other markets had the opposite dynamic with healthy affordability that was offset by poor housing equity. These markets include Toledo, Cleveland, Birmingham, Charlotte, St. Louis, Cincinnati, Scranton, Louisville and Winston-Salem. Ogden-Clearfield, Utah, San Antonio and Pittsburgh all performed well on the index in terms of housing affordability metrics.

Middle-income housing creation is becoming as important as affordable housing. Earlier this year, San Diego-based Civic Community Partners and Norwood Development Strategies partnered to form a middle-income housing development fund. The fund has targeted a capital raise of $100 million from social impact investors, and will provide equity investment for the development of rental housing for residents making 80% to 150% of the median area income. San Diego is one of the top markets with affordability challenges, according to the ULI report. The fund plans to attract social impact investors looking to help generate solutions to housing issues impacting the region.