From Pacific Standard

The cost of housing continues to rise in markets all across the country and Austin is no exception. A recent analysis of data from the Harvard Joint Center for Housing Studies shows that from 1960 to 2016, inflation-adjusted rents increased 61 percent and home values have increased 112 percent. In that same time-period, however, renter household incomes have increased a mere 5 percent while homeowner incomes have increased just 50 percent.

Individuals and households are severely cost-burdened with housing costs, meaning they pay more than 30 percent of their income on housing, making it difficult to save, pay for healthcare, food, childcare, and other necessities, which in turn stunts economic growth and movement. The Urban Institute recently released a report that substantiates the notion of the affordable housing crises’ impact not just on individual households, but also a negative impact on the economy by showing how the issue is  impacting the labor market by making it difficult for businesses to hire the workers they need to serve the market in which they reside.

When workers are forced out of neighborhoods in close proximity to these mostly service oriented jobs due to rising rents, it contributes to what researchers are calling a “spacial mismatch” — zip coes with an oversupply of either job postings or job seekers. The Urban Institute used Snag, one of the largest online job search sites for hourly workers, to study the distance between job seekers and jobs they applied for in 2017 across 16 metropolitan statistical areas (MSAs).

Researchers concluded that “spacial mismatch” is common across all of the MSAs they studied. In Austin specifically, most regions had too many job seekers and not enough jobs.

The chart below illustrates the mismatch:

The data shows what affordable housing providers have been saying all along, that when housing costs push workers too far from available jobs, business and the economy overall suffer.

“I think that what this shows is that this issue is not important just for the individual or the job seeker or the household that can’t afford to live there,” says Christina Stacy, one of the authors of the feature. “You need people to work at the coffee shop or the restaurant. And if you don’t have a vibrant and diverse population in these neighborhoods, you’re not going to be able to find employees in a lot of these neighborhoods.”

What’s worse, developers are hindered in their ability to deliver the  amount of housing needed to push prices back down to an attainable level — much of the time due to government policy that restricts the type of housing that can be built and were. Restrictive zoning, while popular with homeowners, is restricting the housing supply needed to impact the stock of affordable housing in cities where jobs are most plentiful. In a forthcoming paper in the American Economic Journal, economists Chang-Tai Hsieh and Enrico Moretti examine the economic effects of spatial mismatch across United States cities (rather than within cities, like the Urban Institute). They estimate that strict regulations in places like New York and San Francisco “lowered aggregate US growth by 36% from 1964 to 2009.”


Founded in 1997, the Texas Affiliation of Affordable Housing Providers (TAAHP) is a non-profit trade association serving as the primary advocate and leading resource for the affordable housing industry in Texas. Our vision is to inspire and engage our members and stakeholders to end the affordable housing crisis in Texas.

Contact Us

221 E. 9th Street, Suite 408
Austin, TX 78701

TAAHP

TAAHP

Phone: 512-476-9901 | Email: info@taahp.org

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