Most of the world’s wealthiest cities today suffer from the same ailment: a lack of housing. Simply said, wealthy cities such as New York City, San Francisco, and Los Angeles do not have enough workforce housing to meet the needs of their growing populations.
Rents and housing costs have risen as a result, putting low and middle-income individuals at risk of eviction, forcing the working class into smaller and more crowded quarters, and sapping the wage increases of upper-middle-class professionals.
What are the Causes of Shortage in Workforce Housing in the USA?
Here are a few of the main reasons by Maxwell Drever for the shortage of workforce housing in the larger cities of the USA:
A Majority of People Live Alone
One reason for the workforce housing dilemma is that, compared to a few decades ago, more people are living alone rather than with a partner. Indeed, for many people who value their freedom, living alone has become desirable. Even people who are in relationships frequently live apart because they enjoy being independent. As Maxwell Drever says, people simply want their own home where they can do whatever they want without having to ask their partner’s permission.
In extreme cases, people may even live alone in big mansions with multiple bedrooms, where whole families would normally stay. As a result, each of us requires more living space on average, and the fact that we currently use our living space in an inefficient manner contributes significantly to the scarcity of cheap housing.
Buying Land is Becoming More and More Expensive
When we look back in time, land costs were fairly modest just a few decades ago. However, this has changed considerably in the recent decade, especially in metropolitan cities where land prices have more than doubled in the previous decade. This is one of the most significant reasons for a shortage in workforce housing programs.
Fluctuation in Job Market Conditions
A variety of factors influence local and national market conditions, which in turn influence the availability of affordable workforce housing. The recovery from the Great Recession, during which many middle-income people lost their houses to foreclosure, has occurred at varying speeds across the USA.
Following the foreclosure crisis, mortgage underwriting requirements became more stringent, making it more difficult for prospective homeowners to obtain the necessary financing required to buy a home. During the recession, some of the state’s largest homebuilders also went out of business, leaving fewer businesses to meet the housing demand.
The Final Word
According to Maxwell Drever, while a shortage of workforce housing is a distinguishing feature of modern wealthy cities, it does not have to be such. There is a growing demand for stronger legislation and faster action to address rising housing costs and resolve the issue.
Whether this is successful or not remains to be seen. The COVID-19 pandemic has also had a lasting effect on the construction industry, and it may take a while for the industry to recover fully. Until then, we can expect a shortage in workforce housing to continue indefinitely.