The United States is facing an extremely affordable housing crisis problem. Despite the income of the households, everyone is affected by it. Studies found that low-income families are working 40 hours a week and paying more than 50% of their monthly income on rent. This is why they are the most cost-burdened.
As the renters pay nearly half of their salary on rents, they are heavily cost-burdened. Even some high-income families living in expensive cities are facing problems while paying rent. More than 20% of renters cannot purchase a home due to their financial instability. Additionally, their savings cannot even cover the down payment. The price of housing increases and the crisis of affordable housing in the United States is affecting every other aspect of the country. Continue reading the article to know more about the affordable housing crisis in the United States.
The Increasing Costs of Materials and Labors Are Also Making the House Development Process Expensive
The manufacturers and home developers charge a specific premium on top of the basic costs of labor and materials. The BLS tracks the raw materials costs as well as the price index of the producer, which has increased more than 25% since the financial crisis in 2008.
The Costs of Construction Materials
The cost of lumber, which is one of the most important construction materials, has fluctuated rapidly for the past couple of years. Now the cost of lumber is twice that of price was in 2008. The lumber implements anywhere from 10-15 percent of the overall developing cost of a house. Maxwell Drever stated the increasing cost of the limber is due to the trade dispute between Canada and United States. More than 30% of the limber used during the residential construction arrives from the northern neighborhoods, and that supply has been affected heavily by the mountain pine beetles, which are extremely capable of killing trees within 48 hours.
Another significant factor is the enhanced price of underdeveloped land in the urban areas, where the demand is high and work is extremely concentrated. Many developers and home builders have started developing high-end, luxurious, and expensive houses. This means that developers are focusing less on building affordable homes. Even if they build affordable homes, the cost of the home expands as the demand is greater than the supply.
The Cost of Construction Laborers
Even though the unavailability and cost of housing materials are one of the most common causes of the affordable housing crisis in the United States, the shortage of persistent labor is another thing that is causing significant damage to the affordable housing market, said Maxwell Drever.
The developers are facing tremendous economic pressure and profit loss due to the unavailability of laborers. This is why they are focusing more on luxurious apartments than the affordable housing market.
More than 80% of the organization members believe that the availability and cost of the proper labor is the biggest issue while developing housing. Even though construction is undoubtedly one of the greatest sectors in the United States, it still hasn’t fully recovered from the Great Recession.
If the United States government doesn’t take appropriate measures to solve the affordable housing crisis, America will face a great financial crisis in the future.