America’s Affordable Real Estate Crisis
Unfortunately, the data suggests the affordable housing crisis in the U.S. is only getting worse. So why the disparity, and what role should real estate investors and agents play in creating solutions?
A new report from the National Center on Family Homelessness and coverage by Fox News shows that there were over 2.5 million children homeless in the country last year. However, given these counts are based on the 1.3 million homeless children the Department of Education reports are in public schools, and the difficulty in obtaining accurate counts, there are likely far, far more out there.
Child homelessness rose an estimated 8% year-over-year. The problem is specifically dire in California, which is home to over half a million homeless kids, and 20% of the homeless children in the nation. Mississippi and Alabama have also scored low in trying to fix the issue. Florida has a large share of homeless individuals too. Ironically, the last count put the number of vacant homes in America at 18 million. Even if this number has been reduced over the last few months, it is likely more than those without a home this holiday season.
Unfortunately, it is getting harder and harder to help the struggling. Many organizations desire to help individuals in these situations. It isn’t just about charity either. Helping with basics like food, good food, aiding in job searches, and more are all essential for getting families back on track. Remember their situation means lower income individuals end up paying more for everything; holding them back further.
Press coverage in November 2014 blames this growing issue on a few things: a lack of initiative in providing help from the top and wages not keeping up. A large part of the issue is inflation, which is driving up all living costs, in addition to the price of housing. Cities like Miami epitomize this disparity. Miami, FL is both considered one of the wealthiest cities in the world, and is home to a large concentration of billionaires. Yet, it is also one of the most impoverished cities in the U.S., with a large percentage of the population living on just a few dollars a day.
Unfortunately, many landlords haven’t been highly motivated to make rentals more affordable or accessible. In fact, many have been almost been going over the top in the opposite direction just as mortgage lenders have in restricting access to credit. Demand for deposits, credit, upfront money, and income documentation to get into many rentals has far exceeded what it takes to get a mortgage loan. There is nothing wrong with landlords maximizing profit. However, all should find a way to invest in affordable housing, and alleviating the affordable housing crisis alongside whatever else they are doing. Affordable housing can provide many rewards and can be profitable for all sides. But for those not drawn to it there are many ways to support solutions including volunteering and donating.
Still, all investors need to be aware of how major shifts to new areas, and in turn shifts in commerce and job creation could drive to growth in new areas, and could temper growth in other areas.