A long-term trend of housing underproduction exacerbated by rising inflation and economic uncertainty threatens home attainability for millions of people across the United States, according to the 2022 Home Attainability Index, a comprehensive new study from the Urban Land Institute’s Terwilliger Center for Housing.
The 2022 Home Attainability Index provides a high-level snapshot of the extent to which various markets are providing housing choices attainable to regional workforces, with an intentional focus on racial, socioeconomic, and regional disparities and inequities.
The Index also explores the implications of shifts in housing demand and regional competitiveness due to demographic changes, pandemic-influenced employer and employee location decisions, and the high cost of building and finding homes in the largest and most economically vibrant regions.
Though a common perspective is that demand is shifting, conflicting data and perspectives exist on the magnitude of shifts and the extent to which they are durable or temporary responses to the chaos of the past several years. This uncertainty is compounded by questions regarding the reliability of census data collected during the pandemic.
Amid these challenges, the Terwilliger Center approached the 2022 Home Attainability Index research process with two objectives:
- Separate the signal from the noise, with analysis focusing on issues less subject to short-term fluctuations and where solid data are available.
- Consider the potential implications of various market-shift scenarios, using market sentiment insights from ULI’s Emerging Trends in Real Estate® 2022 report.
Based on this analysis, the Terwilliger Center identified the following high-level findings:
- Few available housing units of any kind, even modest rental units, exist that are affordable to many low-wage workers in most regions. High cost burdens leave less residual income. In the current high-inflation environment, many households will face heightened economic insecurity, particularly when these factors are combined with high energy costs, which affect utilities and commuting expenses. Left unchecked, these factors could raise the risk of homelessness for many households.
- Long-term housing underproduction is a primary driver of national housing challenges, and current market conditions—economic uncertainty, rising inflation, high costs of materials, high labor costs and limited worker availability—are likely to further restrain the market from “catching up” to meet demand. Anecdotal evidence suggests some builders are already pulling back in response to these pressures.
- While the national housing production shortage matters, shortfalls at the regional level are even more important. A lack of attainable housing in established markets is a contributing factor in some employers and households deciding to relocate to lower-cost markets.
- While still offering a larger supply of attainable housing, many of these growing regions have not demonstrated that they can produce enough housing of the right type in the right locations (the “dimensions of supply”) to keep these markets—or submarkets therein—from following the trajectory of more established, high-cost markets. Staying ahead of the curve is crucial: regions falling behind can lead to other market distortions that raise the cost of developing new housing and further exacerbate the challenge.
As time goes on, it will be critical to examine the available data to see which of the trends of the past several years are durable and start to address some of the nuanced shifts in demand. However, today’s market is largely reflective of the conditions of not just the past two years, but also the preceding two decades. Attainability challenges require durable, systemic solutions with a focus on attacking the critical, longstanding challenges of adding new supply across all dimensions, preserving existing affordable housing, addressing entrenched socioeconomic inequities such as segregation, and providing subsidies and supports to those households that the market cannot or does not reach.
Since the release of a pilot edition of the Index in 2021, the ULI Terwilliger Center has worked with a national cross-sector group of partners, including the National Housing Conference (NHC) and National Low Income Housing Coalition (NLIHC), to expand and improve the resource. In addition to a summary report covering the above issues, this year’s update includes enhanced data tools to help local and regional stakeholders better understand housing market opportunities and needs. The enhanced data tools are:
- An interactive data spreadsheet—new regional profile page, comparison page, Occupational Analysis summary, and complete data for the 112 regions and 18 household/occupation combinations included in the Core Index dataset;
- An online mapping platform with enhanced geospatial visualization of core index data, hosted by PolicyMap; and
- A supplemental spreadsheet with index and Occupational Analysis data for more than 300 additional metropolitan regions and 140 additional occupations.
The data can help:
- Identify gaps in home attainability and provide better context to understand residential markets;
- Provide context by connecting housing costs to the wages earned by people with specific occupations in a region through an Occupational Analysis (based on data from the National Housing Conference’s Paycheck to Paycheck database);
- Explicitly identify and highlight racial, socioeconomic, and intraregional disparities and inequities; and
- Enable national and regional comparisons to inform housing production, policy, and financing decisions.
The summary report of the 2022 Home Attainability Index can be found on ULI’s Knowledge Finder platform. To view a webinar exploring the findings of the report, click here. Speakers at the webinar include:
- Michael Spotts, Index author and senior visiting research fellow at the ULI Terwilliger Center for Housing.
- Jill Ferrari, managing partner at Renovare Development.
- Lisa Vatske, division director at the Washington State Housing Finance Commission.
- Dana Schoewe, principal at RCLCO.
To download the interactive spreadsheet featuring core data from the Index, click here. For all metropolitan statistical area data, click here.
The online mapping platform provided by PolicyMap can be found here. Instructions on how to use the mapping tool can be found on the ULI Knowledge Finder summary page here.
