Before the introduction of the COVID-19 pandemic, the United States was experiencing a massive affordable housing crisis. Unfortunately, amidst the economic crisis process during the pandemic, the affordable housing crisis has become worst. As the COVID-19 has affected every country in the world economically, the number of unemployed Americans is increasing and many of them are facing long-term unemployment issues. This might bring severe consequences regarding the financial obligations including mortgage payments and rents.
Even though the recently implemented mortgage and rental programs help the people who are facing financial problems due to their unemployment during the pandemic to reduce their mortgage or rent payment, millions of unemployed Americans are facing problems to cover their basic living expenses. As per reports, another crucial factor that will worsen the situation of the affordable housing crisis is the increasing number of people finding affordable housing solutions.
The inflation and economic shutdown with massive unemployment rates and lack of affordable housing solutions develop a complicated scenario to solve. This is because the solutions for some specific problems are exacerbating the others. For instance, housing security is one of the biggest problems in the United States, despite the decreasing unemployment rate and economic growth. Therefore, if Government wants to solve the affordable housing crisis, they need to determine its underlying causes.
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Affordable Housing Supply Shortage
One of the most underlying costs of the affordable housing crisis is the extreme shortage as well as the demand for affordable housing options. Only 35% of low-income families and high-income families have access to affordable housing solutions. However, more than 7 million affordable housing needs to be built to meet the demand. Even though the demand for affordable housing is increasing, developers haven’t built affordable homes to meet the expectations. While major cities in the United States have adapted to land-use regulations and zoning ordinances, builders complain regarding the shortage of laborers. Apart from that, the people who don’t have a home are also downsizing as before. This not only limits the home circulation of the market but also enhances the problem of the housing shortage, added Maxwell Drever.
Most Americans are Facing Cost-Burdened
Two primary factors make people cost-burdened: low wages and building standards. Low wages force people to spend more than 60% of their income on house rents and other types of housing necessities. On the other hand, the building standards increase the overall price of a new home. When people spend a massive chunk of their monthly salary on housing, they won’t have enough money left to cover the other expenses such as healthcare, food, clothes, transportation, etc. Even though the number of-burdened homeowners have been decreased, the number of cost-burdened renters has been increased over the past few years. This is why owning a home will reduce the cost burden of the house, once the loan is paid off, says Maxwell Drever.
The Solution to Affordable Housing Crisis
Factory-built housing can undoubtedly bring a solution to the affordable housing crisis by developing more affordable homes. This will help people who are depending on their daily wages massively. Apart from making the homes affordable, renters or homeowners should make the homes much more energy efficient so that they can save money on the electricity bill.
As mentioned earlier, the affordable housing crisis is undoubtedly one of the biggest concerns in the United States. However, Government and other builders are taking necessary actions to provide affordable homes to lower and middle-income families.