As inexpensive housing promoters and developers try to increase and make improvements to moderate-income and low-income housing units throughout the U.S., these people consistently hear the same comments about how no more low-income housing is actually needed. Since home prices have dropped so dramatically within the last few years, and there is a great deal of houses available on the market, individuals believe that there is absolutely no need to continue building anymore new low-income houses. Nevertheless, there still is a demand for this type of housing.
Though particular business sectors (such as the service industry) have experienced wage reductions ever since the beginning of the economic downturn, the average household earnings in the U.S. is really higher right now than it had been prior to the recession. A few debate that it is caused by significant increases in earnings among the affluent, and does not correctly reflect what is happening to families with low to moderate incomes.
The most recent data from the U.S. Census Bureau, gathered in 2010, showed that over thirty-one percent of families are viewed as “low-income,” making around $25,000 and $45,000 annually for a family of four. It is has now been three years in a row where that figure has gone up. Right now it is at the highest level it has ever been at during the past ten years. Almost fifty percent of all Americans (146.4 million individuals) live below the $45,000 level, with practically fifty million people living under the poverty line.
So, although it is correct that home prices have dropped, more individuals are making less money, with most family incomes dropping in proportion to property prices. The outcome is two-fold: 1) real estate which was unattainable for low-income families prior to the recession is still unattainable, and 2) moderate-income families now have less disposable income, which makes it more difficult for them to save so they will have enough funds for the down payment on a house.
Additionally, lending institutions have stricter lending rules, necessitating more funds for a down payment along with better credit scores for individuals trying to get mortgages. For the few low-income families that qualify for a home mortgage, the houses they could afford to pay for are frequently damaged and unlivable. The drop in housing prices has had a direct effect on rental prices, too, pushing them up as individuals stay away from the previously thought to be “safe” investment of buying a home and choose to rent an apartment or house instead.
Because of this, affordable housing is nonetheless much needed. So the question “Do we really need more?” might be annoying, it provides a good possibility for supporters and developers to teach individuals concerning the truths about the low-income housing sector.