Abstract:
This paper will use the American Housing Survey to examine housing behaviors in the U.S., particularly among low-income households, over the last two decades. My focus is housing consumption and its costs.
Several researchers have recently pointed out that the extent and even definition of the "affordability problem" is far from clear (Linneman and Megbolugbe, 1992; Hulchanski, 1995; O'Flaherty, 1996). In part the difficulty for policy analysts is that affordability is a reduced form measure of both supply and demand factors, like any market-determined price, rather than a simple and meaningful measure of need. For home buyers the confusion is somewhat worse, given the central roles of mortgage interest rates in determining housing cash flow, of property appreciation rates in determining net wealth effects, and of the down-payment constraint and credit history generally in determining access to financing.
However, there is little comparative detailed knowledge at both national and local scales for low-income households in the metropolitan areas of the U.S. in recent years. Among the merits of the American Housing Survey for this purpose, beyond its panel structure and large sample size, are that data for 2005 are available today. I therefore plan to carefully examine and explain low-income housing trends in central versus suburban settings for all major metropolitan areas from 1985 to 2005.
In addition to tracking interesting trends, over time and space, I will estimate panel models of housing consumption in order to explore the respective roles of alternative explanatory factors.
