Housing Affordability
The housing market relies on demand. A high demand tend to increase rent rates. This correlation explains the reverse relationship between housing and job growth. In most towns where people are able to secure jobs, rent arrear remains at an all-time high. A job implies a reliable salary but this does not translate into affordable housing. It only means that people will drive the demand due to a ready market. A higher demand ensures that landlords control the pricing (Mulliner, Smallbone, & Maliene, 2013). Consequently, most people on full time employment may not easily find proper housing in towns where employment is high. Furthermore, a situation where housing is expensive due to high demand, policy makers have always ensured that the people are focused on creating alternatives such as subsidized housing. Even though housing market growth varies from one region to another, the housing sector may negatively impact the economy as a high housing increase living expenses hence a region might fail to be attractive to dwellers.
Apart from high employment rates increasing rent rates, unaffordable housing stems from two factors. The first factor is that housing consumes a larger portion than other items in the budget in most communities. For instance, one household may spend a quarter of their total revenue on housing costs while people living in abject poverty may set aside a half of their salary on housing (Mulliner, Malys, & Maliene, 2016). The second factor is the popularization of metropolitan regions hence an increase in housing as people move into the metropolitan regions. Most of the times, housing affordability is controlled through policy making. However, economists claims that housing affordability is relative and insist on the delivery of housing quality and income hence giving people that ability to borrow loans or even own housing facilities.
References
Mulliner, E., Smallbone, K., & Maliene, V. (2013). An assessment of sustainable housing affordability using a multiple criteria decision making method. Omega, 41(2), 270-279.
Mulliner, E., Malys, N., & Maliene, V. (2016). Comparative analysis of MCDM methods for the assessment of sustainable housing affordability. Omega, 59, 146-156.
