Although many cities across the country are facing serious housing shortages, the efforts they are making to fix the problem are doomed to failure. Their so-called affordable housing programs address symptoms, not causes, and apply band-aid solutions when far different (but less costly) tools are needed.
Median home prices in most American cities are less than three times median family incomes, but in some cities they are five to ten times incomes. Under current mortgage rules, you can pay off the loan on a house that costs three times your income in less than 15 years, but a home that costs more than five times your income will take more than 30 years to pay off. Since most mortgages are limited to 30 years, this means housing has become unaffordable.
A full range of housing affordability can found along Colorado’s Front Range. According to the latest data from the Census Bureau’s American Community Survey, median homes in Pueblo cost less than three times median incomes. In Colorado Springs, they are slightly more than three times. In Denver and many of Denver’s suburbs, they are around four-and-a-half times incomes, while in Boulder they are more than six times incomes. To make matters worse, a median home in Boulder was nearly 10 percent smaller than one in Pueblo and 15 percent smaller than one in Colorado Springs.
Read the whole article originally published in The Hill on June 26, 2018.