According to data compiled by the Federal Reserve Bank of St. Louis, October saw a total of 737,480 housing units for sale across the U.S. And while that is an improvement from the 691,296 homes listed for sale one year earlier, it is significantly lower than the 1.23 million in pre-pandemic 2019 or the 822,207 in July 2020, when the pandemic was taking root.
While there are fewer homes for sale, the prices for the properties on the market are at historic highs. Realtor.com’s most recent data put the U.S. median home price at $430,000 during September, up 0.4% year-over-year.
In Connecticut, housing (or the lack thereof) is a major concern.
“It’s no secret that we have a shortage of housing,” said Connecticut Department of Housing Commissioner Seila Mosquera-Bruno. “And it’s not only recently. It has been a problem for many, many years. For decades we have not invested much in affordable housing and if you add to that what has been the news about having 57,000 people moving to Connecticut after the pandemic of course we’re going to have the need for more housing.”
Mosquera-Bruno noted that the state’s efforts since she took office in 2019 have emphasized adding units for households earning between 30 and 80 percent of their local median incomes.
“We completed over 10,000 units in the first four years of the administration and right now we have over 4,000 units under construction, so our focus is to continue building more housing that is affordable to those in lower brackets of income,” she explained.
Connecticut is not alone in feeling the pain of a shortage of affordable housing. Andrew Aurand, vice president of research at the National Low Income Housing Coalition, described the housing shortage faced by Connecticut as part of a larger trend of unaffordable housing across the entire country, particularly for renters or home seekers with low incomes, adding the situation can be compared to “triage” where limited resources need to be directed to those most in need.
“The general housing market is where we really need communities to open themselves up to more rental housing, or at the least communities that currently prohibit it or make it difficult to construct, we need to open up to the incentives of lower income renters,” Aurand said. “But most localities don’t have the resources to solve the problem on their own, we see federal resources as being very important, whether it be the National Housing Trust Fund or more investment in rental assistance or housing choice vouchers that provides extremely low-income renters with a way to find and afford housing in the private market.”
Aurand added, “No community has an adequate supply, mostly because the private market really can’t serve those low-income renters all that well. The lowest income renters can’t afford to pay a rent that provides landlords enough to maintain their properties, so the private market doesn’t reach out for the lowest income renters. At the same time, we don’t put enough resources into our housing assistance programs to help renters afford housing. So, every system pretty much fails them – the private market fails them and many of our subsidy programs that might help them, but we just don’t adequately fund them.”
Aurand pointed to his organization’s recent “Out of Reach” study revealing what workers need to make per hour to afford even basic housing.
“The hourly wage for a full-time worker to afford even a modest one-bedroom apartment within their own county in Connecticut, on average that hourly wage is $25.90 [$53,872 per year] at a fair market rate,” Aurand explained. “If you think about the types of occupations and what people earn, there are a lot of occupations that pay less than that. It’s a significant mismatch.”
According to Aurand, while the problems of housing affordability and availability are impacting a broadening swath of income levels the challenges it poses are not evenly distributed. A retired couple seeking to capitalize on a high housing price by downsizing may not be able to find a good deal on a home to move to, but a low-income renter does not have the choice to simply wait for market conditions to improve, especially if they are already struggling to make ends meet. A lack of homes for sale also increases demand for available rental housing, exacerbating the issue further.
The impacts of the continued housing shortage extend beyond those who are shouldering the burden of untenable rent as well. Businesses can also experience hiring difficulties and customer shortages as a result, according to Michelle McCabe, the executive director of the Connecticut Main Street Center.
“We’re a statewide nonprofit that works with large and small communities across the state on revitalization and maintaining vibrancy of downtowns, main streets, and village centers in each of these communities,” McCabe explained. “And housing is definitely a concern because downtown businesses in particular rely on a variety of workers to be able to open and to be able to thrive. The harder it is for workers to get to a location to work, then the harder it is for those businesses to have workers. This is definitely a big challenge that is affecting municipalities across the state.”
“For example,” she continued, “one restaurant owner I was speaking to recently was telling me that his workers live in a town pretty far from where his restaurant is located, and they all commute in together. But one day the person with the car was sick so four people couldn’t come into work because there weren’t really public transportation options in that area of the state. I’ve heard this story in other places, restaurants shutting down like a lunch shift because they can’t get the workers, and it’s the same for retail as well. It ends up being this vicious cycle.”
As workers need to look for housing they can afford further and further from where they work, they wind up spending more and more on transportation, and losing off-work time to their long commutes. Both of those factors eat into their ability to, in turn, patronize other businesses.
“It’s restaurants, it’s retail, it’s teachers, it’s preschools. If you look at all the sorts of types of job there are and what they typically pay you start to realize there’s this enormous group of people that are all getting priced out of housing for jobs that need to be filled in these communities,” McCabe said.
Meanwhile, she noted that denser, more walkable areas that comprise the state’s traditional main streets were able to better bounce back after the pandemic thanks to an in-built consumer base and were attracting increasing attention.
“People are interested in moving downtown, but you have to have housing for them,” McCabe said, noting that a diverse range of housing is the best way to provide that. “We want to see a variety of both what the housing is and who can afford to live in it, because like a monoculture in agriculture it’s not healthy for an ecosystem to be just one thing. It’s diversity that’s the healthiest option for an ecosystem and we need to view our main streets as an ecosystem and understand how all these things affect it.”
