HomeHousing Deficit

Deficit Impacts mostly Low wage workers

The lack of affordable housing has severely impacted the quality of life for low-wage workers. With housing costs rising faster than incomes, many full-time minimum wage workers cannot afford decent housing without spending over 30% or even 50% of their income on rent 1. This leaves little money left over for other basic necessities like food, healthcare, and education 3. As a result, low-wage workers often face difficult tradeoffs and financial stress trying to balance housing costs with other expenses 4.

store clerk

"The failure of  The Department of Housing and Urban Development in outlawing pure speculation in the housing market has led to this criminal condition"

Paul Larson


Unaffordable Housing costs the US $1.7 trillion/year

The lack of affordable housing near job opportunities further hinders economic well-being for low-wage workers. Long and costly commutes in search of cheaper housing cut into income and savings 3. Limited affordable options near growing job centers also reduce economic and wage mobility for low-wage workers 11. Overall, the shortage of affordable housing near jobs is estimated to lower national output by $1.7 trillion by constraining worker migration toward higher-wage employment 11.

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Housing imbalance

Undersupply = Deficit

The housing deficit has been driven by an undersupply of new construction failing to meet demand (1), alongside rising construction costs (1). Additional factors like investors reducing housing inventory (1) and zoning restrictions limiting building (3) have compounded the shortage.

These constraints help explain why regions like the West Coast with strong job growth have faced more severe housing shortfalls (3). Housing permits haven't kept pace with economic expansion. This trend of lagging supply amid booming demand is a root cause of swelling price tags nationally.


The housing supply crunch has impacted affordability, geographic mobility, wealth inequality, health, and sustainability:

  • Affordability: With inflated home values and rents, housing now consumes over 30% of income for a majority of US households (7). For minimum wage workers, average rents exceed livable budgets by over $600 per month (8).
  • Mobility: Expensive housing has reduced migration between states, as moving requires assuming higher costs of living (9).
  • Inequality: Homeowners have accumulated wealth through appreciation, while renters face soaring costs eroding savings (10). This divide is especially stark along racial lines.
  • Health: Overcrowded housing and homelessness resulting from unaffordability raise COVID risks and worsen outcomes (11).
  • Sustainability: Long commutes undertaken for cheaper shelter increase transport emissions and undermine climate goals (12).
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Regional map

Regional Variations

  • West Coast: With vibrant job markets pulling in migrants, cities in California, Oregon, and Washington have contended with swelling housing demand alongside staunch NIMBY opposition and density restrictions limiting supply (4). Rents and home values have skyrocketed accordingly.
  • Sun Belt: Faced with an influx of domestic migration, states like Texas, Florida and Arizona have also witnessed housing supplies tighten and prices escalate. However, lighter zoning regulations and cheaper land have moderated cost growth compared to the West Coast (13).
  • Rust Belt: Weaker economies and population declines in Midwest/Northeast regions have softened housing demand and kept market balance closer in check. However, aging housing stock and higher poverty still pressure low-income households (14).


The United States is experiencing a significant housing deficit that disproportionately affects low-wage workers, with serious implications for the economy, public health, and social equity.

  1. Affordability Crisis: Low-wage workers are the hardest hit by the housing shortage as rising costs outpace incomes, forcing them to allocate an unsustainable portion of their earnings to rent. Consequently, these workers struggle to afford other essentials such as food, healthcare, and education, which exacerbates financial stress and diminishes their quality of life.

  2. Economic Costs: The scarcity of affordable housing near employment centers impedes economic growth and worker productivity, with estimates suggesting a potential reduction in national output of up to $1.7 trillion due to constrained worker mobility and access to higher-wage jobs.

  3. Supply Shortage: The root of the housing deficit is a chronic undersupply of new construction that fails to keep up with demand, exacerbated by rising construction costs, investors buying up housing inventory, and restrictive zoning laws. This issue is especially pronounced in regions with strong job growth, such as the West Coast, where economic expansion has not been matched by sufficient increases in housing permits.

  4. Widening Inequality: The gap in wealth accumulation between homeowners and renters is growing, with homeowners benefitting from property value appreciation while renters experience rapidly increasing costs that erode their savings. This disparity is particularly pronounced along racial lines, contributing to broader socio-economic inequality.

  5. Health and Sustainability Concerns: The housing supply crunch contributes to negative outcomes in public health, as seen in the risks faced by those in overcrowded housing or homelessness, exacerbated by the COVID-19 pandemic. Additionally, the necessity for longer commutes due to a lack of affordable housing near job centers undermines climate goals by increasing transportation emissions.

  6. Regional Disparities:

    • In the West Coast states like California, strong job markets attract migrants, leading to soaring demand that density restrictions and NIMBY opposition fail to meet, causing rents and home values to rise steeply.
    • The Sun Belt states such as Texas and Florida also face tightening housing supply and rising prices due to domestic migration, but to a lesser extent thanks to more relaxed zoning regulations and lower land costs.
    • Rust Belt regions in the Midwest/Northeast exhibit a more balanced housing market due to lower demand, yet still face challenges with poverty and aging housing stock affecting low-income households.

Addressing the housing deficit will require a multi-faceted approach that considers the diverse regional challenges and aims to increase the supply of affordable housing, mitigate rising costs, and create equitable opportunities for wealth accumulation among all citizens.

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