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Are you interested in urban housing affordability?

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Our summary today works with the article titled A fresh look at contemporary perspectives on urban housing affordability from 2021 by Marietta E. A. Haffner and Kath Hulse, published in the International Journal of Urban Sciences.

This is a great preparation to our next interview with Jennifer Borrero in episode 290 talking about how housing affordability can be achieved through real examples.

Since we are investigating the future of cities, I thought it would be interesting to see what housing affordability issues are and how we can understand them better. This article presents the history and norms of housing affordability and highlights the shift from the physical to the policy side.

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Welcome to today’s What is The Future For Cities podcast and its Research episode; my name is Fanni, and today I will introduce a research paper by summarising it. The episode really is just a short summary of the original paper, and, in case it is interesting enough, I would encourage everyone to check out the whole paper. This is also an experiment as I produced and generated the summary part with Notebook LM as two hosts dissecting the whole report.

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Speaker 1: Today we’re going to really get into urban housing affordability. I think it’s something we’ve all been thinking about lately.

Speaker 2: Definitely a hot topic.

Speaker 1: And you sent over this research paper from the International Journal of Urban Sciences, a fresh look at contemporary perspectives on urban housing affordability.

Speaker 2: Yeah.

Speaker 1: It seems like a really in depth look and I’m excited to talk it through with you.

Speaker 2: Yeah, it’s super comprehensive and it really traces how our understanding of affordable housing has changed over time.

Speaker 1: Yeah, it seems like it’s not just crunching the numbers anymore. There’s a much bigger story about it. Where we live and how much it cost us.

Speaker 2: Definitely. And it might surprise you to know that this whole conversation starts way back in the 19th century. Wow. With researchers like Engel and Schwab.

Speaker 1: These guys were pioneers in studying cost of living in poverty over in Europe. So they were already thinking about this stuff even before cities became the huge hubs they are today.

Speaker 2: Yeah, absolutely. Engel is actually famous for Engel’s Law. Which basically says that as a family’s income decreases, the proportion of their income that goes towards essential things like food increases.

Speaker 1: Because you have less money overall, so your basic needs take up a bigger chunk.

Speaker 2: And then Schwab, he focused more on housing costs and found that the proportion of income spent on housing actually increased as income decreased, which sadly we still see today.

Speaker 1: Yeah, that’s pretty wild to think about that some of these basic patterns they observed back then are still relevant. Yeah. To how we think about cities now,

Speaker 2: yeah, it shows how these challenges really stick around and those early findings that kind of led to this attempt to come up with a normative standard for housing costs, researchers and policymakers were asking, okay, what percentage of someone’s income should be spent on housing?

Speaker 1: Yeah, that seems really hard to pin down, but wouldn’t things like housing quality and location play a role in that too?

Speaker 2: Totally. You’re right. The concept of residual income emerged to address that

Speaker 1: complexity. Like the residual income.

Speaker 2: Yeah. So think of it as the money you have left over after you’ve paid for all those basic necessities.

Speaker 1: Okay.

Speaker 2: It’s important because it shows that affordability isn’t just about the cost of housing. It’s about having enough money left over to actually live your life.

Speaker 1: Yeah, I guess it’s like those budget calculators you see online, but like on a much bigger scale. You could be spending what seems like a reasonable amount on rent.

Speaker 2: Yeah.

Speaker 1: But still be struggling if you don’t have anything left over for groceries or transportation. Those unexpected things that come up.

Speaker 2: Exactly. And as research in this area continued, things got even more complex.

Speaker 1: Okay.

Speaker 2: The idea of housing affordability expanded to include other essential costs like energy and water.

Speaker 1: Yeah, it makes sense. You hear terms like fuel poverty and water affordability more and more.

Speaker 2: Yeah. It

Speaker 1: makes you realize how connected all those costs really are.

Speaker 2: Totally. It’s all part of the same puzzle. And this realization led to budget standards being developed that took into account things like household size, the type of household, and even location.

Speaker 1: So like a family of four in New York City versus A single person in a rural area.

Speaker 2: Exactly. Those standards helped create a more accurate picture of affordability and material hardship.

Speaker 1: Wow. It’s getting really complicated. I imagine as cities changed and grew the things that impacted affordability change to

Speaker 2: definitely as we move into the 21st century, things get even more complex with it. Urbanization and globalization, adding more layers to the mix. That’s where this idea of financialization really comes into play. It’s having a huge impact on both home ownership and rental markets.

Speaker 1: I’ve heard that term before, but honestly, I’m not totally sure what it means.

Speaker 2: Yeah. So think of it like that housing is becoming less about a place for people to live and more about an investment or a financial asset.

Speaker 1: Oh, I see.

Speaker 2: You might be seeing this in your own city where homes are increasingly bought up by investment firms, not families.

Speaker 1: So instead of homes, they’re more like commodities to buy and sell for profit.

Speaker 2: You got it. And this combined with things like urbanization and gentrification puts immense pressure on housing prices, especially in big cities. Right. We’re seeing global capital flow into real estate, making it even harder for people to afford living in the cities they call home.

Speaker 1: So even though we’ve come a long way from those early studies back in the 19th century, It seems like some of the basic challenges of affording housing are still with us.

Speaker 2: Absolutely. And what’s really concerning is that the research says this is no longer just a problem for low income households.

Speaker 1: You mean middle income earners are feeling the squeeze too?

Speaker 2: Exactly. Even people earning what seems like a decent living are finding it harder and harder to stay in the urban areas they want to live in.

Speaker 1: Wow.

Speaker 2: And this brings up another important concept from the research, spatial lock in.

Speaker 1: Okay, that one definitely needs some explaining.

Speaker 2: Imagine you land a great job in the city center,

Speaker 1: but

Speaker 2: you quickly realize you can’t afford to live anywhere near your job. Moving closer would eat up most of your raise, so you’re stuck. That’s spatial lock in.

Speaker 1: So you might be trapped in a less desirable location, even though your life circumstances have changed for the better. That’s got to be so frustrating.

Speaker 2: It is, and sadly, the research shows that this is a dilemma a lot of people are facing.

Speaker 1: Yeah.

Speaker 2: The pressure of rising prices is pushing people to the edges of cities.

A trend they call the suburbanization of poverty.

Speaker 1: So even as cities grow and maybe even become more prosperous in a way, they’re also becoming less affordable for a lot of people.

Speaker 2: That’s the paradox we’re facing and it leads to some very real consequences.

Speaker 1: I’m ready to dive into those consequences if you are.

Speaker 2: Let’s do it.

Speaker 1: Okay, so we’re talking about the consequences of this affordability squeeze, and it feels like a lot of people are being left behind, even in cities that are doing really well economically.

Speaker 2: Yeah, that’s a great point. The research really does paint a pretty stark picture of what happens when affordable housing becomes scarce in urban areas.

Speaker 1: What are some of the specific consequences you’re seeing

Speaker 2: for starters? It’s not just about finding an affordable place to live anymore. You have to think about all the ripple effects being pushed to the edges of a city often means you’re further away from jobs, good schools, health care, even those vital social support networks that really help people thrive.

Speaker 1: So it’s like this double whammy. You’re struggling to afford a place to live. And then on top of that, you’re further away from the things that could help you get ahead.

Speaker 2: Exactly. And even if you can manage to find work in the city, you’re often facing incredibly long and expensive commutes.

Speaker 1: Which brings us to that commuting poverty thing we talked about.

Speaker 2: Yeah, it’s not just rent or mortgage payment to get to and from work every day. It’s a huge burden, especially for people who are already struggling.

Speaker 1: Yeah, it feels like they’re being penalized just for trying to earn a living.

Speaker 2: That’s a good way to put it, and it’s not just the money, it’s the time it takes away from people. These commutes eat into time that could be spent with family, pursuing education, or just resting and recharging.

Speaker 1: Yeah, I hadn’t thought about it like that, but you’re right.

Speaker 2: And here’s something that might surprise you. The research shows that this isn’t just happening in sprawling cities like L. A.

Speaker 1: Really? You mean it’s happening in smaller, more compact cities too?

Speaker 2: Absolutely. Even in cities known for having pretty good public transportation, rising housing costs are still pushing people further out.

Speaker 1: Wow.

Speaker 2: Which forces them to rely more on cars adding to their expenses affordability is really a global phenomenon. Impacting all types of cities. That’s what the research shows, and it’s affecting people across different income levels.

Speaker 1: Because like we said, even middle income households are starting to feel it.

Speaker 2: Yeah, they might not be experiencing traditional poverty, but they’re struggling to maintain a decent quality of life with these rising costs.

Speaker 1: It’s about being able to enjoy the city, to take advantage of the things that make urban life attractive, and that’s getting harder and harder.

Speaker 2: Yeah, that’s a key point from the research. It’s not just about basic survival anymore. It’s about being able to afford a quality of life that matches your income and what you want out of life.

Speaker 1: It makes me think about all the talk about the shrinking middle class. It feels like a similar thing is happening in cities where that middle ground of affordability is disappearing.

Speaker 2: You’ve hit on a really important point, and this has big implications for how we measure and address housing affordability going forward.

Speaker 1: Yeah, because those old metrics, like just looking at your expense to income ratio, just don’t cut it anymore.

Speaker 2: Exactly. They leave out all those other factors that contribute to the real cost of living in a place. So what’s

Speaker 1: the alternative? How do you even start to measure the whole picture of affordability in a city?

Speaker 2: The research points to some promising new approaches.

Speaker 1: Okay.

Speaker 2: For example, researchers are developing what they call composite measures that incorporate lots of different dimensions of affordability. Okay. They look at transportation costs. Access to amenities, even the quality of the neighborhood.

Speaker 1: So it’s like they’re trying to measure how livable a place is, not just whether you can technically pay the rent.

Speaker 2: That’s a great way to think about it. They’re recognizing that housing affordability isn’t just having a roof over your head. It’s about being able to access opportunities and resources that allow you to actually thrive in a city.

Speaker 1: It’s about having the freedom to participate in city life.

Speaker 2: Yeah.

Speaker 1: Not just barely getting by.

Speaker 2: Precisely. And one good example of these new approaches is something called the Location Affordability Index, developed by the U. S. Department of Housing and Urban Development, or HUD.

Speaker 1: Yeah, I remember reading about that in the paper.

Speaker 2: Okay, so it’s a great example of a tool that goes beyond just looking at housing costs by themselves. Hmm. The Location Affordability Index also includes transportation expenses, which gives a more realistic and detailed picture. of affordability in different neighborhoods.

Speaker 1: So it’s like a map that not only shows you where you can afford to live based on rent or mortgage payment, but also how much it’ll cost to get around and access all the things you need.

Speaker 2: Exactly. It helps people understand the trade offs involved in different housing choices.

Speaker 1: I can see how that would be really useful for anyone trying to figure out the housing market in a city. It’s not just about finding a place in your budget. It’s about understanding the bigger picture of affordability.

Speaker 2: You got it. And the cool thing is, researchers are developing even more comprehensive measures.

Speaker 1: Oh, wow.

Speaker 2: Some include things like access to good schools, healthcare facilities, even green spaces.

Speaker 1: It’s like they’re trying to quantify all the elements of a good life in the city.

Speaker 2: That’s the goal, because ultimately housing affordability isn’t about numbers on a spreadsheet, it’s about people’s lives.

Speaker 1: Yeah.

Speaker 2: It’s about making sure everyone has a fair chance at a decent life, no matter where they live in a city.

Speaker 1: So it’s less about trying to fit everyone into a strict definition of affordable and more about making cities that are truly inclusive and offer everyone a chance to thrive.

Speaker 2: Exactly. And that’s where the conversation shifts from just housing policy to a much broader discussion about urban planning and policy in general.

Speaker 1: That makes sense. If we want to make cities more affordable, we have to think bigger than just building more housing.

Speaker 2: Yeah.

Speaker 1: Try to consider the whole ecosystem of the city and how it all works together.

Speaker 2: Absolutely. You’re right. And that brings us to the heart of what the research is really pushing for a more holistic approach to urban planning and policymaking.

Speaker 1: What are some of the solutions that the research points to? What can cities actually do to make things more affordable for everyone?

Speaker 2: That’s the big question, isn’t it? And the research does suggest some pretty concrete things that cities can try. Yeah. One major area is increasing the amount of affordable housing, especially in those popular areas where prices are going crazy.

Speaker 1: If there just aren’t enough options, prices are going to keep going up and people will be pushed out.

Speaker 2: Exactly, and there are a bunch of ways to do this. Some cities are encouraging developers to include affordable units in new buildings. Others are putting more money into public housing. The goal is to make sure there’s a variety of housing options for people with different incomes.

Speaker 1: So it’s not just about building more housing, it’s about building the right kind of housing.

Speaker 2: Exactly. Another really important thing the research talks about is improving transportation and making it easier for people to get around without a car.

Speaker 1: Yeah, like we were talking about before with commuting poverty, if people are forced to live further out and their commutes are longer and more expensive, It makes sense to invest in public transportation.

Speaker 2: Absolutely. Imagine good public transit systems, safe bike lanes, streets that are easy to walk on. Yeah. All these things can help people get around without needing a car, which can be a huge expense.

Speaker 1: So it’s about making transportation more affordable, but also about giving people more options.

Speaker 2: Exactly. And here’s another interesting idea. The research mentions promoting mixed income neighborhoods and breaking down those patterns of segregation we see in a lot of cities.

Speaker 1: So instead of having neighborhoods that are only for low income or high income families, you’re saying we need to create communities where people from different backgrounds live together.

Speaker 2: Yeah, that’s the idea. You see, when you concentrate poverty in certain areas, it often creates this cycle of disadvantage where people have limited access to things like good schools, jobs, and even just safe public spaces.

Speaker 1: It’s like trying to create a level playing field so everyone has access to the same opportunities no matter how much money they make.

Speaker 2: Exactly. Mixed income neighborhoods can really help build a sense of community and break down those barriers that keep people from doing well.

Speaker 1: So we’ve talked about building more affordable housing, improving transportation, creating mixed income communities. What else does the research suggest?

Speaker 2: Another big topic is the rise of short term rentals and how they’re affecting housing markets.

Speaker 1: Oh, yeah, that’s something I’ve been thinking about a lot. You see those ads everywhere, rent your spare room, make extra cash, but it seems like there’s a downside to all of that.

Speaker 2: There can be. While short term rentals can be good for the economy, especially for individual homeowners, there’s this concern that they’re taking away housing that could be used for long term residents.

Speaker 1: So instead of those apartments or houses being available for people who live and work in the city, They’re being used for short stays, often by tourists or people traveling for business.

Speaker 2: Exactly.

Speaker 1: I can see how that could lead to a housing shortage.

Speaker 2: And it connects to that bigger issue of housing as a financial investment. When homes are seen more as investments than places for people to live, it creates a whole set of new problems.

Speaker 1: So cities need to figure out how to regulate those short term rental companies. And make sure that housing is prioritized for the people who actually live there.

Speaker 2: That’s a huge conversation happening in cities all over the world right now. How do you balance the benefits of these platforms with the need to make sure people have affordable housing?

Speaker 1: It’s a tough one. What else is the research saying about concrete actions cities can take?

Speaker 2: One last thing that really stuck with me is the focus on data. The research says we need to constantly track affordability trends and measure the impact of policies.

Speaker 1: So we can’t just put these solutions in place and hope for the best. We need to collect data to see if it’s actually working, and if not, adjust our approach.

Speaker 2: Exactly. Data is really powerful for making good policy decisions and making sure we’re actually making progress towards fairer, more affordable cities.

Speaker 1: It’s like having a feedback loop where we’re constantly learning and approving.

Speaker 2: You gotta, it’s about being flexible and recognizing that this is an ongoing challenge that requires creativity and attention.

Speaker 1: This has been a fascinating look at urban housing affordability. I feel like we went way beyond just the basics.

Speaker 2: Yeah, me too.

Speaker 1: We explore the history, the challenges that are changing all the time and some really innovative solutions that cities are trying.

Speaker 2: Absolutely. And what’s exciting is that there are so many people working on solutions.

Speaker 1: Definitely. And before we wrap up. What’s the one thing you hope people listening will take away from all this?

Speaker 2: I think the main thing is that urban housing affordability is bigger than just housing. It’s about urban planning. It’s about the economy. It’s about social justice, and it needs a multi pronged approach where everyone works together and is willing to try new things.

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What is the future for cities podcast?

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