Politics

The housing crisis is the top concern for urban residents

Housing costs and homelessness in America’s cities are so bad that people in growing metro areas now appear more concerned about those issues than Covid-19, public safety, taxes, education, and jobs, according to a new poll by the Manhattan Institute and Echelon Insights.

The poll surveyed 4,000 adults from August 11-20, sampling 200 people each in the “20 metropolitan areas with the largest numerical population growth from 2010-2019.”

Manhattan Institute and Echelon Insights

This poll takes place after more than a year of skyrocketing housing prices. The Case-Shiller Index, a leading measure of US home prices, showed in June that prices had increased 18.6 percent since the previous year. According to data from the US Census Bureau and the Department of Housing and Urban Development aggregated by the Federal Reserve Bank of St. Louis, the median sales price in the last quarter of 2019 was $327,100. By the second quarter of 2021, that number had hit $374,900.

“It’s not surprising that housing affordability was the top issue in America,” said Michael Hendrix, a senior fellow at the Manhattan Institute, a free-market think tank. “What surprised me was the intensity, the priority that housing affordability and generally cost of living for people that ranks in these fast-growing metros. It wasn’t just a San Francisco or New York issue, it’s becoming more widespread.”

In attractive metropolitan areas, the situation is even more dire. According to Redfin data, Phoenix saw a 24.1 percent median sales price increase over the last year. Housing supply declined by 44.9 percent in San Francisco in the same time frame. And residents are noticing. In the Manhattan Institute’s poll, 64 percent of people in fast-growing urban areas said they were extremely or very concerned about the cost of housing. The poll has a sampling margin of error of plus/minus 2.3 percentage points and includes some respondents in less dense communities within the metro areas.

Unlike most national polls about housing affordability, this one asked respondents about which solutions they’d apply in their cities. Two-thirds strongly or somewhat support allowing “more housing to be built near transit stops,” an important solution since transit-oriented development is necessary to create affordable, walkable, and climate-friendly neighborhoods.

But, most importantly, the survey found that people in growing metro areas are in favor of making it easier to build more homes. Sixty-eight percent agreed that they would support “expediting and streamlining the approvals process so it is easier to begin building more housing” in their city. Only 20 percent say that they strongly or somewhat oppose. This, finally, helps get to the root of the issue.

American cities have seen such a steep rise in housing unaffordability largely due to a dangerously low supply of homes, in particular affordable homes. One major reason is that state and local governments have artificially constrained the supply of housing through zoning ordinances and through a local government process that results in costly delays. By requiring things like minimum lot sizes or holding public meetings where developers are forced to defend building multi-family housing, these laws often make it illegal or unprofitable to build small starter homes or multi-family homes that would be more affordable relative to the large homes that get built in their stead.

These laws are often propped up and enforced by a minority of vocal homeowners who are more likely to attend local government meetings to oppose new housing developments — and the local officials who prioritize those voices. Commonly known as NIMBYs (Not In My Backyard), vocal individuals like this often have outsized influence despite research showing that they are unrepresentative of the communities they purport to speak for.

The housing crisis is the top concern for urban residents

Manhattan Institute and Echelon Insights

To be sure, not everyone views the situation this way. Even though poll respondents were widely supportive of making it easier to build more housing, they don’t necessarily see it as the best answer to the affordability crisis.

When asked to choose between two statements explaining the problem, 55 percent of respondents picked the explanation that “there are homes available, but they’re too expensive for working and middle-class people to rent or purchase. State and local governments need to subsidize building more affordable homes.” Just 30 percent agreed with the statement that home prices are high because there aren’t enough homes and that the solution would be making it easier to build more of them.

And it’s possible that people would oppose specific new housing projects in their communities, even if they agree with the broad principle that building more housing in their city is good.

But this poll is another piece of evidence that anger over the lack of new affordable housing has reached a crescendo. Residents want more affordable housing built in their cities. They favor transit-oriented development. They are eager for the government to subsidize the building of more affordable housing. And they are in favor of making it easier to build more homes.

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