Giving Compass' Take:

• Jenny Schuetz explores how housing stress pressures the middle class in America, creating difficult choices that negatively impact well-being. 

• How can funders work to ensure that middle-class Americans can afford to live where they work? 

• Learn about deficit-neutral policy solutions for the middle class. 

Having a stable, decent home in a safe, healthy community is critical to overall well-being. Housing is the largest single expenditure in most family budgets, more than double the amount spent on either transportation or food. Residential stability provides the foundation for participating in other economic and social activities. Where families live has wide-ranging consequences for their well-being.

Over the past decade, housing costs in the U.S. have risen faster than average incomes. While housing affordability has long been a problem for low-income families, middle-income families are increasingly facing affordability challenges, especially in urban areas with strong labor markets. When housing costs rise, households can respond by adjusting their consumption; for instance, living in smaller spaces or moving farther from city centers. In this paper, I examine middle-class housing stress along four dimensions: affordability, inadequate space, commute times, and homeownership. Using household-level data from the Census Bureau’s Individual Public Use Microdata Sample (IPUMS), I explore how housing stresses vary by income, household type, race, and geography.  Results show that, on average, middle-income families are doing well on all four dimensions. However, distinct population groups show stress on several metrics, including affordability, crowding, long commute times, and access to homeownership.

  1. Housing can enhance well-being or create distress through several channels.
  2. Lower-middle-income households are stretching to afford housing.
  3. Middle-income households occupy plenty of space – with one important exception.
  4. Long commutes are more common in expensive housing markets.
  5. Income, age, and race limit access to homeownership.
  6. Discussion and policy implications

Read the full article about housing stress on the middle class by Jenny Schuetz at Brookings.