Spring 2021 Issue - 52

2021 ULI Terwilliger Center

Home Attainability Index
MICHAEL A. SPOTTS AND JULIE PAGADUAN

New release shows that the pandemic has exacerbated housing insecurity
and socioeconomic inequity.
The 2021 Home Attainability Index, released in
March by the ULI Terwilliger Center for Housing, shows
that across the United States, lower-income households are struggling to find attainable rental units.
While the most severe cost burdens among middleincome households are predominantly found in
the most populous regions, there is a nationwide
lack of attainable homes for many members of the
workforce that is not limited to the most vibrant U.S.
metropolitan economies.
Lower-income households earning 30 percent of
area median income (AMI) are the most vulnerable
to a shortage of rental housing. Those that are not
able to secure a subsidized housing unit or rental
assistance often face significant cost burdens. No
region had a sufficient supply of homes affordable
to people at this income level. The Knoxville, Tennessee, region performed best by this metric, but
still has only 56 units affordable and available for
every 100 households that need them.
The index also identified regions in which lowand middle-income households may face barriers
to homeownership. The relative cost of homeownership varies considerably by region, and a commensurate higher wage for living in a higher-cost region
is often lacking. Consider, for example, the barriers
to homeownership faced by a hypothetical twoincome household composed of a truck driver and
a child care worker in Boston versus Philadelphia.
Whereas the Philadelphia household earns almost
$36,000 more than is necessary to afford a medianpriced home, the data show that a similarly situated
couple would need to earn an additional $42,000 to
afford a median-priced home in Boston.
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Exacerbating Inequity
Barriers to homeownership can exacerbate racial
and ethnic disparities caused by more than a century of segregation, redlining, exclusionary zoning,
and discriminatory practices in the real estate and
finance industries. These barriers manifest themselves in many ways, but unequal access to stable
homeownership is particularly pernicious in limiting
wealth accumulation over time.
To illustrate, the index estimates the number
of years it could take for a household earning 80
percent of AMI to save for a downpayment and closing costs for a median-priced home. The median
for the index data set was 14.6 years, and 23
metropolitan areas had estimates of 20 years or
more. With the ability to save sufficient capital in
a reasonable amount of time limited, the impact
that family financial assistance can have in gaining
a foothold on the ladder of wealth creation is magnified. In this way, racial disparities can become
more entrenched, given racial ownership gaps-and
the fact that White households are more likely to
receive inheritance or help with making a downpayment than Black or Hispanic households, according
to research from Neil Bhutta, Andrew C. Chang, Lisa
J. Dettling, and Joanne W. Hsu of the Board of Governors of the Federal Reserve System.
The index's measures of segregation-both by
income and race-demonstrated that this challenge cuts across market types and geographies.
In regions where segregation is high, lower costs
at the regional level may not translate into greater
geographic housing choice for those with lower
incomes and for minority households.

SPRING 2021

3/31/21 1:08 PM

Spring 2021 Issue

Table of Contents for the Digital Edition of Spring 2021 Issue