Redefining Housing Affordability

A new study from the University of California, Berkeley’s Terner Center for Housing Innovation attempts to change the conversation about housing affordability.

As Erin Baldassari explains in an article for KQED, the study “argues the classic question — ‘Is a place affordable?’ — should instead be supplanted with a new one: ‘Who can afford this place?’” The subtle difference between those two questions can illuminate stark disparities. For example, “we’ve been saying Beverly Hills is perfectly affordable because the people who live there can afford it.”

To shift to a new definition of affordability, researchers used data about housing costs, income, and other expenses to assess affordability by county for all Californians. “The result is an interactive map that shows how many Californians could afford to live in each county — which paints a much bleaker picture of the state’s most expensive areas than had previously been shown.” The study also accounts for things like access to transportation, which can lower the cost of living in urban areas, somewhat balancing out more expensive rents.

The study’s findings could lead to changes in how policymakers define affordability to better account for overall costs — but changes to housing assistance programs would likely require major injections of new funding.