The cities no one can afford to live in
Around the world, people are streaming into big cities. But owning a home in these places is out of reach for many Americans — and where most end up renting, the idea of a quick zip to work is a cruel joke.
By the numbers: This is a global issue. A recent survey by Demographia, a firm that researches cities, looked at 309 metros in 8 countries. Of these, just 9 housing markets (all in the U.S.) were judged to be "affordable" — meaning that the ratio of average housing prices to income was 3 to 1 or less. The most affordable were Pittsburgh, Rochester, and Oklahoma City.
- But 29 cities were severely unaffordable, including 13 in the U.S., 7 in the U.K., and 5 in Australia. The worst was Hong Kong, with a ratio of 20 to 1. Vancouver was next at 12.6, and Sydney at 11.7.
The "smart city" concept may exacerbate the affordability crisis. Joel Kotkin, a professor at Chapman University, said the term currently connotes killing single-family homes in favor of dense living arrangements and public transportation.
- It also means "no kids, because unless you are rich, there are no families," Kotkin told Axios. "Most people over the age of 30 want a single-family home with a backyard. But people live in a crate and take a bus for an hour to work."
- "The whole paradigm is off."
Some urban experts blame "urban containment" policies that seek to build up density by limiting the contours of a metropolitan area. "All cities with severe unaffordability have adopted one form or another of urban containment," said urban policy expert Wendell Cox.
- One answer, experts say, is to loosen up by lifting regulations to enable cities to grow.
What's next: "We ought to redefine what smart is," says Kotkin. "To me, smart is upward mobility, maintaining the middle class, and helping the working class."