The United States faces an affordable housing crisis that disproportionately impacts persons with disabilities. The nation's supply of affordable housing is too low to keep pace with demand. Because many people with disabilities rely on SSDI or have other financial constraints, they are more likely to be impacted by the current surge in housing prices.
We discuss the specifics of the housing crisis and examine what the future may hold for renters and buyers with disabilities.
Crisis for renters
After the housing bubble of 2008 burst, builders slowed the new construction of affordable rental properties. Yet despite 14 years of invigorated growth, the National Low Income Housing Coalition estimates that the post-2008 lull created a deficit in affordable units totaling 6.8 million in 2022.
At the current pace of production—approximately 110,000 units per year—supply will never meet demand. And at a time when affordable housing is already in short supply, economic forces have contributed to the squeeze Americans face.
Rampant wage stagnation over the last 30 years has exacerbated the issue, contributing to the erosion of the middle-class and accelerating the rate at which citizens in the city seek refuge in the suburbs − pricing out locals whose income cannot keep up with the hikes.
Crisis for buyers
In 2022, the average home cost will be $350,000, double what it was a decade ago. In the past year alone, home prices have increased 20%.
In the pandemic era, restrictive zoning, labor shortages, supply chain shortages, and rising costs for goods like lumber have effectively made affordable homes history.
In addition, COVID-19 ushered in a new normal of work-from-home flexibility, giving white-collar workers more geographical freedom.
Favorable economic conditions put in place by the government are also fueling demand. Early measures at the beginning of the pandemic by the federal government shored up the housing market, limiting foreclosures and forbearances. The result was that homeowners remained in their homes, but also decreased the number of homes that went on the market and made for fewer "distressed" home sales that generally offer markedly discounted pricing to people with lower incomes, all of which limited supply.
Additionally, demand is being fueled by lower mortgage rates. The average 30-year fixed-rate mortgage loan fell below 3% at the pandemic's start and has hovered below five ever since. For context, this rate was about 6% at the height of the housing bubble in 2008. Low-interest rates are a powerful motivator in the decision to buy a home.
Effects of supply and demand on people with disabilities
Data from the U.S. Census Bureau's ongoing Household Pulse Survey (HPS) indicates that people with disabilities have higher housing insecurity during the COVID-19 pandemic. Though renter protections—such as rental assistance programs and moratoriums on evictions—have been put into place during the pandemic, the HPS data indicates that housing insecurity remains disproportionately higher for people with disabilities. According to the HPS data, renters with disabilities report being less caught up on rent than the general population and have less confidence overall in their ability to pay next month's rent.
No refuge can be found in home buying either. While it is possible to secure a home loan on a limited income, persons with disabilities who do rely on programs like SSI/SSDI are often relegated to homes that are neither accessible nor affordable as they wrestle with a housing supply that has long passed the watermark.
Those that can get a loan on a limited income are the exception. For most, it has become nearly impossible to secure funding as the average American home price creeps towards half a million dollars.
Market watch: what the future holds for housing
The jury is still out on the future of the housing market. While experts do not expect these trends to carry on indefinitely, even optimistic outlooks believe homes and rents will likely become more expensive in 2022. Inevitably, supply and demand will shift, and the market will even itself out, or so experts believe.
Housing prices have risen so swiftly that pricing is now disconnected from household incomes and construction costs. Going forward, the ideal scenario would be that prices begin to cool off long enough to allow incomes and construction costs to catch up. This seems likely if mortgage rates increase slightly to deter demand and temper prices. Many think the Fed will do just that in 2022 as the worst economic damage of the pandemic recedes and the economy returns to total health.
While the market (hopefully) transitions into this leveling out period, what should people with disabilities affected by the housing crisis do? The short answer is sitting tight if your situation allows it. For renters facing more immediate housing insecurity issues, utilizing the protections of rent moratoriums and emergency rental assistance programs might go a long way in bridging the gap for some, but more needs to be done.
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