Los Angeles, California has become synonymous with unaffordable housing, a trend seen in many cities across the United States over the past two decades. A recent report has further highlighted this issue by categorizing some major cities as “impossibly unaffordable.”
The report analyzed the housing market by comparing average incomes with average home prices, revealing a significant disparity exacerbated by pandemic-driven demand, land use policies restricting urban sprawl, and increased investor activity leading to soaring prices.
Cities on the West Coast and Hawaii dominated the list of the top 10 most unaffordable places in the United States, according to the annual Demographic International Housing Affordability report. Notably, cities in California such as San Jose, Los Angeles, San Francisco, and San Diego ranked among the most expensive.
Furthermore, Honolulu in Hawaii secured a spot in sixth place among 94 major markets surveyed in eight countries. Australia also featured prominently on the list, with Sydney, Melbourne, and Adelaide being recognized as “impossibly unaffordable.”
Topping the global affordability leaderboard is Hong Kong, known for its compact living spaces and exorbitant rents. Despite being the only Chinese market mentioned in the report, Hong Kong continues to struggle with affordable housing, with a low home ownership rate compared to other cities surveyed.
The report attributed the surge in house prices to factors such as working from home trends during the pandemic, demand for houses with more outdoor space, and restrictive land use policies like urban containment. As a result, prices have skyrocketed, making homeownership increasingly out of reach for many middle-class families.
To address the housing affordability crisis, the report suggests looking at success stories like New Zealand, where government policies have prioritized freeing up land for development. By following similar strategies, cities like Vancouver and Toronto in Canada could potentially alleviate the burden of unaffordable housing costs.
In contrast, the report also lists the most affordable cities among those surveyed, including Pittsburgh, Rochester, and St. Louis in the US, Edmonton and Calgary in Canada, as well as cities in the UK and Australia. This information provides a ray of hope for potential homebuyers facing daunting housing prices in some of the world’s most expensive markets.
The report’s findings were compiled by researchers from the Center for Demographics and Policy at Chapman University in California and the Frontier Centre for Public Policy, an independent public policy think tank in Canada. Their insights shed light on the global housing crisis and offer potential solutions to create more equitable and affordable housing opportunities for individuals and families worldwide.