Addressing the Affordable Housing Crisis for ALICE Americans

For many Americans, the quest for affordable housing now requires considerable patience, resourcefulness, flexibility, and competition. For the Asset Limited, Income Constrained, Employed (ALICE) - which as of 2022, was 25% of the US population, not including those earning below the federal poverty level - this goal often remains perpetually out of reach. 

Despite having a job (and in many cases, two or three), these earners grapple with the yawning chasm between income and the escalating costs of living, of which rent and mortgage payments often make up untenable portions. Many ALICE individuals and families struggle to find budget-friendly rental units in safe neighborhoods and good school districts within a reasonable distance of their work location. Even if they do, their landlords may raise their rent prices later on, forcing them to search for new housing or face grave financial constraints.

Buying a home is one way to keep related costs stable and build wealth for the future, and home ownership is still the primary source of wealth for most Americans. Owned homes are major assets that can be used to reach other financial goals, such as procuring equity loans, bringing in income from renters, and making resale profits that can be used to purchase more valuable homes over time. Yet ALICE Americans face in securing affordable housing, some possible long-term solutions, and some suggestions for how to get housing assistance now. 

Why Housing Is Unaffordable for Many Americans Today

Even for middle-class individuals and families, housing affordability is a complex issue influenced by multiple factors, including:

• Economic disparities. The widening gap between income growth and housing costs means many Americans are spending a disproportionate amount of their income on housing. 

• Supply and demand imbalance. In many areas, the demand for affordable housing far exceeds supply, particularly in urban locations with strong job markets and transit centers.

• Regulatory hurdles. Zoning laws, land-use regulations, and lengthy approval processes can restrict the development of all housing types - particularly single-family or multifamily homes, which are less profitable to build than large apartment or condominium buildings. This leads to higher costs and fewer available units. 

• High interest rates. In an attempt to bring down high inflation following the pandemic, the federal government has steadily increased mortgage interest rates in recent years. This means that even Americans who can qualify for a home loan and afford to make a down payment may not be able to afford the monthly mortgage payments. In addition, potential sellers with pre-pandemic mortgage rates are keeping their homes to avoid losing money in interest on new ones, effectively freezing inventory for current buyers. 

Why Housing Is Even More Unaffordable for ALICE Americans

ALICE Americans, who are employed yet financially stretched, must contend with all of these barriers plus additional ones:

• Income insufficiency. Pay rates often don't keep pace with the "survival" cost of living, making it exceedingly difficult to afford housing without compromising on other necessities. Many low-income communities and communities of color spend over half of their income on housing, increasing their financial instability in ways that can lead to eviction and homelessness. 

• Job stability and locations. Many ALICE individuals work in sectors with erratic job security and fluctuating hours, compounded by the need to live near employment centers where housing is pricier. 

• Credit and rental history. Financial instability (especially when combined with challenges around financial literacy) can lead to poor credit scores and rental histories, further limiting housing options and access to affordable rentals. 

• Underfunded affordable housing projects. During the period following World War II, public and low-income housing was left underfunded, a trend that began as white veteran tenants were slowly replaced by renters of color. This resulted in deterioration, leading to unlivable conditions and limiting access to housing for low-income Americans. Today, affordable housing projects are inaccurately viewed as high-risk investments and receive less favorable loan terms compared with other property types.

• NIMNYist gridlock. Strict regulations frequently prevent developers from building affordable housing units, particularly in large urban centers. These regulations are frequently lobbied for by activists known as Not in My Backyard (NIMBY) proponents, or NIMBYists, who are often concerned about their own property values and neighborhood demographics. 

Some Potential Solutions

Addressing the affordable housing crisis requires a multifaceted, large-scale approach. Some options include the following:

• Expanding rental assistance. Increasing funding for rental assistance programs can help more ALICE families afford housing without sacrificing other essentials.
• Reconsidering zoning and land use. Easing restrictive zoning and land-use regulations can encourage the development of affordable housing and increase supply.
• Offering subsidies and incentives. Offering subsidies and tax incentives to developers for building affordable housing units can address the supply-demand mismatch. 

How You Can Get Housing Assistance Now

For immediate housing assistance, ALICE Americas should leverage community-based nonprofit social services, such as those provided by United Way. These organizations offer a range of support services, including:

• Rental assistance programs that offer help finding and financing affordable rental housing
• Homeownership education and support that provide detailed guidance on purchasing and maintaining a home within budget
• Legal and advocacy services that advise tenants about housing rights, eviction prevention, and landlord-tenant disputes

The journey to affordable housing for ALICE Americans is fraught with obstacles, but through the efforts of policymakers, communities, and organizations such as United Way, strides can be made toward a future in which every American has access to affordable, stable housing. By understanding the barriers, advocating for systemic changes, and utilizing available resources, we can help ALICE individuals achieve the security and stability that come with having a place to call home. 

Find Housing Resources With United Way of York County

United Way of York County in Pennsylvania is assisting hardworking households on their journey toward financial stability. In order to meet the needs of the ALICE population, we are embarking on an issue-focused strategy to create transformational impact for working households by focusing on two key barriers: childcare and transportation.

We offer many other resources through PA 211, a free, confidential health and human services information and referral hotline. Learn about how to use PA 211 to access resources such as housing assistance. Contact us today to get the services you need for a financially successful future!