Housing USA: America’s Affordability Landscape

7 min read

Analyzing the Affordable Housing Challenges in Each U.S. Region  

For National Housing & Rehabilitation Association’s 50th anniversary, we wanted to do a breakdown of the affordable housing situation in different parts of America, and how it has changed throughout the years. 

There is no doubt that in recent years, particularly, housing has become more expensive nationwide. But the degree varies by region. While some areas of America have median home costs that are genuinely unreachable for large segments of the populace, other markets are more reasonable. And of course, additional factors, like an area’s median income and projected future growth rates impact this too. This has ramifications for Low Income Housing Tax Credit allocation, because an area’s market characteristics necessitate different approaches.  

In this piece, I will split the U.S. into five distinct regions: the Northeast, spanning from Maine to DC; the Midwest, beginning in western Pennsylvania and extending west to Kansas; the South and Sunbelt, which spans below the Mason-Dixon Line on through the Southwest; the West Coast; and the Intermountain West. 

The Northeast’s major cities are among the nation’s most expensive. Metro Boston; Washington, DC; and New York City have median home prices well above the national average. Metro Philadelphia and Baltimore are more affordable, but their prices are quickly increasing and certain pockets are expensive. 

New York is really a bellwether for the whole region. The metro’s current median sales price is $805,000, according to Redfin, and last year the city beat out San Francisco as having America’s most expensive rents. By comparison, the city saw home price appreciation at well below the national average for much of the last 50 years; it was only in about the last 15 years that prices shot up to abnormal levels.  

What’s interesting about New York City is that demand grows even as the quality of services declines. Granted, service quality has long been an issue in New York City—easily over the last 50 years if not longer—but unlike before, is happening alongside skyrocketing real estate prices. 

This speaks to the conundrum that defines New York and other northeastern cities. Their age means they have declining services and legacy debt that forces high taxes. Their population growth is generally mild and has been over the last 50 years, with many of the non-prominent center cities throughout the region even declining over this time. But enough well-heeled people still want to live there that it forces home prices up. And because this high demand isn’t met with fast construction, these cities see low inventory and rising prices. 

The Midwest is similar to the Northeast in having aging cities with service decline. But it doesn’t have nearly as high of a demand – in fact, something like the opposite. The United States Regional Economic Analysis (REA) Project finds that the Midwest’s 1950 to 2000 growth rate of 35.1 percent lagged the 89.2 percent growth rate of the U.S.  

Cities like Pittsburgh, Detroit and Milwaukee have declined for decades, and have lower costs of living than the national average. Chicago and Minneapolis outpace the national average, each by about 15 percent. But rents in Chicago are still much cheaper than dense peer cities, like New York and San Francisco: in Chicago proper, a two-bedroom rents for $1,895 on average, versus $5,874 in New York City.  

It’s not an across-the-board story of decline: some markets, like Columbus, are growing. Even so, home prices are low relative to the Northeast and West Coast: the median sales price in Columbus is only $200,000, according to Realtor.com.  

Interestingly, Midwestern cities tend to still attract tax credit financing, in part due to their stock of old buildings that need repair. I recently wrote about the role Historic Tax Credits played in reviving downtown Cleveland (Tax Credit Advisor, December 2021). But the relative affordability of Midwestern markets suggests that allocation of housing credits there is less urgent than elsewhere.  

West Coast 
West Coast prices have been high for some time. Irvine, CA, between Los Angeles and San Diego, has the fastest price appreciation in the country, at 49.4 percent growth over 2021, according to Redfin.com. And San Francisco is notoriously unaffordable, with home price medians of $1.48 million, though rents in the Bay Area remain low relative to their pre-pandemic levels. Washington and Oregon are similarly expensive – the median home price in the former was $452,400 in 2020. 

There are some affordable metros on the West Coast, but finding them requires driving well inland. Because many of the jobs are in the coastal cities, this leads to long commutes. Stockton, CA, is one such example of a “super commute” hub, but even it has grown considerably and the median home price is up 11.6 percent in one year.  

Fast growth of California’s inland cities has, however, been a consistent trend over the last 50 years – it’s just more notable now because it is being driven in part by NIMBYism and high prices on the coast.  

The West Coast’s major cities face similar issues to the Northeast in terms of restrictive zoning and low inventory. If any market needs subsidies for low earners, it would be this one. Yet the high land costs and slow project approvals mean that credit allocation only goes so far, and that affordable housing projects are expensive on a per-unit basis. So deploying tax credits to West Coast metros can be a double-edged sword. 

The South and Sunbelt 
Perhaps the biggest demographic story in America over these last 50 years is the way that people have left the Northeast and Midwest and spilled into the South and Sunbelt. Yet despite all this population growth, the metros there have kept living costs down, making them America’s true affordable housing success story.  

Cities like Austin, Houston, Nashville and Orlando permit far more housing than their Northeastern or West Coast counterparts, and thus have home prices around the national median. But even prices there are fast appreciating. The Case-Shiller Index noted that gains in early summer 2021 were led by Sunbelt markets; in fact, Phoenix has outpaced the rest of the nation.  

As the U.S. population continues to escape the cold weather, high taxes and home prices elsewhere in the country, the South and Sunbelt will continue to be America’s primary population growth center, which would also make it the most practical region for credit allocation – it is cheap, and is where people actually want to live. 

Intermountain West 
Fifty years ago, this region was known for its mix of tall mountains and vast, unpopulated plains. It is still very much like that – but in percentage terms is seeing America’s fastest growth.  

Some of this is due to natural resource extraction, such as North Dakota’s fracking boom. These create a very sudden demand for workers that causes crunches in areas without the existing housing to accommodate them. Other parts are growing due less to resource extraction than their lifestyle appeal – such as Salt Lake City, Denver, Boise and Bozeman. These smaller cities are attractive to tech workers, many of whom are seeking vibey “Zoom towns” that enable remote work at lower prices. 

But regardless of the cause, the Intermountain West is undoubtedly booming, with five of the six top fastest-growing states since 2010. In theory, this makes the region attractive for affordable credits, particularly those targeted at workforce housing. But allocators need to be careful, as demand in some locales is sporadic, often tied to commodity prices and resource extraction policies coming from Washington.  


A lot has obviously changed about the housing market in 50 years of NH&RA. Much of it is tied to technological advances – the proliferation of the personal automobile, streamlined construction processes that yield larger homes and computer functions that enable remote work. From an affordability standpoint, the most meaningful change is in noting the demographic shifts from certain areas of the country to others. This should be noted by allocators, financiers, developers and whoever else is working with tax credits.  

This article featured additional reporting from Market Urbanism Report content manager Ethan Finlan.