Dive Brief:
- High housing costs are a contributor to poverty in multiple states, an analysis by Pew Charitable Trusts found.
- The analysis found that around 16% to 34% of poverty in California, Colorado, Connecticut, Hawai’i, Maryland, Massachusetts, New Hampshire, New Jersey, New York and Washington, D.C., was linked to the high cost of housing, which can offset the impact of antipoverty programs such as the Supplemental Nutrition Assistance Program.
- Pro-housing development policies and reforms such as those Austin, Texas, and Minneapolis have adopted in recent years can address housing shortages that impact affordability, the analysis states.
Dive Insight:
Nearly half of all U.S. renters are cost-burdened, spending more than 30% of their income on housing.
Pew Charitable Trusts built on the research of University of Oxford Professor Zachary Parolin to examine how housing supply and costs affect poverty.
Parolin’s study discovered that increasing housing costs offset more than half of the increase in SNAP benefits from 1989 to 2023 in the states examined, according to the analysis. “Even when incomes rise, households remain at risk of poverty if housing costs increase at a greater rate — making housing a critical issue for policymakers to address,” Pew Charitable Trusts said.
A 20% rent decrease could reduce poverty by up to 26% in the studied states, according to Pew Charitable Trusts’ analysis of Parolin’s work.
Rents in Austin and Minneapolis have fallen following zoning code and permitting process updates, the report notes, and other cities are continuing to explore reforms to encourage development.
“Policy reforms that make it easier to add housing — especially efficient and lower-cost housing such as apartments and townhouses — in high-demand areas can provide large poverty-reduction effects, on par with those of major federal programs,” the report states.
