Where Is the Housing Shortage?

Abstract

This article examines the extent to which the US as a whole and its metropolitan areas face a housing shortage by comparing change in total housing units and total households from 2000 to 2020. Although various studies indicate that the nation has a shortage of anywhere from 2 million to 4 million units, Census data show little evidence of a shortage. Household formation did exceed the growth of households from 2010 to 2020, but that does not take into account the large surplus of housing produced during the previous decade. From 2000 to 2020, housing production exceeded the growth of households by 3.3 million units. Of the nation’s 381 metropolitan areas, only four experienced a housing shortage during this time, as did only 19 of the nation’s 526 micropolitan areas. Even though the stock of housing is adequate in most markets, the mismatch between the distribution of incomes and the distribution of housing prices results in housing affordability problems, especially for extremely low-income renters.

Keywords:

• Housing supply
• housing shortage
• housing affordability
• housing vacancy

Disclosure Statement

No potential conflict of interest was reported by the author(s).

Notes

1 Because of its scale, the decennial census is considered the most accurate information on the counts of the housing stock both occupied and vacant compared to other Bureau of the Census surveys which are drawn from samples of various sizes. However, the 2020 census experienced data collection problems due to the COVID pandemic as well as efforts to suppress participation by immigrants (Bozick et al., 2023). Given these problems, the 2020 census is believed to be accurate at the national level, but, unlike prior decennial census counts, the 2020 census suffers from both overcounts and undercounts of some states (Cohn & Passel, 2022).

2 If the desirable vacancy rate is 9.3 percent of the total stock, then the stock should be 1.093 times the number of households. For 2022, this would be 140.6 million units, which is 3.1 million fewer units than were in the stock.

3 The ceiling rents for each income category are the ceiling annual income/12 months * .3 for acceptable rent to income burden. The ceiling home values for each income category are the ceiling annual income/12 * .28 for an acceptable cost burden of principal, interest, property taxes, and Insurance using 2021 loan terms, which results in an income multiplier of 4.8.