In the Media

“While immigrants do add to overall housing demand, they cannot be blamed for the recent surge in home prices and rents that took off in 2020 and 2021, as immigration reached its lowest levels in decades due to the pandemic,” said Chris Herbert, managing director of Harvard’s Joint Center for Housing Studies.

In general, economists are skeptical that immigrants are the main driver of the current predicament. Chris Herbert, managing director of Harvard University’s Joint Center for Housing Studies, said that while immigrants do add to overall housing demand, “they cannot be blamed for the recent surge in home prices and rents that took off in 2020 and 2021.” That was when immigration reached its lowest levels in decades because of the pandemic.

What is evident, however, is that home prices have surged 53% since January 2020, just prior to the pandemic, pushing many would-be homebuyers out of the market. And with rents soaring 25% over the same time period, half of all renters are now defined as "cost burdened." That means a record share of renters now spend more than 30% of their income on housing, according to the Harvard Joint Center for Housing Studies.

Experts note government or nonprofit programs for home repairs often zero in on energy efficiency or getting a home to basic habitability instead of more cosmetic touches like a kitchen upgrade or curb appeal. This aligns with data that show lower-income households are much more likely to pursue replacement projects than discretionary improvements, said Sophia Wedeen, a senior research analyst at Harvard’s Joint Center for Housing Studies.

Almost nine out of 10 Americans 65 and older lived in their own home in 2021, according to Harvard University’s Joint Center for Housing Studies.

Daniel McCue, a senior research associate at Harvard’s Joint Center for Housing Studies, said it is also possible that mortgage rates will fall just enough to lure more buyers into the market, but not more sellers. “A lot of the mortgage holders are still holding mortgages that are pretty far below market,” he said. “Almost 75% of them have an interest rate below five, and one out of every five mortgage holders has an interest rate below three.”

What can an annual outlay of $100 million (the PRO budget for next year) do to solve a problem as big as a deficit of 3 million homes? “State and local governments look at each other all the time, so those little examples can bear a lot of fruit,” said Chris Herbert, director of the Joint Center for Housing Studies at Harvard and a fan of the program. “There’s not a lot of money out there, but these grants can become an example for other places.”

Severely cost-burdened tenant households (those putting 50 percent or more of their paycheck toward rent) are also at record numbers, increasing in rank by 1.5 million since 2019 and now surpassing 12 million households. This should hardly be a surprise, because while median rents have risen 21 percent in inflation-adjusted terms since 2001, median renter household incomes have risen just 2 percent.

Outsourcing development to the private market leaves affordable housing subject to the boom-and-bust cycle of private investment. What’s more, the federal government relinquishes the oversight needed to protect tenants from abusive landlords and racial discrimination. The result is a housing market where corporate landlords make record profits while half of America’s 44 million renters struggle to pay rent.

In the Minneapolis metro area, the median home once cost about 2.4 times the median income. Now that ratio has risen to nearly 4.