WHY IS THIS IMPORTANT?
Households that spend more than 30 percent of their income on housing costs (including utilities) are considered cost-burdened. Cost-burdened households often find themselves without sufficient funds for other necessities such as food, health care, transportation, child care, and clothing. Being able to afford quality housing in close proximity to quality schools, grocery stores, and parks is a particular struggle for many low-income families.[i] Discriminatory lending practices—such as offering only high-cost loans to racial and ethnic minorities who actually quality for low-cost credit—can increase the housing cost burden for minority communities.[ii] In addition, high-cost loans may lead to increased foreclosures in neighborhoods, resulting in disinvestment and subsequent gentrification.
[i] A. Williamson, “Can they Afford the Rent? Resident Cost Burden in Low Income Housing Tax Credit Developments,” Urban Affairs Review 47, no. 6 (2011): 775-799.
[ii] G. Squires, “Demobilization of the Individualistic Bias: Housing Market Discrimination as a Contributor to Labor Market and Economic Inequality,” The ANNALS of Political Social Science 609, no. 1 (2007): 292-321.
E. Wyly, M. Moos, D. Hammel, and E. Kabahizi, (2009). “Cartographies of Race and Class: Mapping the Class-Monopoly Rents of American Subprime Mortgage Capital,” International Journal of Urban and Regional Planning Research 33, no. 2 (2009): 332-354.