Drive down the road in most U.S. cities and it seems like every new multifamily development is billed as a luxury living experience. This situation is more than just clever marketing; it belies a growing problem: Many U.S. markets have a robust supply of high-end units but not much in the way of workforce housing.
According to the Urban Land Institute, workforce housing serves households making 60% to 120% of the area median income (AMI). In Georgia, for example, the AMI is $51,037. A household making 90% the AMI—the median of 60% and 120%—has income of $46,000. At that level, it’s very difficult to find housing options that don’t consume an outsized proportion of monthly take-home pay.
The average rent for an apartment in Atlanta is $1,597 and would consume 41% of gross income for a household making $46,000. Factor in living expenses like electricity, transportation, and child care, and the basics begin to consume the vast majority of a household’s paycheck.
Business leaders and municipalities have been sounding the alarm about the lack of workforce housing for some time, but the current abundance of luxury units in many markets has brought more attention to those who aren’t being served by existing inventory.
Source: Multifamily Executive