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The Deep Roots of America's Housing Affordability Crisis

A new analysis finds that what we see today is basically “the current manifestation of a long-run trend.”
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It’s getting harder and harder for recent college graduates to afford a place to live in the booming U.S. cities where the most diverse pool of jobs can be found. In the tech hub of San Francisco, new grads need to make more than $137,000 a year to comfortably afford that city’s median rent, but their median salary is just $41,000, according to a new analysis by Trulia. In New York, a new grad would need a starting salary of $121,500 to pay the median rent, almost four times the $33,000 median income for recent grads there.

While surging rents in superstar cities like these two grabs our attention, the reality is that the current urban housing affordability crisis dates back quite a ways, as Wharton real estate economist Todd Sinai argues in a new policy brief. Yes, rents have been rising rapidly in some cities over the last few years. And yes, incomes have failed to keep pace with rising rents. But Sinai’s analysis shows what we see today is basically “the current manifestation of a long-run trend.”