Lit Review · Claude Sonnet 5

# Urban Housing Affordability: A Literature Review Urban housing affordability is one of the most significant problems in the social and economic networks of the 21st century. Economists, urban planners, policymakers, and social scientists have taken note of the challenge urban areas have faced in providing affordable housing. Rapid population growth in urban areas continues as people migrate from rural areas. These trends combine to put an unprecedented demand on the supply of affordable housing. Disparities in the cost of housing and the income of a household result in what has become known as the "housing affordability crisis." Each urban area may experience this crisis differently, but they all share similar underlying causes related to the supply of housing, the demand for housing, and the inequity found in housing markets. The way scholars define affordable housing has changed over the years. Early definitions were limited. The most common definition was the "30% rule" in which affordable housing was considered housing that cost the household 30% of the household's total income. More recent research has focused on the housing affordability crisis within the framework of reducing the cost of housing, the geographic area, and the trade-offs that households must make with respect to the cost of transportation and the premium that is charged for housing with access to employment and services. Despite different definitions, literature shows a wide range of theoretical frameworks to understand the factors behind the affordability gap in urban housing. A key element of the neoclassical supply-side approach to the problem of unaffordable housing is the focus on barriers to building, including zoning and land and construction costs, as the main drivers of increasing housing prices (Glaeser & Gyourko, 2018). In contrast, critical urban theorists and political economists suggest that the most important factors are the financialization of the housing market, speculative investment, and the transformation of housing from need to commodity. These authors contend that because the global economy and the financial system have prioritized housing as a means of capital accumulation, it becomes increasingly difficult to meet the fundamental needs of the population for a fair and just shelter (Rolnik, 2013; Aalbers, 2016). I will attempt to bring together these different strands of research to build an improved understanding of the challenge of urban housing affordability. I will also consider research from different locations to provide a framework for the availability of housing. The goal of this review will be to highlight the shortcomings in the area of current understanding of the research and to provide a framework for addressing these shortcomings through new directions in research.

# Urban Housing Affordability: Literature Review Increasing the problem of affordable housing in urban centers has become one of the most important socioeconomic issues of our time attracting a substantial amount of attention from economists, urbanists, politicians, and social scholars. Due to the rapid population growth caused by rural-urban migration and concentration of economic opportunities in urban regions, the gap between the housing expenses and income is widening significantly in many metropolitan areas. This problem known as "housing affordability crisis" varies greatly depending on urban contexts but has common roots linked to the supply of housing and various structural inequalities in housing markets. First of all, it is worth noting the changing nature of the issue under discussion. In early studies housing affordability was viewed in very simplistic terms using ratio-based measures such as 30% threshold (the idea of spending no more than 30% on housing costs). However, nowadays many scholars have challenged this approach and suggested considering it in a much wider context paying attention to residual income of households, cost of living depending on geography, and quality of available housing (Stone, 2006; Hulchanski, 1995). In addition to methodological discussions, the literature presents a variety of theories explaining the roots of urban housing unaffordability. The neoclassical economic approaches consider supply problems such as restrictive regulations and zoning, land scarcity, high building costs as primary sources of growing housing prices (Glaeser & Gyourko, 2018). On the other hand, critical urbanist scholars and political economists view the process of financialization of housing markets, speculation, and commoditization of housing as a necessary part of capitalism placing higher importance on making money on renting or selling housing compared to satisfying the basic needs of population. Thus, the purpose of this literature review is to synthesize the ideas proposed in different works to form an overview of urban housing affordability problem and identify important trends in current research. In particular, the literature review will focus on various geographical, institutional, and economic contexts providing the empirical background in this area. Besides, the review will discuss important methodological and policy issues and theoretical approaches.

# Urban Housing Affordability: A Literature Review The issue of housing affordability in urban areas has become one of the most serious socioeconomic problems in the 21st century, receiving considerable attention from economists, city planners, policymakers, and social scientists. With the increasing population in urban areas worldwide due to migration from rural areas and the availability of job opportunities in cities, the gap between the cost of housing and household income has grown very huge in many cities. It is worth noting that the housing affordability crisis manifests itself differently in different regions of the world while retaining certain common features such as a limited number of offers in the housing market along with high demand and inherent inequalities that exist in housing markets. To clarify the meaning of housing affordability, it is necessary to note that the concept of housing affordability has changed significantly since the first scholarly investigations of housing affordability that relied on such relatively simple figures based on ratios as the 30% rule stating that housing costs should not exceed 30% of the household income. However, recent literature has increasingly emphasized the limitations of this approach arguing that housing affordability should be understood in the context of the residual income after housing expenses and taking into consideration the differences in the cost of living across different cities and the quality of the housing stock available (Stone, 2006; Hulchanski, 1995). This change in thinking enabled the emergence of more sophisticated models that describe the experiences of people and their actions in compliance with housing issues. Besides discussions on basic definitions, studies in this area provide a variety of theoretical solutions to the challenges of housing affordability in urban areas. For instance, neoclassical economics provide an explicit explanation of the reasons for housing affordability based on the idea of the supply-side constraints such as zoning laws, availability of land, and the cost of construction (Glaeser & Gyourko, 2018). Meanwhile, critical urbanizations and political economies support the idea that financialization of housing markets, speculation, and commodification of living space are the most important reasons for growing housing prices (Rolnik, 2013; Aalbers, 2016). Thus, the goal of the current paper is to present a thorough overview and synthesis of valuable papers in order to come up with a holistic understanding of housing affordability issue in urban areas and present empirical studies conducted in different geographical settings. Additionally, the review will consider different methodological approaches, address current political issues, and provide scientific theoretical thought of the given problem in order to identify the gaps and weak points in the existing studies.

Housing affordability refers to the ability to pay for adequate housing. For several decades, affordable housing has become a serious concern around the world. Housing affordability has become one of the defining issues of our time. Rapid urbanization, or large population growth in metropolitan areas, has impacted housing markets by creating high demand for housing and driving up prices. Housing affordability crisis is impacting households around the world and disproportionately impacting low-income families. This paper provides an overview of existing literature that studies affordable housing. First, this literature review will define affordable housing and then narrow its focus to look at the affordable housing crisis in cities. The paper will discuss what causes cities to have unaffordable housing prices. Lastly, the paper will go over existing literature around policy solutions to help improve housing affordability. Prior literature has struggled with finding an exact definition of affordable housing. Initially, there was one standard definition of affordable housing being no more than 30% of income going towards housing expenses. Other scholars have since defined affordable housing as “the residual income that remains from household income after shelter costs have been paid” (Stone, 2006). When studying affordable housing literature, it is important to understand that “definitions of affordability vary both within and between countries” (Hulchanski, 1995). Affordable housing can mean different things to different people and is dependent on where someone lives. Affordable housing can also refer to location efficiency or the trade-off between housing costs and transportation costs. When studying literature around affordable housing, it is important to understand why housing is not affordable for so many people. Traditional economics would look at the issue of affordable housing from a supply and demand perspective. There simply is not enough housing supply to accommodate everyone who lives in urban cities. Gyourko and Glaeser’s paper “Urban Constraints on Housing Supply” dives deeper into the economic reasoning behind limited housing supply (2018). Other literature discusses housing as a commodity. Financializing of housing has made housing a prime commodity that people can use to gain wealth. Viewing housing as a commodity means that housing prices are going up because people want to invest in homes and earn money from it, rather than providing houses to those who need shelter (Rolnik, 2013). Examining politics behind housing and how people can use housing as an asset is another way to analyze why housing is not affordable. Aalbers’ article “The Politics of Housing” goes into depth about how housing is used as a political tool (2016).

# Urban Housing Affordability: A Literature Review Affordable housing in urban areas has become a major problem and a number of countries are dealing with it. There are many definitions of the problem but at its heart it is about the cost of housing in relation to the income of households. Economists, urban planners, politicians and researchers from a variety of social science disciplines have all looked at the problem and written about it. Most of the research is about particular countries but there are a number of studies that look at a number of countries. The issues that affect different countries are often similar and the root causes of the problems can be identified as a lack of supply of housing, pressures on housing from demand, and inequality in housing markets. Affordability of housing has, since time immemorial, been viewed from the angle of the so-called ‘30% rule’, that is, housing costs should not exceed 30% of the income of households. In the years that followed this simple ratio-based rule was consistently refined in various studies. Today’s views on the affordability of housing as a multidimensional concept for evaluating housing needs are based on a wealth of research. A key variable here is the so-called ‘residual income’ after deduction of the costs of housing from the total income of a household. Geographically different costs of living, and, last but not least, differences in the quality and location of the available stock of housing, are all variables that are used by researchers today. In addition, in an increasing number of studies, the authors describe the ‘trade-offs’ between, on the one hand, the costs of and requirements for housing, and, on the other, the costs and requirements for a number of other basic needs, for example, for transport, health care and education. Instead of looking at the theories about the reasons for unaffordability of housing in urban environments, it can be more productive to discuss the various approaches, in general, that can be used. Approaches range from a purely supply oriented view (e.g. costs of construction, restrictions on supply in planning regulations, limited availability of land) as used by for example Glaeser & Gyourko (2018), to a more financialized and politicized approach which includes the views of theorists, as well as of political economists, of the financialization of housing, of the increased role of capital in the ownership of housing, and of the effects of speculation, in which housing is increasingly treated as just another commodity (for example Rolnik, 2013; Aalbers, 2016). Drawing from the range of perspectives presented within the body of literature under review here, in a synthesis of theoretical interpretation and empirical evidence, of research methodology and findings presented, Urban Housing Affordability: A Literature Review, seeks within the body of the review itself, to provide outline of current knowledge, of housing market research, on the nature of the urban housing unaffordability challenge that is being encountered, to highlight key gaps in current knowledge and to identify within the scope of the challenge as it is being met, scope for future research.

Urban Housing Affordability: A Literature Review – The ever-growing problem of affordable housing in large city areas is now arguably the largest socio-economic issue facing communities at the start of the 21st century and an area of focus for numerous social science disciplines (including economics, planning, politics), in addition to being a major concern for governments around the world. Cities all over the world are experiencing massive population increases due to increased numbers of people moving from rural to urban areas seeking employment or better working conditions. Due to increasing housing costs relative to household income levels, many metropolitan regions are experiencing what has been described as a “housing affordability crisis”. While this crisis varies in terms of context depending upon the city or region involved, it is commonly attributed to two broad factors: supply restrictions; demand pressure, and inequality in the structure of local housing markets. Over time, the definition of affordability has changed significantly. Early academic studies typically applied simple ratios, such as the well-known 30 percent rule (the idea that housing costs cannot account for more than 30 percent of household income) to define affordability. In contrast, contemporary research has increasingly criticized this reductionist approach and argued that affordability needs to be defined as a multi-dimensional concept that includes: residual income remaining after housing expenses have been paid; geographic variability in cost-of-living; and the type, quality and location of housing available (Hulchanski, 1995; Stone, 2006). As a result of these changes in definitions, scholars have developed new forms of analysis capable of capturing how individuals perceive housing affordability through their lived experiences of insecurity and precarity, and how they balance housing costs against other basic necessities such as food and clothing, transportation, health care, and education. In addition to disputes regarding definitions, there are also a wide variety of theoretical approaches used by researchers to explain why urban housing affordability problems occur. From the neoclassical perspective, researchers argue that rising housing prices are caused by supply side constraints (such as restrictive zoning laws; lack of land available for development; high construction costs); while critical urban theory researchers and political economists argue that the financialization of housing markets (and speculation and commodification of shelter as a commodity) have resulted in the systemic prioritization of using housing as an opportunity for wealth creation rather than its use as a basic human necessity (Aalbers, 2016; Rolnik, 2013; Glaeser & Gyourko, 2018). By integrating different theoretical traditions and methodologies to analyze data collected in multiple locations around the world, this paper seeks to create a complete picture of how affordable housing challenges can vary across geographically distinct and institutionally varied locales. Additionally, this review will engage critically with methods and theories presented in previous research in order to both identify limitations of existing research in addressing urban housing affordability and provide direction for future research.

The paper reviews the literature on urban housing affordability.This paper is a literature review on urban housing affordability. Rising urban housing costs have become one of the most important socioeconomic problems of the twenty-first century, and has been a persistent topic of study for economists, urban planners, policymakers and social scientists, as well as journalists and activists. Across many cities, housing costs outpace household income in relation to growth, especially in developed cities, which are seeing unprecedented growth by rural-to-urban migration and the concentration of economic opportunities. While it might be described as the "housing affordability crisis" in many cases, the dynamic is shared across different urban contexts in regard to housing market supply constraints, housing market demand pressures, and structural inequities within housing markets. Much like housing itself, the definition of affordability has grown and changed since the earliest scholarly approaches which used simple ratio measures that usually have been based on the idea that no more than 30% of household income should go toward housing costs. However, contemporary research has become more critical of this "one dimensional" definition; a multidimensional interpretation is needed, one that includes housing costs after expenditures, regional differences in cost of living and the quality and location of the housing available (Stone, 2006; Hulchanski, 1995). This change in way of thinking has led to the evolution of more refined analysis models that go beyond documenting how and where people live to examining the lived experience of housing insecurity and precarity, as well as the choices that households face about how to allocate resources between housing costs and other critical expenses like transportation, health care, and education. More than definitional questions, literature uncovers an array of theoretical viewpoints that attempt to address the questions of what feeds urban housing unaffordability. According to the neoclassical perspective on economics, the main reason behind high housing costs is because of restrictions on the number of housing units supplied, from tight zoning ordinances to land scarcity and construction expenses (Glaeser & Gyourko, 2018). On the other hand, critical urban thinkers and political economists emphasize the financialization of housing markets, speculative investment and the increasing conversion of housing into a primary asset class, displacing residential housing from its role as a basic human need (Rolnik, 2013; Aalbers, 2016). This review collects this scholarship, weaving it together in order to build a full picture of the housing affordability issue, with an eye to assessing empirical evidence and geographic and institutional variations in the issue. This review sets out to critically examine methodological investigations, policy strategies and conceptual frameworks used in the available literature to pinpoint where there is a lack of understanding on this important challenge for cities and to showcase avenues for continued research.

# Urban Housing Affordability: A Literature Review The rising specter of urban housing affordability represents one of the foremost economic challenges of the 21st century, continuing to capture the attention of economists, urban planners, policymakers and sociologists throughout the world. As unprecedented numbers of people continue to flock to urban areas in pursuit of opportunity and out of economic necessity, the gulf between the price of urban housing and average household income has widened considerably in many metropolitan regions, an issue that some have termed a ‘housing affordability crisis’. Though the exact circumstances may differ from one city to another, all this disparity on such issues can often be found on both the side of limitations in availability and those relating to the demand placed on these limited supplies, as well as systemic inequalities in housing markets. The very notion of “housing affordability” is itself a concept that has expanded beyond its rudimentary early conceptions, whose measures of affordability based on simply looking at house prices versus income, like the 30 percent-housing cost measure, now appear increasingly out of date. More contemporary perspectives suggest that the measurement of affordability cannot merely rely on simple indices but should include non-wage considerations like affordability and its corresponding cost of living in a geographically specific way and factors including the quality of available space (Stone, 2006; Hulchanski, 1995). These wider measures may take various forms, but, importantly, include the more abstract, such as affording such items as transportation, childcare and other costs apart from housing or the ability to be affordably sheltered from such problems. These different theoretical approaches to explaining the causes of housing affordability come as much from varied methodological traditions. Some, in line with classical liberal theory have highlighted supply constraints and regulation issues (Glaeser & Gyourko, 2018), whereas others from critical political Economy backgrounds and urban theorists focus more heavily on new finance capital and international real estate investment as causes of price hikes (Rolnik, 2013; Aalbers, 2016). Within this brief paper, the main arguments of such studies, as well as the associated evidence relating to various other cities, will be discussed to give an updated overview of urban housing Affordability and propose further areas of research and policy that can address some of the deficits in existing approaches and evidence.

Literature Review on the Urban Housing Affordability The intensifying crisis of urban housing affordability is one of the primary socioeconomic problems facing 21st-century cities, engaging economists and public policy analysts as well as social scientists. Global cities face skyrocketing urban population growth, driven by rural-to-urban migration and centralisation of opportunities as well notably accelerated technological change over the second half of the last century has produced a staggering widening in gappiness between housing cost rents versus household incomes since then. The scope and nature of this phenomenon, which often goes by the name "housing affordability crisis", differs between cities but has common dynamics based on both inelasticities of supply with increasing demand due to structural inequalities embedded within housing markets. The housing affordability question has developed a long way since early academic treatments that focused on basic ratio-based indicators (the 30% rule: the proportion of household income devoted to spending on accommodation, assuming it does not exceed 30%). Over time, however, contemporary scholarship has criticized this reductive frame and instead argued that affordability should be conceptualized as a multidimensional construct which incorporates residual income after housing costs are incurred (Stone 2006), variation in the cost of living across space (Hulchanski 1995;); and extent to which available units meet basic quality standards or desirable locational characteristics. This evolution in how we conceptualize housing insecurity has led to sophisticated analytical frameworks capturing the realities of experienced precarity: Compromises (also described as treading water) between price constraints and transport; health, or educational needs [11] among others. However, rather than end at definitional debate, the literature has examined a wealth of theoretical perspectives as to why urban housing is unaffordable. According to neoclassical economic approaches, rising housing prices are primarily determined by long-term supply-side constraints caused by restrictive zoning regulations and limited land supply (Glaeser & Gyourko, 2018). On the other side, critical urban theorists and political economists highlight financialization trends in housing markets; speculative investment around land use; commodification of shelter as an asset class at a fundamental human need (Rolnik 2013 Aalbers & al. This review synthesizes these disparate strands of literature to offer a coherent picture of urban housing affordability, assessing empirical findings collected in heterogeneous geographic and institutional settings. Through critical engagement with methodological approaches, policy interventions and theoretical frameworks used in current research this review identifies knowledge gaps and offers new lines of enquiry for future studies to address a pressing urban issue.

A Literature Review Of Urban Housing Affordability Growing housing affordability crisis in cities over the course of the 21st century became an unprecedented socioeconomic issue, attracting consistent interest by economists, urban planners, policymakers and social scientists. With urban populations exploding around the world — fueled by rural migration and a concentration of economic opportunity — how housing is affording (or not) in many metropolitan areas compared to household incomes has spread greatly. This phenomenon–sometimes referred to as the "housing affordability crisis"—takes various forms across cities, but is often rooted in common causes of supply restrictions, demand pressures, and structural inequities within housing markets. Since the earliest treatments in the scholarly literature of housing affordability, which relied primarily upon ratio-based metrics (e.g., the 30% rule—the idea that housing costs should not exceed 30% of household income), the notion of what it means for housing to be affordable has evolved significantly. Contemporary research, however, has increasingly challenged this simplistic perspective of affordable housing as a static percentage of household income relative to the available housing supply; rather it must be placed in context of residual income left beyond housing costs, geographic and temporal adjustment for cost-of-living-beyond-rent differences and spatial stocks of social indicators (Stone, 2006; Hulchanski, 1995). In response, researchers have begun to create more sophisticated analytic frameworks that build upon the lived experience of housing insecurity and precarity, incorporating notions of trade-offs between rents or mortgage costs and other vital spending such as transport, healthcare and education (see Schwartz, 2023). Apart from definitional disputes, the literature showcases a variety of theoretical perspectives elucidating the causes of urban housing unaffordability. Neoclassical economic approaches focus of the supply-side constraints, notably stringent land-use zoning and a shortage of land (Glaeser & Gyourko, 2018) as the main drivers for increasing prices in housing markets. On the other hand, more critical urban theorists and political economists highlight financialization of housing markets, speculative investment, and commodification of shelter as an object of a core asset class, with many arguments that this process has systematically treated housing as a machine for capital accumulation rather than a fundamental human good (Rolnik 2013; Aalbers 2016). This review brings together these diverse strands of literature and provides a holistic framework for understanding the negotiation of urban affordability that is grounded in large-scale empirical evidence across different geo-institutional settings. Together, these thematic areas guide the review towards points at which methodological approaches, policy interventions and theoretical frameworks used in past work can be critically engaged with alongside major gaps in our current understanding and addressable investigations into this important urban challenge.

Urban housing affordability is a major problem in the world today and a subject that has been explored extensively in academic and professional research. In this review article, I provide an overview of the scholarly literature on urban housing affordability. The problem of affordable housing in cities has received widespread attention and has become one of the defining issues of the 21st century. Many researchers have argued that housing affordability is a major issue for the majority of people in the world and is likely to get worse in the coming years. As cities continue to grow in size and population, they face an increasing number of problems, and one of the most significant is providing affordable housing for their residents. The concept of housing affordability has been debated for decades and the definition has changed over time. The most commonly used measure of housing affordability is the 30 percent rule, which states that a household should spend no more than 30 percent of its income on housing. This standard was first introduced in the 1970s but has been heavily criticized for ignoring the fact that some people spend much more or much less on housing than others. More recent definitions have attempted to take into account other factors such as the residual income available to households after paying rent or mortgage payments, the cost of utilities and maintenance, and the availability of affordable housing. These more sophisticated measures of affordability are useful for identifying the people and communities that are most affected by housing unaffordability and can help guide policy decisions on how to improve housing affordability for those people. There are a variety of different theories about what causes housing unaffordability in cities. One of the main reasons why housing is becoming less affordable in many cities is the increase in the price of land. Because land is limited, developers have to bid up the price of land to acquire it for development purposes. Another reason for higher housing costs is an increase in the cost of construction materials and labor. This can be attributed to a variety of factors, such as rising energy prices, increased regulation, and technological innovations. In some cases, housing affordability issues are caused by a lack of supply in certain parts of the city, such as when there is insufficient land available for residential development or where zoning regulations restrict residential development. In other cases, there may be too much demand for housing in certain areas due to high rates of immigration or population growth. These theories suggest that improving housing affordability is largely a question of supply and demand, with solutions being focused on increasing supply and/or decreasing demand for housing in certain areas. However, critics argue that these theories fail to adequately address the root causes of housing unaffordability in many cities. They point out that while these theories are helpful for describing the immediate causes of housing unaffordability, they do little to explain why housing is becoming more unaffordable in general. For example, these theories cannot explain why housing affordability has declined in cities like San Francisco and New York, where land supply has been relatively stable and demand has remained steady.

# Urban Housing Affordability: A Literature Review The growing challenge of housing affordability in cities is one of the most urgent social issues of the twenty-first century. It has caught the attention of economists, urban planners, policymakers, and social scientists. As cities around the world face rapid population growth due to rural-to-urban migration and the concentration of job opportunities, the gap between housing costs and household incomes has widened significantly in many metropolitan areas. This issue, often called the "housing affordability crisis," varies across different urban settings but shares common factors related to supply limits, demand pressures, and the structural inequalities within housing markets. The idea of housing affordability has changed a lot since earlier studies, which mostly used simple metrics like the 30% rule. This rule suggests that housing costs should not go over 30% of a household's income. More recent research has criticized this basic approach. Scholars argue that we need to see affordability as a complex issue. It should consider leftover income after housing costs, differences in the cost of living across regions, and the quality and location of available housing (Stone, 2006; Hulchanski, 1995). This change in thinking has led researchers to create more detailed frameworks that capture the real experiences of housing insecurity, instability, and the trade-offs that households face between housing costs and other necessary expenses like transportation, healthcare, and education. Beyond these definitional discussions, the literature shows a wide range of views explaining the causes of urban housing affordability issues. Neoclassical economic theories focus on supply-side limits, such as strict zoning laws, limited land, and high construction costs, as the main reasons for rising housing prices (Glaeser & Gyourko, 2018). On the other hand, critical urban theorists and political economists highlight the financialization of housing markets, speculative investments, and the treatment of housing as a valuable asset. They argue that these trends have prioritized housing as a means for making money rather than as a basic human necessity (Rolnik, 2013; Aalbers, 2016). This review brings together these different threads of research to build a clear picture of urban housing affordability. It looks at empirical evidence from various geographic and institutional settings. By critically engaging with the methods, policy actions, and theories used in current studies, this review aims to identify important gaps in our knowledge and suggest areas for future research on this vital urban issue.