The list of institutions and experts labeling Houston homes as unaffordable and unsustainable is growing. According to Rice University’s fifth annual sustainability report, the city has crossed the threshold into unaffordable.
In recent months, we have published several reports on the perceived overvaluation of the Bayou City’s market, but the retort from community insiders has often been delivered from a defensive posture.
In a recent Viewpoints, we featured author and real estate coach Mitch Stephen, who said of the Houston market: “If someone is willing to pay for it, how can it be overpriced? It’s a quandary I’ve never been able to settle.”
In its report, Rice University’s Lester King, a research fellow at the school’s Shell Center for Sustainability and the author of the report, said that while Houston is regularly touted for its affordability, the fact is that the city ranks only 26th nationally when compared to metro markets with more than 250,000 people.
His analysis was derived from a combination of Census data and research from the Center for Neighborhood Technology. King used the U.S. Department of Transportation’s benchmark for determining affordability, which suggests that individuals should not spend more than 45 percent of their household income on combined housing and transportation. In Houston, the average percentage of salary dedicated to housing and transportation is just over the threshold at 46 percent.
West Loop Houston’s New “Most-Coveted Real Estate”
It does not help matters that of the affordable, public housing available in Houston, some units are being occupied by families who don’t even fall below the poverty line. According to a report from the Texas Tribune, in Houston, this problem is especially pronounced. Forty-six families in the city’s public housing units made more than the $42,650 limit, and each received subsidies from the government to pay help pay rent. One family in particular made over $94,000 a year – more than $52,000 over the cap.
In recent months, Houston’s overall inventory has made progress towards more sustainable levels, but a dissection of the finer details shows that it’s mostly the higher end of the market feeling any benefits.
“Based on our analysis, there is no factual basis for continuing to refer to the ‘Inner Loop’ of Houston as the most-coveted real estate,” King said. “This rhetoric should be replaced with ‘the West Inner Loop.”
King’s report found that of Houston’s council districts C and G, which make up the West Loop, nearly all developments are “unaffordable by national standards of affordability.”
The city will be holding a mayoral and city council election in early November, and it is here King hopes Houston residents will be able to show their concern for the state of city living and growing concern over home prices.