Housing is quickly moving out of reach for the average American in many places, and not only in superstar cities like New York and San Francisco. Here at CityLab, my colleague Tanvi Misra recently showed that the average American needs to earn $19.35 per hour to afford the average two-bedroom apartment—more than two and a half times the minimum wage.
But the growing wage gap means that the housing crunch hits low-paid service and blue-collar workers harder than more highly paid knowledge workers. To get at this, myMartin Prosperity Institute colleague Charlotta Mellanderand I did a simple calculation of how many years of working wages it takes to cover housing costs for three very different groups of workers: the highly paid creative class, the much lower-paid service class, and the declining ranks of blue-collar workers. Our analysis covers roughly 300 metros, using data on estimated home values from Zillow, and on wages from the Bureau of Labor Statistics.
A caveat: Our calculations look at the number of years of working wages it would take to pay for the purchase-price of a home, and do not take on the added expense of mortgage interest, which would drive the cost (and thus, the number of years it would take to pay for a home) up even higher.
[For more of this story, written by Richard Florida, go to http://www.citylab.com/housing...thursday-618/395891/]
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