The 11th Annual Demographia International Housing Affordability Survey found that out of 86 major metropolitan markets in nine different countries, Detroit’s housing market is the most affordable. The survey, perhaps one of most comprehensive collections of housing affordability data available from international markets, looked at 378 markets in Australia, Canada, China, Japan, Ireland, Singapore, New Zealand, the United Kingdom, and the United States.
In total, the survey found 14 affordable metropolitan housing markets, and they were all located in the United States. Detroit also topped that list. Grand Rapids also made an appearance in a four-way tie for fifth place with Pittsburgh, Cincinnati, and Saint Louis. Though the U.S. had the largest number of affordable markets, it also had the highest number of least affordable markets. Of the 10 least affordable housing markets, four U.S. cities – San Francisco, San Jose, San Diego, and Los Angeles – all made the list.
What Is “Affordable”
To be considered affordable, median housing prices had to remain less than three times the median household income. Detroit, as the most affordable metropolitan housing market, was found to have median house prices at 2.1 times the median household income. In Hong Kong, the least affordable metropolitan housing market, the median house price was 17 times greater than median household income.
When the survey considered all housing markets, not just metropolitan ones, Detroit came in sixth place after a five-way tie for first. Limerick, Ireland topped the list, as did Rockford, Ill.; Terre Haute, Ind.; Utica, N.Y.; and Youngstown, Ohio.
Of all the countries surveyed, Australia had the highest number of severely unaffordable markets. 33 out of 51 communities had housing prices at more than five times the local median income. The U.S. fared better: only 25 out of 242 markets were designated as severely unaffordable.
What’s Behind Housing Prices
What contributes to increased housing prices? Land restrictions. The survey notes, “In every case where severe housing affordability has been identified in the 11 year history of the Demographia International Housing Affordability Survey, there are significant land supply restrictions.” These land restrictions often coincide with urban containment policies, which seek to halt the growth and land use of urban areas. The reduced land supply forces housing prices to increase because there isn’t as much residential land available to buy.
If Detroit as a region wants to keep its housing market at an affordable level, according to ideas presented in the survey (less than three times median household income), the city needs to avoid urban containment policies that strive to reduce the amount of residential land for sale. Depend
If there’s anything the Detroit area has done a lot of, it’s suburban sprawl. Our housing policies for decades have discouraged multi-unit, dense development. First, for racial reasons, as Detroit city councils in the early part of the last century believed dense development attracted “undesirable” minorities, and then as times changed that reasoning was replaced by one supporting a car-centric culture.
Most Affordable Metropolitan Housing Markets, Mapped
-Map Source: Google, The New Zealand Herald
What were the least affordable cities in the world? As well as Hong Kong, China, Vancouver, Canada and Sydney, Australia rounded out the list.
