Skip to main content

The FRED® Blog

Why is it so difficult to live where you work? Housing costs and homeownership in economic centers


In some areas of the U.S., housing has become so expensive that people find it difficult or impossble to afford housing anywhere near where they work. The recent focus on the homeless population in Los Angeles highlights the most extreme form of this situation: Many of the homeless in that area are not only employed, but also are experiencing homelessness for the first time. Unaffordable housing and long commutes are particularly burdensome for low-income individuals, but these issues have consequences for all Americans. (Check out a previous FRED blog post on the distribution of commute times in the U.S. for more information.)

The maps in this post show U.S. county-level data from 2016 for two concepts: the homeownership rate and burdened households. Both depict a spatial representation of affordable housing in the U.S. Homeownership is clustered away from urban centers. Counties such as Los Angeles, Suffolk, and Cook (home to the cities of L.A., Boston, and Chicago) report homeownership rates of 48, 37, and 54 percent, respectively, significantly lower than the national average of 70 percent.

Burdened households lack access to affordable housing, which the U.S. Department of Housing and Urban Development defines as “housing for which the occupant(s) is/are paying no more than 30 percent of his or her income for gross housing costs, including utilities.” The maps show that the least affordable housing, represented by low homeownership rates and a high density of burdened households, lies in urban areas rich with economic opportunity.

Living close to work has a significant beneficial impact on employment and happiness. If they can choose to, individuals are likely to live closer to where they work; and workers with accessible jobs are more resistant to joblessness and long periods of job searching. Proximity matters the most for low-income residents, who are more constrained by housing and commuting costs. Hence, accessibility to employment increases the chances not only of working but also of escaping welfare.

More affordable housing has the potential to increase efficiency and optimization, key concepts in the study of economics: Low-income residents might gain greater economic mobility, and more high-skilled, talented individuals might move into urban areas to help maximize the economic potential of those areas. Also, the average American might simply be able to cut down on time spent in traffic getting to work.

How these maps were created: From GeoFRED, click “Build New Map.” From the “Tools” menu, select “County” as “Region Type” and expand the “Data” selection. Under “Data,” search for “Homeownership Rate” and then “Burdened Households.”

Suggested by Elizabeth Tong and Christian Zimmermann.



Subscribe to the FRED newsletter


Follow us

Twitter logo Google Plus logo Facebook logo YouTube logo LinkedIn logo
Back to Top