A comprehensive housing needs analysis relies on identifying both the primary sources driving housing demand and the additional challenges faced by specific populations who are already housed. Addressing these sources of housing demand is essential for fostering sustainable, equitable, and vibrant communities.
While primary sources focus on households that require entirely new housing units and rely on projections to anticipate future housing demand, additional sources point to those experiencing issues such as cost burden, substandard housing, or overcrowding and highlight opportunities to improve housing quality, affordability, and accessibility for those already housed. Together, communities can develop comprehensive and inclusive strategies that promote affordability, accessibility, and quality housing for all.
This article delves into these two critical components of determining housing demand, offering insights into their definitions, importance, and impact on housing development.
Primary Sources of Housing Demand
Primary sources represent the foundation of housing demand, emphasizing the need to create new units to accommodate household growth and shifting demographics. These factors are largely projection-based, providing insight into future housing needs and informing proactive development planning.
Household Growth
Household growth refers to the net increase in the number of individual households in a given location. This number is driven by factors such as population increases, migration, and changes in household formation patterns. This source of demand is projection-based, using historical trends and localized factors to estimate how the number of households will grow over time.
As the number of households grows, so does the demand for housing, impacting both rental and ownership markets.
Taking Action: Communities must anticipate this growth by planning and developing housing options that cater to diverse income levels and household types, ensuring long-term stability and the ability to meet future needs.
Housing Due for Replacement (Aging Into Obsolescence)
Housing due for replacement includes homes that are projected to fall out of use due to age, disrepair, or structural deficiencies. Projections for this source rely on historical rates of housing obsolescence and removal, often informed by regional or national data.
As homes age, they may become unsafe or unsuitable for occupancy, reducing the overall housing supply. This issue disproportionately affects lower-income households, as older, more affordable homes are often at higher risk of becoming uninhabitable.
Taking Action: Communities must ensure that new housing development accounts for anticipated losses, maintaining an adequate supply of safe and livable housing across all income levels.
Potential Relocating Workers (Worker Share Local)
This source measures the potential demand from workers employed in a community who might prefer to live closer to their workplace if suitable housing options were available. Unlike the other sources, this is not projection-based but rather an assessment of current conditions and preferences.
By understanding the proportion of workers commuting from outside the community and gauging their likelihood to move locally if housing were available, communities can identify opportunities to attract new residents. Encouraging more local workers to reside within the community reduces commuting times, enhances work-life balance, and strengthens local economies through increased engagement and spending.
Taking Action: Addressing this demand requires developing diverse housing options that align with workers’ incomes, family needs, and lifestyle preferences.
New Households Formed by Younger Adults
Younger adults transitioning from living with parents or guardians to independent living represent a significant, though often latent, source of housing demand. This source uses a combination of historical data and projections to assess how many young adults might seek independent living arrangements under improved economic conditions.
In recent years, factors such as student debt and high housing costs have led to historically high rates of young adults living with their parents. However, many would prefer to form independent households if affordable and flexible housing options were available.
Taking Action: Communities can address this pent-up demand by developing entry-level rental properties or starter homes. This will help reduce multi-generational living and stimulate growth in the housing market.
Additional Sources of Housing Demand
In contrast to primary sources, additional sources highlight challenges faced by households that are already housed but are experiencing problems with decreasing affordability and quality, or space constraints. These sources focus on improving existing housing conditions rather than projecting future demand.
Cost-Burdened Households
Cost-burdened households spend more than 30% of their income on housing, with severely cost-burdened households spending over 50%. This is not a projection but an assessment of current housing affordability challenges within the community.
Cost burdening often places significant financial strain on households, limiting their ability to afford other essential expenses such as healthcare, education, and transportation.
Taking Action: Addressing the needs of cost-burdened households involves increasing the supply of affordable housing, providing rental assistance, and creating pathways to homeownership through subsidies or targeted development initiatives.
Renters Interested in Upgrading
This group includes renters who are not financially strained but may seek to upgrade to higher-quality units or transition to homeownership. This is also an assessment of current market conditions rather than a projection.
These households influence market dynamics by creating demand for mid-range or higher-end housing.
Taking Action: Meeting this demand requires the development of housing options that appeal to renters seeking improved amenities or features, while also freeing up more affordable units for lower-income households.
Overcrowded Households
Overcrowding occurs when the number of occupants per room exceeds 1.01, with severe overcrowding defined as more than 1.51 occupants per room. Like cost burdening, this is a measure of current housing challenges, not a projection.
Overcrowding often results from a lack of available or affordable housing of adequate size, leading to diminished quality of life and safety concerns.
Taking Action: Communities can address this issue by increasing the availability of larger housing units or splitting overcrowded households into multiple homes.
Substandard Housing
Substandard housing includes units that lack basic facilities such as complete plumbing or kitchens, or those with structural deficiencies. This source reflects current conditions rather than future projections, highlighting the need to rehabilitate or replace unsafe or inadequate housing.
Taking Action: Improving housing quality is essential for ensuring that all residents have access to safe, livable homes, which in turn enhances the overall appeal and livability of the community.
To effectively meet housing demand, communities must go beyond simply increasing the number of units. Housing strategies should be tailored to align with the income levels, ages, and tenure preferences of residents.
For example, lower-income households often require affordable rental options, while middle- to upper-income households may seek opportunities to purchase homes or upgrade to higher-quality rentals. Similarly, younger adults forming new households typically favor flexible and affordable rental units, while older adults may require age-appropriate housing with accessibility features.
Additionally, the balance of rental and ownership housing must reflect the preferences and financial capacities of residents to ensure equitable access across all demographics.
By considering these nuances, communities can craft housing policies and development strategies that are responsive to current challenges and adaptable to future demands. This approach ensures that all residents have access to safe, affordable, and appropriate housing that meets their unique needs.
If your community is looking to better understand its housing needs or is ready to develop actionable strategies to address them, Camoin Associates offers unparalleled expertise in housing studies, market analyses, and strategic planning. Contact us to learn more about how we can support your goals.
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