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Racial Inequities in Housing Affordability

This is the second chapter in a series of research articles on racial inequities in housing produced by the Chandan Economics Research Team. Other posts in this series can be found here: 1. Racial Inequities in Household Wealth ; 3. Racial Inequities in Access to Credit


As discussed in the first article of our series, a legacy of racial discrimination in US real estate, lending practices, and public policy has culminated in a historic racial homeownership gap that remains wide today. Further, disparities observed in homeownership also have a residual effect on housing affordability more generally.

Income-Constrained Renters

Moving into 2023, housing affordability has become an increasing challenge for the US economy as shelter prices settle near generational highs. According to the National Low Income Housing Coalition (NLIHC), no state has an adequate supply of rental homes for its lowest-income renters. Among the 50 largest US metros, the highest number of affordable and available homes per 100 extremely low-income renters is Providence, RI, with 50.

Housing affordability is also observable through the lens of racial equity. Lower homeownership rates alongside lower average annual incomes [1] have meant that Black, Native American, and Hispanic households are more likely to be income-constrained by rental costs.

According to Chandan Economics’ calculations of 2021 American Community Survey data [2], 31% of Black renter households [3] and 29% of Native American or Alaskan Native renter households currently fall at or below the poverty line. Roughly 23% of both Hispanic [4] and Multiracial [5] renter households sit at or below the poverty line, compared to 20% of Asian [6] and White households.

Another residual effect of higher constraints for lower-income minority households is higher average cost burdens for higher-income White households. According to a 2019 National Low Income Housing Coalition (NLIHC) review, White renters are likelier than non-white households to have incomes above 80% of area median income— a standard metric for measuring housing affordability. However, White renters with higher incomes are more likely to be housing cost-burdened compared to non-White renters with similar incomes.

Household Crowding

While measuring someone’s housing costs relative to their income is an obvious starting point to gauge affordability, looking at how much space is available to each house member can be another valuable guide. Previous research by the US Department of Housing and Urban Development (HUD) on housing’s effect on various human outcomes, including health, education, and development, found an association between household overcrowding and adverse consequences for adults and children.

Our analysis specifically looks at the percentage of renter households with less than one bedroom per person. According to a Chandan Economics analysis of 2021 American Community Survey data, Hispanic and Native American/Alaskan Native renters experience the most household crowding, with 29% and 25% of the respective populations sharing a bedroom with at least one other person. 21% of Multiracial and 20% of Asian renters live in units with less than one bedroom per person.

Black and White renters are significantly less likely to experience household crowding than other races or ethnicities, but a notable gap between the two cohorts remains. 12% of Black renters live in a unit with less than one bedroom per person, while just 8% of White renters do.

It is significant to note that differences in social and cultural preferences make it difficult to extrapolate major conclusions from these data. Further, historical inconsistencies in how demographic information was surveyed in previous Census studies somewhat limit our ability to conclude causality. Still, measuring average space availability— particularly in renter households— provides a practical way of analyzing crowding and its associated risks.

Broader Economic Impacts

The effects of income constraints stretch beyond simply the stress of paying rent. In a 2019 paper studying housing's impact on upward mobility, researchers at The Urban Institute compiled evidence showing how high shelter costs can limit future economic success. Individuals who spend a higher share of income on housing are more likely to experience slower savings accumulation. Moreover, high-cost burdens can often push people into lower-quality housing over time without much savings upside. The lack of affordable and available housing also drags local economic output, as residents spend less of their income on non-housing needs.

Our research on racial inequities in housing continues in our next article, where we will discuss disparities in credit access and access to non-housing financial assets. Below is our full schedule of article releases—

  1. Household Wealth — February 2nd, 2023

  2. Housing Affordability — February 7th, 2023

  3. Credit Access — February 14th, 2023

  4. Housing Quality — February 16th, 2023

  5. Policy Considerations — February 21st, 2023


[1] Based on Chandan Economics’ calculations in “Racial Inequities in Household Wealth [2] For conciseness, the analysis excludes respondents who indicated “Other” as their racial identity. [3] Results are based on data from head-of-household respondents only. [4] Refers to respondents who identified as Hispanic, regardless of their identifying race, which is a separate question on the ACS. [5] Multiracial households are calculated using a weighted average of respondents who identify as two major races or three or more major races. [6] Asian households are calculated using a weighted average of respondents who identify as Chinese, Japanese, or Other Asian and Pacific Islander.

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