This year, the Kinder Institute has a new annual offering: a report on the state of housing in our area. Led by Kyle Shelton and produced by John Park, Carlos Villegas, Luis Guajardo, Chris Servidio, Zhiyan Zhang, the 2020 State of Housing in Harris County and Houston provides a data-based look at housing in the area (Shelton serves on RDA's 2020-1 Board of Directors). The team compared data from 2010 to data from 2018 in order to understand demographic and economic trends. Datasets are also made available for researchers, making the report a critical database for the study of housing in the area.

The research shows that the dream of Harris County and Houston as an affordable area is no longer accurate; now, median sale prices for homes are now larger than median household incomes. Additional notable trends are captured in the report’s key findings, shared below. This effort does contain information about the impact of Hurricane Harvey, but it doesn’t address COVID-19’s effects.

Last month, the Kinder Institute held a virtual event about the report; watch its recording online here

Ahead of our Civic Forum on housing, read the full 2020 State of Housing in Harris County and Houston report here.

2020 State of Housing in Harris County and Houston Key Findings

There are more renters than homeowners in the city of Houston and renters are nearing a majority in all of Harris County. In the city of Houston, renter households already comprise 57% of the population, up from 53% in 2010. In all of Harris County, the proportion of renters has grown to 45% in 2018, up from 42% in 2010.

Nearly half the renter households in Harris County are spending too much on housing. In 2018, about 335,000 renter households (47% of the total renter households) in Harris County paid more than 30% of their income toward housing, classifying them as cost-burdened. Of that number, about 164,000 renter households (23% of all renter households in Harris County) paid rent that was greater than 50% of their income, classifying them as severely cost-burdened. The number of cost-burdened renters in Harris County grew between 2010 and 2018 by 24%.

Far fewer homeowners face affordability issues and the number has declined since 2010. In 2018, 186,000 owner households (23% of the total owner households) in Harris County paid more than 30% of their income toward housing. Of that number, about 76,000 owner households (9.6% of total owner households) paid more than 50% of their income. The number of cost-burdened owners in Harris County declined between 2010 and 2018 by 18%.

Households making the median household income in Harris County have seen median sales prices grow above what they can sustainably afford. The affordability gap—the difference between a home affordable to a household making the median income and the median home sales price—has grown. In 2011, a Harris County household with a median income of $52,675 could afford a $163,121 home without spending more than 30% of their income. That was comfortably above the median sales price of $139,000 and created a surplus of $24,121. By 2018, a household with a median income of $60,146 could afford a $186,256 home, but median home prices had jumped to $220,000, creating a $33,744 gap.

Houstonians must earn $21.02 an hour to pay for an average two-bedroom, market-rate rental. The minimum hourly wage in Texas is $7.25 and a minimum-wage worker would have to work 115 hoursa week to afford this rent—nearly three full-time jobs. Even at a slightly higher median hourly income for low-wage workers of $10.92, this translates to working nearly 77 hours a week (or two full-time jobs). This is particularly problematic because of growth in single-parent households and people living alone, meaning more households are attempting to secure housing on one income.

A quarter of homes face significant flood risk and the number is likely to grow as new maps expand mapped floodplains. In 2018, 1 in 4 homes in Harris County was within the current 500-year floodplain, 100-year floodplain or floodway. As floodplain maps are updated in the future to account for higher risks, more homes will be added to the floodplains and many in existing floodplains will move to higher-risk categories.

Black homeownership dropped significantly in the Great Recession and lags far behind white, Hispanic, and Asian homeownership rates. While all groups saw declines in homeownership between 2010 and 2018, black homeownership fell the most and to the lowest percentage overall. Black homeownership fell from 41% in 2010 to 37% in 2018 across Harris County, and from 36% to 31% in the city of Houston. White homeownership fell from 72% to 68%, while Asian homeownership fell from 63% to 62% and Hispanic homeownership fell from 50% to 49%.

Harris County is the center of the region’s job and economic activity, but the population is growing at a faster rate outside of the county. A range of factors such as lower home prices and perceptions about school quality may be driving the trend and it is creating a mismatch between where people work and live.

This spatial mismatch between work and home results in major transportation costs for Harris County households. The addition of significant transportation costs that come from owning and using a car strains household incomes. The average Harris County household spends a combined 47% of their income on housing plus transportation. There is also a spatial mismatch in connecting existing affordable housing to quality, affordable transit. In the city of Houston, only 1 in 3 affordable units has access to quality transit.

Trends in the construction of new housing show growing multi-family supply. While single-family housing made up 64% of the existing housing stock in 2018, large multi-family development accounted for almost 50% of all new residential development in Harris County and nearly 60% in Houston. This is in response to changing market demand and household composition trends, as well as public incentives such as the Downtown Living Initiative.

While many units are being built, they tend to be higher priced, and existing affordable units are declining. The share of rental units below $800 declined between 2010 and 2018. Median gross rents rose 8% in both Harris County and the city of Houston.

The makeup of households is trending away from the nuclear family of four as the overwhelming demographic. Households consisting of people living alone, couples without children, single parents and unrelated housemates are all on the rise. These shifts are also leading to changes in housing needs and responses from the market.

Growth of people over the age of 65 and those with disabilities may present housing and service provision challenges to both Harris County and the city of Houston. Rapidly aging populations are concentrated in the suburbs and outer edges of Houston.

Heads of households between the ages of 25 and 39 are settling equally between Harris County and the city of Houston, though families with children continue to locate outside of the city. In both Harris County and the city of Houston, the number of residents between the ages of 25 and 39 grew by 15% between 2010 and 2018. In Houston, this growth was concentrated inside the 610 Loop in more walkable, multi-family heavy, amenity-rich neighborhoods. In Harris County, suburban areas saw massive growth in this population, especially farther-out places where home prices tend to be lower. In all of Harris County, 38% of households have children, compared to 33% within the city of Houston.

Both Harris County and Houston continue to be racially diverse overall. The most diverse neighborhoods are attracting more diversity, while most racially segregated communities continue to lose diversity. Hispanics are integrating into several historically Black neighborhoods. Black and white residents are declining in the city.

Both Harris County and the city of Houston are seeing more people of different income levels living in close proximity. At the same time, many predominantly high-income and low-income areas have seen income-based residential segregation intensify. The neighborhoods with the most income diversity are situated within the city of Houston and especially inside the Loop, signaling that some income diversity may be coming as a result of gentrification and in the future income segregation could worsen. Many wealthier and low-income areas grew even more segregated by income.

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