Good News on Housing Affordability in Missouri
Forget the Academy Awards, the 16th annual Demographia International Housing Affordability Survey has just been released! It has some great information about the two biggest cities in the Show-Me State. Both Kansas City and St. Louis still score well on housing affordability compared with other cities, but both cities are becoming less affordable over time.
To measure affordability, researchers divided the median house price within a region by the median household income. Regions scoring under 3.0 are considered affordable. The regions examined don’t just include cities; researchers examined metropolitan statistical areas, often including the several counties surrounding an urban area. So the Kansas City and St. Louis regions include a number of more suburban municipalities as well.
Rochester, New York earned the best score out of the major housing markets, with a score of 2.5. St. Louis was tied for fourth most affordable with a score of 2.8. (This is up from St. Louis’s 2010 score of 2.6.) Kansas City fell within the top 20 with a score of 3.3 among major housing markets, but this too is an increase from previous years. In 1990 and 2015, Kansas City’s scores were 2.3 and 2.9., respectively.
Missouri’s cities have often benefitted from relatively low costs of living, driven largely by housing costs. This is due in part to a lack of a certain kind of land-use regulations that became prevalent in cities in places like California, Oregon and Washington. Missouri and its cities ought to be congratulated for avoiding these pitfalls.
As Kansas City and St. Louis seek to increase housing affordability, they ought to remember that their successes so far stem largely from avoiding overregulation. Many policies, despite being well intentioned, only increase costs by restricting availability.