Baltimore Housing Supply Demand
The reason that supply and demand, the majority of “affordable” places are somewhere there is the least demand relative to supply. Where the supply of available housing is fewer than the demand, low and reasonable income households frequently struggle to obtain housing that is reasonably priced. In the Baltimore housing markets, rising land values often outpace rising incomes. Such housing markets often have a limited supply of residential land, or a number of regulations that make it hard or expensive to increase housing supply at rents reasonably priced to clients at income ranges below the local average.
Determining demand is complex, and subject to dissimilar views. It can be calculated in terms of the costs for housing, housing type (such as apartments vs. single detached homes, or the size and configuration of units, including number of bedrooms) and location for housing (relative to commercial/employment centers, transportation infrastructure, schools and other community resources.) An explanation in computing housing demand is making a distinction between the “ability to pay” that some households have, and the “willingness to pay” of households for certain housing types in certain locations.
When a place has attributes that trigger high degrees of “willingness to pay”, prices often rise due to the finite supply, thereby changing that place’s relationship to household “ability to pay”. When a place has attributes that make it undesirable, the willingness to pay is reduced and the price falls. This explains why some places within an otherwise unaffordable area (measured in the aggregate) remain very affordable, such as a distressed inner city neighborhood in an otherwise expensive city.
In the United States, a key element in determining affordable housing is acceptable commuting time/distance. In Washington DC, for instance, a household’s residents necessity to decide whether to pay more for housing or to keep commuting time and expense low, to accept a long and/or expensive commute to Baltimore in order to obtain “better” housing.
Posted by Carlos Sagastume on April 24, 2009. Filed under HUD Homes.
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