WASHINGTON, DC–The Urban Institute recently developed the housing affordability for renters index (HARI), a measure that examines the 20 most-populous US metropolitan statistical areas. HARI, which the Urban Institute developed in response to what it felt was a critical flaw in housing affordability measurements, found a few surprises about some of these cities, write Laurie Goodman and June Zhu in a blog post.
Namely: San Francisco, Seattle and Washington, DC, are more affordable for local renters than other measures indicate. The index also shows that, nationwide, more than one in four renters have incomes that put homeownership within reach.
The flaw HARI tries to address is the focus by current measures on median incomes and median home prices, “both of which fail to provide information about the distribution of the incomes and area home prices,” they wrote. The HARI index focuses only on renters' ability to become homeowners, comparing renters in each income decile with recent homebuyers in the same decile.
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