An explosion of job growth in the hearts of America’s largest cities has driven the recovery from the worst economic recession in modern history, sending wages soaring and unemployment rates plummeting.
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But along with a growing number of high-wage, high-skill jobs, home prices are rising in urban cores at a much faster clip than in suburbs or rural areas. It’s an indication that the decades-long trend of upper-income residents moving out of urban areas is reversing itself.
Increasingly, metropolitan leaders say that higher housing prices are threatening their middle class, forcing residents to choose between exorbitant housing costs or long commutes from the suburbs.
“We’ve had such great business opportunity and growth, but with it has come great challenges,” Seattle Mayor Jenny Durkan said in an interview. “We’re really a city where people can’t afford to live anymore. A lot of people of color have been displaced and pushed out of the city, the middle class can’t afford to live in Seattle.”
“We are challenged with workforce housing. These are people who are working hard every day, these are families where people are going to work 40 hours a week and yet don’t make enough to afford housing without being overburdened,” Denver Mayor Michael Hancock said. “The middle class is being squeezed out.”
The median single-family home in the United States sold for $235,500 in 2016, according to data compiled by the National Association of Realtors, up 59 percent since 2000 — and up 36 percent since 2011, when housing prices bottomed out after the recession. In cities like San Francisco and San Jose, Calif., the median cost of a home is now more than $1 million.
The cost of renting a home is rising, too. Between 2011 and 2017, the median rent in the nation’s 36 largest urban areas rose nearly $400 a month, or about 20 percent, according to the real estate firm Zillow. The median rent in San Francisco and San Jose is now about $3,500 per month. In nine other cities — Boston; Seattle; Washington, D.C.; San Diego; New York; Dallas; Denver; Austin, Texas, and Sacramento, Calif. — the median rent is north of $2,000 a month.
