Stress and the City

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Stress and the City
Arquitectonica’s forthcoming 606 West 57th Street (at right) in New York. The 40-story building will have 1,028 units, 224 of which will be affordable. The rendering depicts Bjarke Ingels’s future Pyramid building in the background.

It’s a well-known story by now: in the wake of a shift toward city living, and as housing prices continue to rise and wages stagnate, middle-class Americans are being squeezed out of urban centers. The problem is not isolated to high-cost cities. A New York Times analysis found that median rent is more than 30 percent of the median income in 90 U.S. municipalities, surpassing the federal government’s benchmark indicating when a household becomes “burdened.” Nationwide, half of renting households spend a third of their gross income on rent, while their median income hovered at $32,500 in 2012 (as compared to $50,500 for all households)—approaching its lowest level in nearly 20 years, according to the Joint Center for Housing Studies at Harvard University. To combat this trend, staving off an exodus of the workforce and addressing growing income inequality, a number of cities are experimenting with a range of innovative ideas to create affordable housing.

A mix of forces is driving up housing prices in top markets. Urban populations are growing as young millennials and retiring baby boomers move to cities, while wealthy foreigners see American real estate as a safe place to invest. Add to this the fact that land and construction costs are high at a time when federal funds are dwindling, making it difficult to finance affordable developments. []