Cities Housing
July 7th, 2010 2 Minute Read Press Release

New Report: Ranking the Jobs-Housing Mismatch in U.S. Metros

In terms of job growth and housing availability, North Carolina cities lead the way while California falters

NEW YORK, NY – Americans are heading back to the office, but with the return of in-person work comes an unpleasant sidekick—rush-hour traffic and punishing commutes. The return to the office makes clear an inconvenience to which pre-pandemic workers had grown all too accustomed: the housing supply and public transit infrastructure of some of America’s fast-growing metropolitan areas are ill-suited to accommodate the workforce growth.

Just how bad is the discrepancy between job demand and convenient housing supply? In a new report for the Manhattan Institute, senior fellow Eric Kober investigates the jobs-housing mismatch, comparing the ratio of job growth and housing supply in different metros across the country, and making assessments about the loss in productivity and capital that result when cities can’t comfortably accommodate their workforces in housing that is both affordable and conveniently located. He finds that North Carolina is particularly well positioned to support positive growth, with three of its metros rounding out the top four in terms of job growth and housing availability. In contrast, three of the four metros at the bottom of the list are located in California, a state where housing availability fails to keep pace with job demand.

Kober explains that the labor force in the metros with a high mismatch between jobs and housing production becomes tilted, over time, towards occupations that typically pay enough for workers to afford elevated housing costs. In these conditions, the share of workers in lower-paid occupations falls, as well as the less educated workers who fill those jobs, and the industries that need large numbers of such workers gravitate toward the metros where housing construction keeps pace with job growth—and thus where housing is more affordable to workers at a range of income.

The nation pays an economic price for this redistribution of labor; many workers can’t move to metros where they could be most productive. If the high-mismatched metros were better suited to house less educated workers, their greater productivity would increase overall GDP. Meanwhile, Kober suggests that cities that do boast positive ratios of housing to jobs should turn their attention to politically difficult discussions about how housing growth materializes. Many metros continue to depend on the growth of single-family housing on undeveloped land along highways, a pattern that ultimately becomes too spread-out and congested to sustain a growing area as a unified labor market. Denser, less sprawling housing alignments would improve traffic patterns and spur public-transit use.

Click here to read the full report.

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