The Growing Gap: Housing Costs Outpacing Wages in Kansas City

January 26, 2023 | Current Events

In recent years, Kansas City has experienced a significant surge in housing costs, creating a daunting challenge for many residents. As housing prices climb, wages have not kept pace, leaving countless individuals and families struggling to make ends meet. This growing disparity has left families in strained situations and in some circumstances homeless.

The Growing Gap Housing Costs Outpacing Wages in Kansas City

The Escalating Cost of Housing

Kansas City, once known for its relatively affordable housing market, is now facing a sharp increase in both rental and homeownership costs. According to recent data, the average rent in the city has risen by over 30% in the past five years, while home prices have seen similar hikes. This rapid inflation has put a strain on many residents, particularly those with lower incomes.

Stagnant Wages

While housing costs have soared, wage growth has remained relatively stagnant. The average wage increase has been insufficient to match the rising cost of living, leaving many workers with less disposable income and more financial stress. For instance, a recent study found that wages in Kansas City have only increased by about 10% over the past five years, far below the rate needed to keep up with housing expenses.

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Home Prices vs. Income Statics

  • Home values have surged 162% since 2000, while income has only increased 78%.
  • Since 1985, house prices have risen at twice the rate of income, and since 2000, they have increased 2.1 times faster.
  • If home prices had grown at the same pace as income since 2000, the median U.S. home would be nearly $294,000—about 32% less than today’s median price of $433,100.
  • To afford a home, Americans need an average income of roughly $166,600, yet the median household income is just $74,580.
  • The average house-price-to-income ratio in the U.S. is 5.8, more than double the recommended 2.6.
  • None of the 50 most-populous metros in the U.S. have a home-price-to-income ratio at or below the recommended 2.6.
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The Impact on Families and Individuals

The Impact on Families and Individuals

The disparity between housing costs and wages has far-reaching consequences for the community. Many families are forced to allocate a significant portion of their income to housing, leaving little for other essential needs such as food, healthcare, and education. This financial burden can lead to increased stress, deteriorating mental health, and a lower quality of life.

Additionally, the lack of affordable housing options have contributed to a rise in homelessness. Families who were once able to sustain themselves are now finding it increasingly difficult to keep a roof over their heads. The ripple effects of this crisis are felt throughout the community, impacting schools, healthcare systems, and local economies.

What This Means

No one is immune from housing issues and a family’s situation can change in the blink of an eye. It can leave families in situational homelessness which disrupts all aspects of a person’s life. It affects adults and children not only physically but also emotionally and can interfere with employment and education. Community LINC continues to provide families experiencing homelessness and encourages everyone to get involved to end not only the housing crisis but also homelessness.