What are some of the key obstacles that we confront today which surround the availability of affordable housing?
There are many factors that affect affordable housing. Perhaps looming largest at the moment is the fact that foreclosures have increased greatly in recent years. The banking industry devised a system whereby stock dividends and payouts were based on mortgage-backed securities, and many of these mortgages were defaulted on, which caused the stock market and much of the American economy to collapse almost overnight in 2008. This crisis in the mortgage industry has made it difficult for low-income buyers to procure mortgages, because mortgages are now more difficult to obtain, and previous homeowners are finding it difficult to fix their credit in the wake of foreclosure.
Affordable housing is also affected by the large number of derelict homes and apartment buildings in many areas. Houses left empty due to foreclosure are owned by banks who have little incentive to sell them, especially when foreclosures occurred in places where a failing economy caused many people to lose their homes (Florida is a good example of this: a housing boom in the 1990s created many jobs for builders, but the boom ended, and many houses were left unfinished, and many homeowners lost their jobs) These bank-owned homes are usually not maintained very well (most of the management companies keep the grass mowed to prevent fines, but title else is done in most cases), and are vulnerable to vandalism and mold, which can drive up the cost of rehabilitation.
Also, copper thievery is a major issue; many of these empty houses have their copper wiring and pipes stolen by thieves who can get money for the scrap metal. This means that an empty house that might have only needed a small amount of money to be made livable would suddenly need all new plumbing and electric systems, which can cost upwards of $30K; that keeps these fixer-uppers out of the hands of buyers who can't afford these rehab costs. Renters who would like to own homes cannot afford both the cost of a mortgage and the cost of rehabilitation, especially since fixing up a home can include big-ticket expenses such as new plumbing systems or a replacement roof.
Large cities sometimes face housing shortages, especially in cities with high turnover due to transient populations such as college students or contract employees. Boston is facing this issue and the shortage of available housing, as well as a "real estate bubble" that has been increasing over the last decade, is driving rental prices up enormously.
Another reason for a lack of affordable housing is that rent control and rent stabilization, once a staple in large cities, has been largely eliminated. The rules of this system stated that rents could not be raised based solely on market values because in large urban real estate markets, this could prove unfair to tenants. New York City once had a widespread system of rent control and stabilization; now it is one of the most expensive housing markets in the world, and rent control has all but disappeared.
Another obstacle to affordable housing is the fact that wages have not kept pace with inflation, and this means that the percentage of income usually devoted to housing costs has had to increase; the acceptable percentage was once 25%, but many people use now devote 30, 40 or even 50% of their income to maintain housing, especially in high-rent cities like New York, San Francisco and Boston.