Report

The Hidden Costs of the Housing Crisis: The Long-Term Impact of Housing Affordability and Quality on Young Children's Odds of Success

  • December 16, 2008
  • By Joydeep Roy,Melissa Maynard, and Elaine Weiss

The current subprime lending and foreclosure crisis has elevated the importance of housing in the eyes of the public, the media and policy makers. However, a broader affordability crisis has been worsening for many years, threatening the well-being of many more Americans, especially young children. In recent years, researchers have found substantial evidence linking housing to a range of influences and outcomes with long-lasting impacts that are particularly critical to the health and education of children. These impacts have serious economic consequences for society as a whole; the preschoolers of today will become tomorrow's college graduates or high school dropouts.

Today's housing issues will thus ripple through the economy for decades. This report, written for the Partnership for America's Economic Success by Joydeep Roy of the Economic Policy Institute, and Melissa Maynard and Elaine Weiss at the Pew Center on the States, examines the links between housing and education in the United States, focusing on implications for cost-effective policies that have a real impact. The report sets out the different ways in which a lack of affordable, safe and decent housing hampers children's educational attainment. It emphasizes the significance of housing features themselves as well as characteristics of the communities in which children reside. Among the key findings: twice as many Americans (95 million) spend more than 30 percent of their income on housing than lack health insurance (45.7 million); 11 percent of the U.S. homeless population is age 6 or younger; and three or more early life residential moves can reduce a child's odds of graduating high school by nearly 20 percent compared to their non-moving peers.

The goal of the Partnership for America's Economic Success is to document the economic and social returns on a range of investments in children during their earliest years, prenatal to age five. The best of those investments help ensure that the country produces a healthy,well-educated workforce.

This report pays particular attention to young children and their families, highlighting the short-run and long-term impacts on society of the homes and neighborhoods where children spend their early years. The report concludes with a brief description of various policies—existing, proposed and potentially promising—to ensure that all children have stable and safe homes and neighborhoods. As just two examples, supportive housing policies for families at risk of losing kids to foster care and targeted lead-abatement strategies can provide long-term societal benefits.