Rising costs, local restrictions, and regulatory burdens weighing on Mississippi housing market – Magnolia Tribune

Report on Mississippi’s Housing Sector Challenges and Alignment with Sustainable Development Goals

Executive Summary

A recent report to a Mississippi Senate Study Committee reveals significant challenges within the state’s housing sector, threatening progress toward key Sustainable Development Goals (SDGs). Despite surface-level indicators of stability, rising costs, construction slowdowns, and regulatory burdens are undermining housing affordability and accessibility. These issues directly impact the state’s ability to achieve SDG 1 (No Poverty), SDG 10 (Reduced Inequalities), and SDG 11 (Sustainable Cities and Communities) by creating barriers to adequate and affordable housing for a growing number of residents.

Analysis of Housing Affordability and its Impact on SDGs

The affordability crisis in Mississippi affects both homeowners and renters, exacerbating poverty and inequality across the state.

• Homeownership Challenges (SDG 10): Many households earning $50,000 to $60,000 annually are now dedicating more than the recommended 30 percent of their income to housing payments. This trend, particularly prevalent in the Gulf Coast, university cities, and the Jackson metro area, reduces disposable income and economic stability, working against the goal of reducing inequalities.
• Rental Market Crisis (SDG 1 & SDG 11): The situation is more severe for low-income renters. Citing the Low-Income Housing Coalition, Mississippi has a profound shortage of affordable housing, with only 59 affordable rental units available for every 100 people in need. This forces tens of thousands to spend over 30% of their income on rent, trapping them in a cycle of poverty and hindering the state’s progress on SDG 1.
• Wage-to-Rent Disconnect (SDG 8): A significant gap exists between prevailing wages and the cost of rental housing. To afford a fair market rate two-bedroom home ($1,400/month), a worker must earn $20.03 per hour. This is more than double the hourly wage of many essential workers, highlighting a disconnect that undermines the principles of decent work and economic growth outlined in SDG 8.

Barriers to Sustainable Housing Development (SDG 11)

The supply of new, affordable housing is constrained by several factors, directly impeding the achievement of SDG 11, which calls for access to safe and affordable housing for all.

1. Prohibitive Construction Costs: The cost to build a modest 1,500-square-foot starter home ranges from $270,000 to $330,000. High costs for materials, labor, and land (e.g., lots costing $65,000 to $85,000 in various counties) make the construction of entry-level homes financially unviable without subsidies.
2. Regulatory and Infrastructure Burdens: Government regulations at the local and state levels account for nearly 29 percent of the cost of a single-family home. The expense of installing infrastructure, such as roadbeds, has doubled in the last decade due to these regulations, further inflating final housing costs.
3. Construction Slowdown: A combination of high building costs, increased utility tap fees, and long waiting times has led to a slowdown in new construction, further tightening the housing supply and working against the goals of SDG 11.

Proposed Solutions to Advance SDG Targets

Lawmakers were presented with several recommendations aimed at mitigating the housing crisis and aligning state policy with Sustainable Development Goals.

• Reduce Development Costs and Regulatory Barriers: The primary recommendation is to lower development costs by easing local restrictions and regulatory burdens. This would directly support SDG 11 by making it more feasible for builders to construct affordable housing.
• Utilize Financial Incentives for Affordable Housing: Implementing programs like the new market tax credit can encourage private investment in low-income communities. By requiring a percentage of units to be income-restricted, this approach helps create mixed-income developments, advancing SDG 1 and SDG 10.
• Promote Financial Literacy: A long-term strategy proposed was the mandatory inclusion of financial literacy courses in high schools. This initiative supports SDG 1 by empowering future generations with the knowledge to achieve financial stability and secure adequate housing.

Analysis of Sustainable Development Goals in the Article

1. Which SDGs are addressed or connected to the issues highlighted in the article?

1. SDG 1: No Poverty

   The article directly connects the housing crisis to poverty, stating that “About one in five people in Mississippi live in poverty.” It emphasizes the struggles of low-income renters, linking the lack of affordable housing to the broader issue of poverty in the state.

2. SDG 4: Quality Education

   A solution proposed in the article is to “start requiring financial literacy courses” in high schools. This connects the issue of housing affordability to the need for relevant education that equips individuals with the skills to manage their finances, which is a component of quality education for life skills.

3. SDG 8: Decent Work and Economic Growth

   The article highlights a significant “disconnect” between wages and housing costs. It points out that the hourly wage needed to afford a two-bedroom rental is often “twice as much as what a janitor, fast food worker, or low-level health care worker earns an hour.” This addresses the theme of decent work, where employment should provide a living wage that covers basic needs like housing.

4. SDG 10: Reduced Inequalities

   The housing issue disproportionately affects certain economic groups. The article specifies that the situation is “worse for low-income renters” and that starter homes are “slipping away from young families.” This focus on the vulnerability of specific population segments relates directly to reducing economic inequalities.

5. SDG 11: Sustainable Cities and Communities

   This is the most prominent SDG in the article. The entire discussion revolves around the lack of affordable and adequate housing in Mississippi. The article details rising housing prices, a shortage of affordable rentals, and the challenges of building entry-level homes, all of which are central to the goal of making human settlements inclusive, safe, and sustainable.

2. What specific targets under those SDGs can be identified based on the article’s content?

1. Target 1.2: Reduce at least by half the proportion of people living in poverty.

   The article’s mention that “one in five people in Mississippi live in poverty” and its focus on the financial struggles of low-income households directly relate to the goal of reducing the poverty rate.

2. Target 4.4: Substantially increase the number of youth and adults who have relevant skills, including technical and vocational skills, for employment, decent jobs and entrepreneurship.

   The suggestion to implement “financial literacy courses” in high schools aligns with this target, as financial literacy is a crucial relevant skill for economic stability and navigating the housing market.

3. Target 8.5: Achieve full and productive employment and decent work for all.

   The article’s analysis of the gap between the wages of low-level workers and the cost of rent directly addresses the concept of “decent work.” It implies that current wage levels for certain jobs are not sufficient to constitute decent work, as they do not allow workers to afford basic housing.

4. Target 10.2: Empower and promote the social and economic inclusion of all.

   By highlighting the specific challenges faced by “low-income renters” and “young families,” the article points to a lack of economic inclusion in the housing market. The proposed solutions, like new market tax credit programs for low-income neighborhoods, aim to promote this inclusion.

5. Target 11.1: Ensure access for all to adequate, safe and affordable housing.

   This target is the central theme of the article. The text extensively discusses the lack of affordable housing, citing the high percentage of income spent on housing, the shortage of rental units, and the prohibitive costs of building starter homes. The entire article is an analysis of the failure to meet this target in Mississippi.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

1. Proportion of income spent on housing.

   The article repeatedly refers to the industry recommendation that housing costs should not exceed “30 percent of yearly income.” It notes that many Mississippians are approaching or have already surpassed this threshold, making it a clear indicator of housing affordability.

2. Availability of affordable rental units.

   The article provides a specific metric: “in Mississippi… there are 59 affordable housing rentals for every 100 people.” This ratio serves as a direct indicator of the housing shortage for renters and can be used to track progress.

3. Proportion of population living below the national poverty line.

   The article explicitly states, “About one in five people in Mississippi live in poverty, according to 2023 Census data.” This statistic is a direct indicator for measuring progress on poverty reduction (Target 1.2).

4. Housing wage vs. actual wage.

   The article calculates the hourly wage required to afford a two-bedroom rental (e.g., “$20.03 an hour”) and contrasts it with the earnings of low-wage jobs. The gap between the “housing wage” and the actual average wage for low-income workers is an implied indicator of the disconnect between earnings and the cost of living.

5. Cost of home construction and development.

   The article provides specific figures for construction costs (“$180 to $220 per square foot”), lot costs (e.g., “$85,000” in Desoto County), and the portion of housing costs attributed to government regulations (“nearly 29 percent”). These figures are indicators of the barriers to building affordable housing.

4. Table of SDGs, Targets, and Indicators

Source: magnoliatribune.com