Research Links Housing Scarcity to Poverty Rates Across States

A study by University of Oxford professor Zachary Parolin examined housing costs in 2023 and found that in ten states plus Washington D.C., between 16 and 34 percent of poverty is directly attributable to above-average rental prices. Housing supply shortages estimated at 4 to 7 million homes have driven rents significantly above historical norms, offsetting some benefits from anti-poverty assistance programs. Research suggests that a 20 percent reduction in inflation-adjusted rents could lower poverty rates by 18 to 26 percent across the most affected states.

The research by University of Oxford economist Zachary Parolin uses the Supplemental Poverty Measure, a Census Bureau tool that accounts for regional cost variations, to reveal housing's outsized role in poverty. Ten states and the nation's capital stand out for the severity of this connection, with rental expenses consuming roughly one-third of income for half of American renters. The shortage of available homes—estimated between 4 million and 7 million units—has pushed prices substantially above what historical data would predict, creating a drag on household finances that existing assistance programs like food aid and tax credits cannot fully offset.

Cities including Austin and Minneapolis have demonstrated that regulatory reform focused on zoning, construction codes, and streamlined permitting can meaningfully increase housing supply and reduce rents. These examples suggest that policy changes aimed at housing production could yield measurable poverty reductions in high-cost regions without requiring direct increases to income-support spending.